ME and Ophelia

James Petras renders a sobering diagnosis of the global crisis, in stark contrast with the upbeat spin emanating from the recent G-20 Summit. Leaving no stone unturned, he takes us through the various processes, including military-driven empire building, that have led inexorably to the current, deepening debacle. The elephant in the room is the capitalist system itself. With great eloquence, Petras fleshes out the message that protesters throughout the world have been shouting: "capitalism isn’t working".

G20 - "As world leaders gather in London for the Group of 20 summit meeting, the most wrenching statistic is this: According to World Bank estimates, the global economic crisis will cause an additional 22 children to die per hour, throughout all of 2009.

And that's the best-case scenario. The World Bank says it's possible the toll will be twice that: an additional 400,000 child deaths, or an extra child dying every 79 seconds.

'In London, Washington and Paris, people talk of bonuses or no bonuses,' Robert Zoellick, the World Bank president, said this week. 'In parts of Africa, South Asia and Latin America, the struggle is for food or no food.'

... If the G-20 leaders want to address these needs, there are many ways they can do so with negligible sums. Mr. Zoellick at the World Bank is pushing a trade support program to help developing countries sustain their trade. Muhammad Yunus, the microfinance pioneer who won the Nobel Peace Prize, urges the G-20 leaders to create a fund to invest in organizations that offer small loans or otherwise bolster commerce in poor countries." [Nicholas D. Kristof , in The New York Times, 4/02]

... the poor countries: they don't have the economic independence to do a stimulus on their own. They have very limited means to do counter-cyclical investment. They have social protection needs with possibly tens of millions of people driven below the poverty line. A strong package based on the IMF and World Bank is critical for them. Finally to the strengthening of these international institutions which is so critical as the instruments of managing all of this - the IMF and World Bank. We will see a significant growth in the World Bank's role. We will see a huge enhancement of the IMF's resources. It is critical for those of us who believe in the importance of an international system that money comes with reform. [Lord Malloch Brown, in The Independent, 4/02]

We now need a small fiscal stimulus for Africa. It will be a tiny fraction of what we are spending on bailing out the banks. The Overseas Development Institute and the National Institute of Economic and Social Research show that a counter-cyclical investment of $50bn (?38bn, ?35bn) for Africa would start paying for itself immediately. US and Chinese exports would rise by $1.4bn in 2009, UK exports by $750m, German exports by $2bn. Currently the G20 is proposing more resources for the Asian Development Bank, but what about the equally critical African Bank? Many "shovel ready" projects need funding. It is clear that African growth is part of the solution that reboots the global economy. [Bob Geldof, in The Financial Times, 4/02]

What a glamorous week!



Photo: Even Bob Geldof was star struck at the global gathering (Getty Images/BBC)

Michelle Obama taking London by storm in an array of beautiful outfits.

Police outriders escorting world leaders across town in gleaming cavalades.

The birth of a new world order, we were told.

It did not seem quite like that to us journalists at 5.30 on Thursday morning at Peruvian Wharf in London's docklands.

We had to sit for an hour in a dirty bus before we were transferred to a clean one.

This was not about clearing up crisp packets or fag ends but spook talk for vehicles inside and outside the secure area.
Low key atmosphere

In fact the whole landscape looked like one of those locations in Spooks where Harry hands over a terrorist to the Russians.

Even at the heart of the summit, the atmosphere was distinctly low key as Bob Geldof told me in a PM interview: "You look around and think, oh yeah, that's Manmohan Singh, leader of a billion people. Or that guy, chewing on a sandwich, he's Hu Jintao, the President of China."



Photo: Obama's earlier apparent snubs to Brown were forgotten (AP/BBC)

The Excel centre was clearly a sensible place to have the G20 summit from a security perspective but it had also been picked for a symbolic reason.

Just as the Docklands are the site of East London's regeneration so Gordon Brown hoped his summit would find the means of regenerating the wastelands of the global economy.

Late on Wednesday night his people were already bubbling with optimism about the outcome.

They felt they had achieved the almost impossible by transforming what had been a shopping list of 47 items after the last G20 summit into a coherent plan.

The aim is to channel money to emerging economies which are an engine of growth across the world.

Biblical reference

The fact that their markets have seized up has created immense problems for export-led economies like Germany and Japan.

More money will be available to them in a number of ways - through new trade credits, a trebling of funds to the International Monetary Fund and a new allocation of Special Drawing Rights, a form of international money that can be printed by the IMF.

The 1.1 trillion dollars in total was far more than had been expected, Gordon Brown placed the agreement in a Biblical setting as befits a son of the manse.

"The world will no longer pass by on the other side", he said.

What good will all this do Gordon Brown domestically?

But there are questions to be asked about the money, in particular about the role of the IMF, a body which has come under a great deal of criticism in the past.

I interviewed Ha-Joon Chang, one of the world's most eminent development economists on Thursday.

His view was that the IMF had always been opposed to deficit spending in the past so would find it difficult to reinvent itself as an engine of fiscal stimulus.

Setbacks

Bob Geldof too was worried about the kind of conditions which are normally imposed by an IMF loan.

I put those points to Mark Malloch-Brown, the Foreign Office minister who has been one of Brown's chief negotiators.

He acknowledged that the IMF would have to undergo a process of reform.

There were setbacks too for the Obama/Brown axis as no agreement was forthcoming about a future commitment to more fiscal stimulus.

Instead there was praise about the five trillion dollars already committed for this year and next.

The government argues that the summit has acted as a spur, a deadline for individual countries to act.

But it is highly possible that they would have decided to increase spending and cut interest rates whether there was a summit in the offing or not.

Statesmanship

For Gordon Brown himself, the summit has been a triumph as was evident from his body language throughout.

Long forgotten were the apparent snubs from his Washington visit as President Obama lovebombed him with praise.

But what good will all this do him domestically?

To some he will have demonstrated statesmanship and proved that his experience in a crisis can be trusted unlike the "novices" of David Cameron and George Osborne.

But others may resent the time he's spent hobnobbing with foreign leaders when there is so much pain and trouble at home.

At the final press conference, the prime minister was powerful when speaking about poverty around the world.

He was less compelling when trying to relate the actions of the summit to people's real lives in Britain.

For this to be any kind of springboard for a political recovery, he will have to find the language to do so.