Today the G-20 Summit began. The experts in economic matters have made an enormous effort. Some, with experience in important international positions; others, as learned researchers. The subject is a complex one, the language is new and demands that we be familiar with the terms, the economic facts, the international agencies and the political leaders who have the greatest weight on the international scene. Therefore, our desire to simplify and to explain intelligibly what is happening in London, just as I see it.
Nobody was surprised that Obama was the star of the London summit. He represents the most powerful and wealthiest country in the world. He is favored by special circumstances. Bush, lying, cynical, war-mongering and nasty, is not there. Neither is McCain, mediocre and ignorant, thanks precisely to Obama’s amazing victory, a black man in the country of racial discrimination, where a majority of white voters cast their ballots for McCain, but not in enough numbers to compensate for the votes of more than 90% of black and mixed race Americans, citizens of Latino origin, the poor and those affected by the crisis. He has just been elected when other G-20 leaders are at the point of concluding their mandates and Obama will be the probable president of the United States for the next eight years. It isn’t strange that news from London revolve around him.
What the world deems important is what comes out of it there, that is, if anything comes out at all. Each one of the participants has their own national and even personal objectives, as political leaders who shall be judged by history.
Obama’s objective is, in the first place, to change the image of his country, the principal responsible party for the tragedy from which the world is suffering and the party being rightly blamed for the current devastating economic crisis, in which he has absolutely no political responsibility. As Joseph Stiglitz, the former economic head of the International Monetary Fund and now MIT professor, points out: “He ought to come to say that he is guilty of nothing and that he is trying to solve it as quickly as he can.”
His main European ally, British Prime Minister Gordon Brown, is the Summit host, wildly hoping to alter the current anti-Labor Party tendency unleashed by the nonsense of his predecessor Tony Blair. Buckingham Palace honored Obama and his wife Michelle with a reception. The president gave the elderly Queen a modern digital recorder, product of sophisticated American technology, an Ipod with songs and images of the Queen’s state visit to the U.S. in 2007 and a book with musical scores signed by Richard Rogers. No words were to be exchanged with Her Highness about the mundane G-20 meeting.
Brown, on the other hand, is pulling out all stops with the crisis. He hopes to change the regulation of the banking system, promote economic growth, increase cooperation and put an end to protectionism. He recognizes that the negotiations will be difficult.
His motto: “It is better to look ahead than to look back”. Clearly if the voters were to look back, he would win very few votes.
The desire of both allies in the heart of the G-20 is to minimize the differences between France and Germany.
Sarkozy doesn’t hide his displeasure with United States policy. He is explosive. He recently threatened to walk out of the summit. Yesterday, on Europe 1 Radio, he declared that for now there is no satisfactory agreement about the Summit, but he did soften his threats to leave the table if there is no move towards greater regulation: “I will not be associated with a Summit that doesn’t end with greater regulations.” He assures that the negotiators have not reached any agreement.
The draft of the Summit’s communiqué, already making the rounds among journalists, speaks of measures to reestablish global growth, keep markets open and encourage global trade. “We must get results, there is no choice,” Sarkozy insisted yesterday.
A few days ago Obama announced that the United States proposes to introduce changes in its system of regulation and supervision, in the hope that this declaration would fulfill a part of the European demands, snatching away one of those flags.
Sarkozy rejoined that his endeavor to put an end to tax havens is serious.
Very close to Sarkozy’s positions, Angela Merkel, the German Chancellor, demands that the agreement not include either the requirement of a tax stimulus plan for the advanced countries, or that debate be opened up about the announcement of a new international currency which is the emerging countries’ demand to the G-7.
“The world is at a crossroads,” Merkel said. “We must do everything possible so that the crisis is not repeated.”
“We have to go further than what was discussed in Washington,” and she added that everything agreed to in London must come with a guarantee that it will be applied. “There must not be one single place, or one single product or one single institution without supervision and transparency.”
Merkel revealed herself to be on the side of increasing International Monetary Fund funding and stepping up aid to developing countries which are essentially suffering from the impact of the crisis.
Increasing IMF resources already appears to be a reality. The president of Mexico said when he arrived in London that he is negotiating a line of credit with the IMF for 26 billion euros. Yesterday in London John Lipsky, the number-two man in the International Monetary Fund, informed that the IMF would provide Mexico with a line of credit for 47 billion dollars in order to guarantee the availability of cash flow in case the market situation worsens because of the crisis. The figure is larger than that requested by Mexico.
As in the IMF, the United States has the majority of shares, without its support such a credit would not be possible and so this underpins Obama’s influence at the London Summit.
The news cables were announcing that Obama would be meeting with Dimitri Medvedev and Hu Jintao, the presidents of Russia and China, to talk about the tricky problems facing both countries with the United States.
In the superpower’s bilateral encounters with the two great powers, economic problems will surely be tackled, or perhaps agreements that have been patiently discussed and approved through their diplomatic representatives will be announced.
Today, April 2nd, I read a long and detailed dispatch from the Xinhua News Agency, dated the 1st, reporting that
“President Hu Jintao of China and President Barack Obama of the United States agreed today that their respective countries will work together to build a positive, cooperative and full relationship in the 21st century.”
“Furthermore, the presidents decided to establish the bilateral mechanism of Strategic and Economic Dialogues.”
“The new commitment, assumed by both heads of state during their meeting in London, will outline the direction and provide a major boost to sustained, solid and stable development of relations between the two nations.”
“The relationship between China and the United States continues to be one of the most important bilateral relationships in the world in the 21st century, one in which humankind faces enormous opportunities and challenges. In the new era, the two nations have important responsibilities in regards to world peace, stability and development and they also share wide interests.”
“The two parties ought to maintain the rhythm of the times and always conduct the bilateral ties from a strategic, long-range perspective.”
“They must respect and take into consideration the fundamental interests of the other party and take advantage of opportunities, just as they must work together to face up to the challenges of the century.”
“Establishing the China-USA Strategic and Economic Dialogues Mechanism is an important step to promote the bilateral relationship to an even greater extent. Thus, the earlier strategic dialogue between the two countries has been raised to a new level.”
“At a time when the international financial crisis continues to spread, the two nations must support one another and work together to weather the storm, and this will favor the primary mutual interests of China and the United States”.
“China and the United States should not only improve the exchanges and cooperation in areas such as the economy, the fight against terrorism, proliferation, transnational crime, climate change, energy and the environment, but they must also strengthen communication and coordination in regional and world issues.”
Such an agreement cannot be discussed in a 60-minute meeting. It was already drawn up in all its details.
China, whose allies today on the Asian continent invaded and plundered it a mere seven decades ago, is now moving forward to a top position in the world economy.
It is the United States’ prime creditor and calmly discusses with the president of that powerful country the rules that will govern relations between two nations in a world fraught with risks.
Perhaps the Xinhua dispatch transmits one of the most important news related to the G-20 Summit.
Today it began and concluded as I was writing these lines! Amazing!
Fidel Castro Ruz
April 2, 2009