by Alex Evans | Apr 2, 2009 | London Summit
Alex Barker at the FT’s Westminster blog:
This is my first dispatch from the G20 media hangar, which has so far proved to be full of journalists and free of information. But Britain’s intrepid press pack have succeeded in digging up one important story: the “minty green” colour of the “lounge area”.
We’re told that the world’s leaders will be plotting the course for economic recovery from a modern, functional, informal “break out zone”. There are comfortable chairs and tables, but “no bean bags”, according to one well informed source.
Leaders left breakfast a short while ago (the menu remains top secret) and are now “milling around”, chewing the fat and bargaining over the world’s future. Here’s to hoping the coffee is better than it is in the press area.
Actually, an informal ‘break out zone’ is probably a good idea. Watching the TV feed of the formal summit room a couple of minutes ago, I couldn’t help wondering how any kind of shared awareness could emerge from such stilted surroundings…
by Alex Evans | Apr 2, 2009 | Economics and development, London Summit
So here I am in the cavernous media centre at the London Summit. Some of the main excitement of the day so far: (a) the police found an unexploded World War Two bomb sunk in the dock next to the Excel centre, and will be detonating it shortly; and (b) there are free bacon sandwiches.
Plus, it turns out that one of the other G20 voice bloggers is Daniel Kaufmann – now at the Brookings Institution, before that at the World Bank. He’s one of the top governance experts in the world (the FT’s words), and was one of the World Bank staffers who really put pressure on Paul Wolfowitz during the 2007 graft kerfuffle – if you recall the letter that he and other Bank staff sent to Wolfowitz, it read
The credibility of our front-line staff is eroding in the face of legitimate questions from our clients about the Bank’s ability to practise what it preaches on governance. In these circumstances, we cannot credibly implement the governance and anti-corruption strategy.”
Hats off for that. Next up: bloggers’ press conference wit Douglas Alexander coming up shortly.
by Alex Evans | Apr 1, 2009 | Economics and development, London Summit
Earlier this week, I did a post on Chinese central bank governor Zhou Xiaochuan’s essay calling for the replacement of the dollar as the world’s reserve currency. Today’s FT contains another instalment of big picture thinking from China on the global economy – this time from Yu Qiao, an economics professor at Tsingua University’s School of Public Policy and Management.
Like Zhou, Yu is explicit on Chinese worries about the potential erosion of the value of their rather large stash of US dollars – $1,200 billion of T-bills alone. “Most of Mr Obama’s stimulus spending is devoted to social programmes rather than growth promotion,” he notes, “which may exacerbate America’s over-consumption problem and delay sustainable recovery”.
What’s more, he continues, that could in turn end up doing exactly what Tim Geither was worried about in the wake of Zhou’s essay: an erosion of the dollar’s role as reserve currency. Here, interestingly, there’s what looks like a signal of preparedness to moderate the position set out in Zhou’s essay. Yu says explicitly that,
No other international monetary system offers a viable alternative. However, we can make the main reserve currency power more accountable by creating an instrument to help manage the global crisis.
Admittedly, Yu is an academic and not a member of the government. But it’s very hard to imagine that a senior Chinese professor would directly contradict his government’s position, on such an acutely political issue, in a time of such severe risks, in the FT, the day before the G20 summit, without clearance. At the same time, using this approach avoids losing face for Zhou – and may signal a willingness to talk, rather than a definite climbdown.
So what does Yu propose as an alternative way of safeguarding China’s assets, if not reform of the dollar’s reserve currency role?
(more…)
by David Steven | Apr 1, 2009 | Conflict and security, London Summit
Space Hijackers have driven their armoured vehicle through the City, making it as far as the Royal Bank of Scotland – much to the amusement of everyone bar the police.
Like Charlie, I wonder whether they – the police – are making a mistake by fixating on demonstrators, rather than lower probability/higher impact threats, and on the capital, rather than the rest of the UK.
After all, the attack on the 2005 G8 came from Islamist terrorists and was not on Gleneagles itself (where security was suffocatingly high).
Following that pattern, I’d expect the threat level to be highest tomorrow morning – and in a city other than London, where many fewer security precautions have been taken. Given the Lahore cricket attacks, I wonder whether tonight’s football international at Wembley might be a target.
Panic not necessary. But a good time to be vigilant…
by Alex Evans | Apr 1, 2009 | Climate and resource scarcity, London Summit
A veritable flotilla of economists has written a letter to the FT this morning, setting out four key targets for the G20. Among them are Nick Stern (of Stern Review fame); former World Bank chief economist Joseph Stiglitz (currently running the UN General Assembly panel on economic reform); Jim O’Neill (head of research at Goldman Sachs and originator of the BRIC acronym); Mohamed El-Erian (CEO of Pimco, probably the most important bond trading house in the world); Nouriel Roubini (Dr Doom); and various other luminaries.
Their first three demands are pretty straightforward. First, move fast and have the IMF monitor policy implementation; second, initiate a ‘clear and independent’ process for IFI reform; third, intervene to restart trade credit. But then comes this:
Fourth, the G20 should shape the economic recovery so that we do not repeat the mistakes of the past. We must develop policies that lay the foundations for strong growth over the next few decades that is not based on unsustainable bubbles. There must be a commitment to a green recovery and, most important, a clear commitment to reach a strong, effective and equitable agreement on climate change at the Copenhagen meeting later this year.
Admittedly, not long on specifics – but other than Nick Stern, I wouldn’t have expected most of these names to put climate change so high on their G20 shopping list.
