缅北禁地

A trading house in Johannesburg, South Africa: As the only African 鈥渆merging market鈥� at the Group of 20 summit in Washington, South Africa sought to convey the continent鈥檚 policy proposals to the leaders of the world鈥檚 biggest economies.

Photograph: Africanpictures.net / Marianne Schwankhart

The Chinese word for 鈥渃risis鈥� (wei ji) is composed of two characters, notes Senegalese economist Moustapha Kass茅. One signifies 鈥渄anger鈥�; the other, 鈥渙pportunity.鈥� In reacting to the current global economic crisis, Mr. Kass茅 argues, African governments have too often seen only the first meaning. 鈥淏ut it is the second that is essential: every crisis carries within itself an opportunity, a chance for change, for adaptation.鈥�

So far African political leaders, experts and researchers have not done nearly enough to intervene in international debates over how to overcome the crisis, claims Mr. Kass茅, a professor at the University of Dakar. They must become much more active, since these talks 鈥渨ill decide the fate of the world.鈥�

From New York to Washington to Doha, a series of international summits have brought world leaders together to brainstorm. With the depth of the current crisis 鈥� and the failure of the most influential financial institutions even to foresee its outbreak 鈥� there is now broad consensus that fundamental reforms are needed to avoid future calamities. But beyond that basic understanding, little common ground has yet emerged. What reforms? How far-ranging? And who will decide?

Only one African country (South Africa) was invited to the 15 November emergency summit in Washington of the Group of 20 (G-20), a high-level consultative body. But a number of African presidents and prime ministers took part in an international conference on 鈥渇inancing for development鈥� in Doha, Qatar, two weeks later. Their presence in Doha, said Jean Ping, chairman of the Commission of the African Union, the continental political body, testified to Africa鈥檚 interest in reforming global economic arrangements. 鈥淗ow can reforms of the system be envisaged without us?鈥� he asked. 鈥淗ow is it possible to think that Africa can be left out of these negotiations, which concern Africa and the future of its children? Africa鈥檚 voice must be heard.鈥�

More seats at the table

While the Washington summit of the G-20, called by outgoing US President George W. Bush, put off any real decisions until a follow-up meeting in London in April, the simple fact that it took place broke at least one barrier. Previously, most major talks about the world economy had been limited to the rich industrialized countries鈥� Group of Seven (Canada, France, Germany, Italy, Japan, UK, US), joined on some issues by Russia (to form the Group of Eight).

But with those countries鈥� economies now spiraling downward, it has become clear that on their own they would be hard-pressed to pull out of the crisis, let alone develop any credible reform proposals. 鈥淭he G-7 is not working,鈥� acknowledged World Bank President Robert Zoellick. 鈥淲e need a better group for a different time.鈥�

In fact, many critics from developing countries maintain that the dominant international financial institutions, especially the World Bank and International Monetary Fund (IMF), are themselves not working effectively. One criticism is that their decision-making is weighted too heavily in favour of the richest economies. On the IMF board, for example, the US carries 17.1 per cent of the votes and the European Union 32.4 per cent. As a result, critics argue, the interests of developing countries are not well reflected. And while poor nations must often carry out painful economic reforms in order to qualify for financial assistance, the policies of the rich economies have faced little, if any, scrutiny from the IMF or World Bank.

In this context, the summit in Washington was thrown open to a somewhat broader group of countries. The G-20, established in 1999 in the immediate wake of the Asian financial crisis, was initially comprised of finance ministers and central bank governors from developed countries and from some of the larger developing economies, commonly called 鈥渆merging markets.鈥� The developed side included the G-8 countries, Australia and the European Union. The developing countries were Argentina, Brazil, China, India, Indonesia, Mexico, the Republic of Korea, Saudi Arabia, South Africa and Turkey.

The decision to upgrade the G-20 meeting to the level of heads of state 鈥� and thereby transform it into a more central body 鈥� reflected not only the unprecedented nature of the current crisis, but also a longer-term, underlying shift: the economies of the G-7 are no longer as dominant as they once were. Between 1965 and 2002, the G-7 accounted for two-thirds of world output. That share has now fallen to 52 per cent. According to some projections, it could shrink to 37 per cent by 2030 and 24 per cent by 2050.

Meanwhile, the larger developing economies have grown in influence as trading powers, investors and even providers of foreign aid. As a group, the developing economies will continue to grow by 4.6 per cent in 2009, while the industrialized countries slide deeper into recession, according to forecasts by the UN鈥檚 Department of Economic and Social Affairs.

As the industrialized nations grapple with ways to stimulate the global economy, the financial resources at the disposal of these 鈥渆merging markets鈥� are a major attraction. When Japanese Prime Minister Taro Aso announced in Washington that Japan would offer as much as $100 bn to support IMF rescue packages for financially troubled countries, he added, 鈥淥il-producing countries, China and other countries that have ample reserves could also make their contributions.鈥�

Brazilian President Luiz In谩cio Lula da Silva emphasized that developing countries will not be content with simply putting their money on the table. They also want a greater say. 鈥淚n a globalized world,鈥� he argued, 鈥渨e need serious and representative forums to take global decisions.... We need to have other countries and other continents for more democratic, more plural decisions.鈥�

For a 鈥榥ew multilateralism鈥�

Before the G-20 summit, initial reactions in Africa were somewhat sceptical. President Denis Sassou-Nguesso of the Congo Republic complained that Africa was still excluded from the discussions on international reform. Although South Africa belonged to the group, he said, it was as an 鈥渆merging market,鈥� not a representative of Africa.

But just three days before the G-20 met, African finance and planning ministers and central bank governors met in Tunis, Tunisia, to hammer out an initial common stance on the global crisis (see ). They also asked South Africa to convey their views to the G-20.

South African President Kgalema Motlanthe did in fact present Africa鈥檚 case in Washington. Beyond relaying Africa鈥檚 policy proposals, President Motlanthe argued that reform should 鈥渆ntail far better representation for African countries in the international financial institutions than is currently the case.鈥�

The ministers in Tunis had stressed the same point, stating that South Africa鈥檚 role within the G-20 鈥渃annot be a substitute for enhanced African participation.... A new global accord must be inclusive and reflect the interests of all in negotiations and decision-making. We call for a 鈥榥ew multilateralism鈥� that fully reflects current realities.鈥�

That call was echoed at the international conference on 鈥渇inancing for development鈥� in Doha on 29 November鈥�2 December. 鈥淲e need a new multilateralism,鈥� declared 缅北禁地Secretary-General Ban Ki-moon. In fact, one of the conference鈥檚 main purposes, he said, was to 鈥渂uild a bridge between the G-20 and the rest of the world 鈥� the full community of nations.鈥�

Many leaders from Africa and other regions have pointed out that the United Nations 鈥� to which all countries belong 鈥� is well suited for establishing forums to develop the most inclusive proposals for long-term reform. The Doha conference concluded with a call for the 缅北禁地to organize a summit on world financial structures.

Reassessing policies . . .

Many specific reform recommendations have already been floated. The G-20 summit alone set up working groups to negotiate proposals on 47 issues. If agreement can be reached, some of those proposals may be taken up at the London meeting in April. The issues ranged from reforming the IMF and World Bank to taking a variety of measures to better regulate and monitor financial and investment activities. According to some suggestions, there should be greater scrutiny of multinational banks and investment houses, as well as of the policies of the large industrialized economies.

Beyond financial questions, the G-20 leaders also called for restarting stalled international trade talks and vowed to combat a tendency by some rich countries to protect their domestic industries at the expense of other economies. They urged donor nations to maintain foreign aid programmes for poor countries.

Specifically in response to the current downturn, the G-20 recommended that governments take a more active role in putting up public money to stimulate recovery. When IMF Managing Director Dominique Strauss-Kahn was asked where large stimulus programmes should be attempted, he replied, 鈥淓verywhere it is possible.鈥�

. . . and doctrines

For many African analysts, this recent emphasis on the role of governments in overcoming market failures seems to mark a further erosion of the dominant approach of the IMF, World Bank and donor agencies. Over the past few decades, those institutions have obliged many African governments to liberalize their markets and carry out sweeping cutbacks in public spending.

The outcomes of those policies have often been disastrous, noted the internationally renowned economist Joseph Stiglitz. In developing countries, 鈥渃apital and financial market liberalization has often not brought the promised benefits of enhanced growth, but has increased instability,鈥� he told a panel on the global financial crisis in late October organized by 缅北禁地General Assembly President Miguel d鈥橢scoto. The current crisis, Mr. Stiglitz added, should provide an opportunity to reassess 鈥減revalent economic doctrine.鈥�

Similar views have been expressed by members of the incoming US administration of President-elect Barack Obama. According to Lawrence Summers, appointed to head the advisory National Economic Council, 鈥淭he pendulum will swing 鈥� and should swing 鈥� towards an enhanced role for government in saving the market system from its excesses and inadequacies.鈥�

Whatever the particular mix of policies and institutions that emerge from the current crisis talks, the specific concerns of poor Africans must not be forgotten, argue former 缅北禁地Secretary-General Kofi Annan, former IMF Managing Director Michel Camdessus and former US Treasury Secretary Robert Rubin, who are members of the Africa Progress Panel, an advocacy group.

Similar ideas for reforming global economic management were previously raised after the Mexican and Asian financial crises of the 1990s, they noted in a joint statement in October. 鈥淭hat moment of opportunity to put in place a robust global regulatory system was lost; let us not lose this one.鈥�