‘UN – not G20 – should remake world economy’

THE United Nations (UN), and not the G20, should lead in creating a new financial architecture that would rise out of the current economic crisis, University of the Philippines Prof. Walden Bello said Saturday.

“The proper forum must be the United Nations,” said sociology Prof. Walden Bello who is scheduled to debate with European Union officials on the issue next week.

The debate between Bello, who represents civil society, and Gert-Jan Koopman, director general for Economic and Financial Affairs of the European Commission representing the European Union (EU) delegation to the G20, is scheduled on March 17 at the Residence Palace in Brussels.

Bello said that the exclusive group of the world’s 20 richest countries should not decide on the fate of the world economy.

The G-20, or the Group of 20 Finance ministers and central bank governors, is composed of Finance ministers and central bank governors from 19 of the world’s largest economies plus the EU.

“It is not appropriate that an informal group takes precedence in creating a new financial architecture for the world to meet the current crisis,” Bello told foreign affairs reporters in an interview. “A UN-based forum is the only legitimate forum.”

Bello, a senior analyst of the Focus on the Global South, said the solution cannot be entrusted on those who created the problem.

“We cannot keep on relying on some global institutions, particularly those that were part of the problem, to solve the problems of the global economy,” he stressed.

The United Nations has urged the G-20 countries to support developing countries, including the Philippines, to effectively avert the ill effects of the global financial crisis.

US-Japan/Europe split

The G20 financial ministers meeting started in a London suburb Saturday.

The G-20 Summit is on April 2 in London. Conflicting viewpoints between the United States and Japan on one side and most European countries on the other side places the the summit’s success under a cloud.

The world’s richest countries—the United States, Japan and China—plus wealthy European nations and emerging powers like South Korea will bid to lay the foundations for a plan to pull the global economy out of its tailspin.

But the build-up to the meeting at a luxury hotel near Horsham, south of London, has been marred by clashes between the United States and Europe on whether this is best done through new stimulus measures or tougher regulation.

Failure to come up with a clear commitment to action will dampen hopes that the much-heralded G20 summit, to be hosted by current G20 president Britain in London, can fulfill its promise and further hit already volatile stock markets.

On the eve of the Finance ministers’ meeting, Britain’s Finance Minister Alistair Darling tried to play down talk of splits between the US—whose positive view of stimulus is shared by Japan and China—and Europe.

“I don’t actually think that the divisions between the European countries and the US are anything like what has been described over the last few days,” Darling, the event’s host, told BBC radio.

“I think on both sides of the Atlantic—and also, for that matter, in other parts of the world—there is a commitment to ensure that we support people, support businesses and our economies.”

But recent exchanges suggest there are real differences.

In recent days, senior US officials including US President Barack Obama’s top economic adviser Larry Summers have said leading nations must try to jumpstart a global recovery by pumping more money into their economies.

That has not been welcomed in Europe, where many leaders do not want more spending because of already big budget deficits.
— With AFP