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September 25, 2009 PITTSBURGH -- A new world order is emerging at the G-20 Summit in
Pittsburgh with a decision by the group to become the premier
coordinating body on economic issues.
A joint communique was expected to show that emerging countries like
China and India will be given more of a voice in how the global economy
is run. G-20 leaders were also pledging to leave in place for now emergency
measures taken last spring that have brought signs of global economic
recovery, and to act as one to prevent a repeat of the financial meltdown. A copy of the draft document, which was obtained by Reuters, said in
part: "We pledge to avoid destabilizing booms and busts in asset and
credit prices and adopt macro-economic policies, consistent with price
stability that will promote adequate and balanced global demand." The draft also contains a promise to "make decisive progress on
structural reforms that foster private demand and strengthen long-run
growth potential." Briefing reporters, U.S. Treasury Secretary Timothy Geithner said the
group would not leave the status quo unchanged. "We are not going to walk away from the greatest economic crisis since
the Great Depression and leave unchanged and leave in place the tragic
vulnerabilities that caused this crisis," Geithner said. "And we have
worked very hard at a very early stage in this process, in this
administration, to build consensus on a very strong set of international
standards for reform." He added that the United States aims to preserve confidence in the U.S.
financial system and keep the dollar strong. "We have a special responsibility here in the United States to make sure
that we are doing the things in this country to preserve confidence in
the U.S. financial system," Geithner said, "confidence that is important
to sustain the dollar's role as the principle reserve currency in the
international financial system and we expect, as I think countries
around the world expect, the dollar to retain that position for a very
long time." U.S. President Barack Obama was attending plenary sessions in the
morning and afternoon and hosting a working lunch. He was expected to
hold a press conference near the close of the summit to lay out the
group's final agreements. Curbing Excesses? Leaders were still discussing how to ensure that the nascent global
recovery sustains its momentum and trying to agree on tougher rules for
international financial institutions aimed at preventing another
financial crisis. Among those rules are limits on banker pay -- an issue that's popular
among the public in countries that have given government 'bail out'
funds to faltering banks. German Chancellor Angela Merkel and French President Nicholas Sarkozy
have pushed hard on the issue of limiting the highest salaries and bonuses. The draft communique appeared to show that the G-20 will do this through
a range of options -- including giving companies the power to retract
bonus pay if performance doesn't merit it, and capping rewards if the
level of reserve funds falls too low. The part of the communique that deals with compensation said that
"reforming compensation policies and practices is an essential part of
our effort to increase financial stability." It added: "If we all act together, financial institutions will have
stricter rules for risk taking, governance that aligns compensation with
long-term performance, and greater transparency in their operations." Range Of Issues Environment advocates were likely to come away from the summit empty
handed, as a U.S.-led effort to get leaders to stop giving subsidies to
fossil-fuel industries failed to translate into a deadline for action. Leaders only agreed to do something in the "medium term." The G-20 has also agreed to make the International Monetary Fund (IMF) a
more representative body by increasing the voting power of countries
that have long been underrepresented. The decisions reflect the recognition by the United States and Europe of
a new global economic reality in which emerging market economies play a
bigger role, especially in the aftermath of the global financial crisis
that hurt developed economies more than developing ones. On international trade, the agreement includes a plan to ask the World
Bank to create a "multilateral trust fund" aimed at increasing the
agricultural investment in poor countries. The joint statement read: "Over 4 billion people remain under-educated,
ill-equipped with capital and technology and insufficiently integrated
into the global economy. We need to work together to make the policy and
institutional changes needed to accelerate the convergence of living
standards and productivity in developing and emerging economies to the
levels of the advanced economies." Attracting Protests The question of how much wealthy states do to help poorer ones is what
attracts thousands of protesters to G-20 and G8 summits, and this one
was no exception. After a day of peaceful protests well outside the massive security
perimeter that police and National Guard troops have erected around the
downtown meeting venues, marches turned violent Thursday evening and
overnight. A group of protesters trying to breach the roadblocks were stopped by
police in riot gear and on horseback who used rubber bullets and tear
gas to push the marchers back. The Pittsburgh G-20 Resistance Project targeted around 80 local
businesses that it said symbolize greed and global economic policies,
including a dozen or so close to the David L. Lawrence Convention
Center, where world economic leaders were meeting. In another part of the city near the University of Pittsburgh, an
overnight protest saw a handful of businesses -- including a McDonald's
and a Subway sandwich shop -- vandalized. Police reported arresting around 60 people. Today a local peace organization called 'The Thomas Merton Center' will
hold a "People's March" and rally near a city government building. The march had a city permit and organizers pledged to keep it nonviolent.
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