G20: Capitalism Expansion & Climate Disappointment
- By Dr.. Abdul Ruff Colachal
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From G5 (France, Germany, Japan, the United Kingdom, and the USA) to G6 to G7 to G8 to mow G20, the capitalist onward march is sending out dangerous climatic signals to the worrying populations of the globe. Recent G20 summit in Pittsburgh, deadly focused on profits, added yet a few more points of air pollution in atmosphere. Capitalism always talks about success story of capitalism and defeat of socialism and other non-capitalist modes of development. Essentially some hard core rogues in the name of world bodies decide the global issues against human survival. True to its color, capitalism is bothered only about extra profits at the cost of humanity survival. Now things get clearer and issues harder and economic issues pushed the crucial cliamte change issue sideways.
The G20 leaders gathered with their spouses for a welcoming reception at a botanical reserve U.S. Treasury Secretary Timothy Geithner cited progress on several fronts, predicting that summit partners would endorse the broad outlines of a proposal to deal with huge imbalances in the global economy — such as large trade surpluses in China and record budget deficits in the United States. He said other countries also seemed willing to scale back subsidies supporting fossil fuels that aggravate global warming. The U.S. supports China’s efforts to gain greater voting rights in the International Monetary Fund over the reservations of European nations, who would lose influence. Given the rise of China’s economic powers, “it’s the right thing,” and Europe recognizes it. Geithner said the G-20 countries had reached a consensus on the “basic outline” of a proposal to limit bankers’ compensation by the end of this year. He said it would involve setting separate standards in each of the countries and would be overseen by the Financial Stability Board, an international group of central bankers and regulators.
G-summits give vent to the fact that it is not possible for most governments to provide a further fiscal stimulus, because, the deficits are too big. The G20 meeting last week came after the world economy had turned. In the name of G20 summits the advanced capitalist world in fact seeks a success story for the G7. With Russia on board, the G7 could achieve some of its objectives in capitlsit growth, and with the rest of G13 together the G7 is looking forward to greater hights. This very simialr to Indian political scene, where the ruling dispenstion uses Muslms to achieve maximum ofr Hindus whose exclusive interests the Indian reilgme seeks to protct and advnace. There are two oppsing view points about role of globalisation. One, globlaization being threatened by the banking crash, the collapse of international investment flows, etc., and other other, the recession has speeded up the process of globalisation: it has shifted power more swiftly to the emerging economies.
It looks the G-20 which includes emerging economies such as China, India and Brazil, will replace the G-8 (formerly the G-7) which has dominated the world stage for decades, voicing confidence that the new constellation will be able to hammer out much needed financial-market regulation. Others, however, warn that national interest and conflicts may impede real progress and imposing tighter controls on bank capital, news agencies reported. The next meeting has already been scheduled to take place in Canada in 2010. The G-20 meeting in Pittsburgh where leaders aimed to reshape the global financial system, shifting more power to emerging countries ended, as usual, playing politics on climate change and focusing exclusively on profits of global capitalists supported by all G20 regimes. Pittsburgh, a city built on steel production, is showing its tough side as it hosts the G-20 summit. The G-20 will pledge to retain emergency economic measures until it is clear that the global recovery is firmly on track.
There have been disagreements between the European and US delegations on several issues and presence of the plus G12 is expected to ease the trans-Atlantic tensions. The US wanted to deal with the issue by increasing banks' capital requirements rather than through stricter limits. However, the Europeans envisage using new rules to prevent guaranteed bonus payments being paid out over years without being tied to results. In future they should be paid out in the form of shares in the company, rather than cash payments -- something that would increase recipients' interest in the company doing well. "We will avoid any premature withdrawal of stimulus." That is the positon now.
Climate is Sidelined
Capitlaist world is directly resonsible for the carbon emissions. But G20 plays chiefly the profitable financial Role, while climate is sidelined and postponed for the future considerations. G13 desires the G8 gradually replaces UNSC-5 plus and G20 would control the world’s fragile economy. World leaders seem to have closed ranks on pay limits for bankers whose risky behavior contributed to the global financial meltdown. With economies on the mend, a summit mood of cautious optimism replaced last year’s fear and uncertainty. Throughout the day, world leaders descended on the comeback city of Pittsburgh to debate how to keep a fragile global recovery going. Nerves are still on edge, but this summit of the world’s 20 top wealthy and developing economies seems free of the crisis atmosphere that hung over the past two — despite the clashes between protesters and police.
Various global schemes to boost the world economy come to an end and alternatives are appaling too. There are a number of reasons to suspect that consumers throughout the developed world will be pretty cautious. Worldwide, the pace of the recovery is bieng debated endlessly. Obviously, the consumers of the developed world is fous of the G7. In a co-ordinated announcement the Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank set out various measures designed to show that things were getting back to normal. A failed summit and policies stem from the state of the economic cycle and the nature of government and central bank intervention. The stinmulus would be provided by the world's governments and monetary authorities to restart economic growth.
The document signed by the leaders is to underline that the G-20 group, which includes Argentina, Indonesia, Saudi Arabia and South Africa, has a "responsibility to the community of nations to assure the overall health of the global economy." The new regulations would be overseen by the new Financial Stability Board, made up of experts from central banks and financial regulators, which was established at the previous G-20 summit in London. On the subject of climate change, the preliminary results coming out of the Pittsburgh meeting were sobering. It's true that the Pittsburgh summit's draft closing statement contains a passage about climate change, according to delegates. But it is so watered down to mean nothing. According to members of the delegations, climate change talks with senior US officials were "not encouraging," adding that it is no longer expected that the US will pass a law on climate change this year, given the all-consuming debate on Obama's planned health care reform. As a result, the goal of agreeing on a successor agreement to the Kyoto Protocol at December's UN climate change conference in Copenhagen appears to be in acute danger.
Some of developing nations are too happy that they also have opportunity to shake hands with advanced capitalist leaders (rogues?) officially and have a group photo with a sea in the background. With the official fall of communism and socialism across the world and strengthening of capitalist clutches, there is nothing, absolutely nothing, that the people can do aobut the ever changing climatic order deliberately ignored by the capital creating powers. The underlying principle of capitalism, obviously, is high profiteering and not saving humanity form disasters; they argue the more regulations there are, therefore, the less profit will be generated. This profit should, however, be high -- not because politicians are swayed by bankers but rather because all state leaders want potent credit institutes as a foundation for their national economies.
Developing world leaders want to be seen along with top leaders of capitalism in the name of G-20 plus summits and have sumptuous intercontinental cuisine. They see Group of 20 nations gradually assuming the role of a permanent council on global economic cooperation and USA promotes that trend. The awful expectation of a few third world leaders like India is replace G20 with UNSC. President Barack Obama initiated the move. G8 major industrial nations will continue to meet on matters of common importance such as national security, but the role of board of directors for the global economy will be taken over by the larger G-20. That group includes the biggest industrial countries, plus major emerging economies such as China, Brazil and India. This decision brings to the table the countries needed to build a stronger, more balanced global economy, reform the financial system, and lift the lives of the poorest. Until now, European countries had pressed harder than the U.S. for limits. Europeans are horrified by banks, some reliant on taxpayers’ money, once again paying exorbitant bonuses,” said European Commission President Jose Manuel Barroso. But Geithner predicted the proposed crackdown on bankers’ bonuses would be in place by the end of the year.
Global leaders behave more like rogues than real world leaders caring for the future of the earth and societies. Security forces quickly use tear gas on the handful of demonstrators who are protesting for more action on climate change and against capitalism. A mile from the convention center where talks will be held the clashes began after hundreds of protesters, many advocating against capitalism, tried to march from an outlying neighborhood toward the convention center. The biggest clashes between police and demonstrators occurred at just about the time President Barack Obama and first lady Michelle Obama arrived. The protesters banged on drums and chanted “Ain’t any power like the power of the people, ’cause the power of the people doesn’t stop.” Protests notwithstanding, the atmosphere is a lot more relaxed than at the fear-driven sessions in Washington last November and in London in April. Still, the global recovery remains fragile, with many big financial institutions under strain. But the climate conditions don’t engage the required attention of all these emerging big capitalists.
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Dr. Abdul Ruff Colachal
Specialist on State Terrorism
Independent Researcher in International Affairs, the only Indian to have gone through entire India, a fraud and terror nation in South Asia.
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