One of the hallmarks of global economic policy during the last US presidency and for its antagonists was purposefully jeopardizing international forums aimed at creating a worldwide frameworks for trade and development. Picking the issues was easy, ranging from subsidies to tariffs and beyond. Acknowledging the not-so-hidden point has proven to be much more difficult, both domestically and abroad. In stating that the recession is a global problem while continuing bilateral discussions almost exclusively, Obama and his advisers may be exacerbating the very dangers created by a lack of an internationally accepted financial and trade system originally caused by this, his predecessor's strategy.
Today, Obama meets with China's finance minister behind closed doors, and the top topic when meeting the premiers of Canada and the UK was understandably the economy. While the outcome of the first meeting is not yet apparent, that of the first two is clear: yes master. US economic bilateralism can be put metaphorically thus- one big boxer is likely to beat a series of single smaller ones, but put a dozen or more of the latter in the ring and they are much more likely to win. The first strategy is smart if the big boxer can pull it off, but when he is already beaten up and bloody (as the US economy is now), it becomes one of survival rather than supposed success, and herein lies the pressing danger.
That the World Bank and IMF are more or less instruments for advancing the economic interests of developed nations is hard to refute, despite the occasional benefits to those developing. That the UN has not stepped up to plate to tackle the global doomsday economics shows to what extent its mandate is too limited and under-supported. It should be remembered that the G8 was a counter-organization to the G88 of what were then called Third World countries in the Non-Aligned Movement, neither of which has really survived. The G20 is trying to identify itself as the economic organization that bridges the gap, and in its failing or impossibility to do so the need for one becomes all the more clear. Where can advocates of a comprehensive, far-sighted and short-term minded solution look to?
Obama, I believe rightly, tries to cast this crisis as a window of opportunity. However, continuing to pursue bilateral economic trade, financial and other agreements to the exclusion of seeking a boldly new global economic framework to resolve this and prevent future such catastrophes is a gross mistake. Global accounting standards now in the works are one of many possible building blocks. Without seizing this opportunity to establish a worldwide, consensus-based agreement geared towards perpetual prosperity, this current-event recession may become a constant creating a future no one would sign up for except those big enough to box their way through it, and small enough to have to take beatings.
