The G20 summit held in London is occuring against a backdrop of the worst global downturn since the Great Depression. The OECD warned that GDP for its 30 member countries is likely to fall by a record 4.3 per cent this year, against the 0.4 per cent drop that it forecast last November.
The group also warns that unemployment will reach 10 per cent by next year in most developed nations.
The G20 member states cover 85% of the World’s GDP and 80% of the worlds trade.
Economic Issues at Stake
- Fiscal Stimulus. Gordon Brown has been keen to encourage global commitments to extra government spending to boost the global economy. However, the UK is having difficulties with its borrowing requirements already (failed gilts auction). Nevetherless there is hope that countries such as France and Germany may try to do more.
- Global Finance Regulation. French president N. Sarkozy has argued for a global finance regulator. Few others seem interested in this idea. Instead UK and US are calling for greater co-operation of national regulators.
- Free Trade. The Great Recession has raised the spectre of protectionist policies – tariffs on imports and government subsidies. There is hope the leaders may make commitments to avoiding a repeat of the protectionism that characterised the Great Depression
Other Issues
Environmental. Forecasts for global warming have become increasingly dire. But, in recession, many feel environmental issues have become increasingly marginalised – especially given how important they are