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2008年11月12日 (水)


2008/11/12 --The Asahi Shimbun, Nov. 11(IHT/Asahi: November 12,2008)

EDITORIAL: G-20 emergency summit


The Group of 20 leaders will gather in Washington this weekend for an emergency meeting on how to tackle the financial crisis that started in the United States and the looming global recession.


To lay the groundwork for the critical summit, the G-20 finance ministers and central bank governors met over the weekend in Sao Paulo to clarify the key challenges confronting the world.


The top G-20 economic officials called for enhancing the functions of the International Monetary Fund and the World Bank while giving emerging countries a greater voice.


The lax oversight and regulations on financial institutions that led to global market bubbles should be tightened. And a new system should be established to monitor cross-border financial businesses. The member countries should take all possible fiscal and monetary measures to shore up their weakening economies.


These arguments reflect two separate viewpoints. One is how to contain and end the rolling financial crisis. The other is what should be done to ensure that a similar crisis will never occur again.


The Sao Paulo meeting expressed a strong determination to tackle the ongoing crisis head-on and then determine measures to prevent a similar crisis.


In their discussions in Washington, the G-20 leaders should thus distinguish urgent, short-term issues from long-term challenges.


Fortunately, there has been a lull in the global financial market panic that began in September. But the possibility is high that it will flare up again. Hit by the cascading effects of the financial sector's implosion, the health of real economies around the world worsens by the day.

Concerns are growing that the financial market turmoil and the deterioration of real economies could combine to push the world into a global depression. Dealing with this dire situation should be the top priority for the G-20 leaders.


Preventing such a black scenario from coming to pass requires all countries to increase domestic demand through effective fiscal and monetary efforts suitable for their economic conditions. If nations start trying to ramp up their exports in self-centered efforts to save their economies, the risk of a global economic debacle due to trade friction and protectionism will grow.


It is vital for all countries to focus on expanding domestic demand.


Another urgent need is to expand the IMF's coffers so that the lending organization can rescue emerging and developing countries facing a serious shortage of foreign currency. Emerging countries with a huge trade surplus or massive foreign reserves should be asked to provide money for the IMF.


On the other hand, countries should take their time debating measures to prevent a new crisis, such as fundamental reforms of the international currency system and the IMF or enhancement of financial regulations and oversight.


Since the Asian financial crisis erupted about a decade ago, European and emerging countries have been arguing for such preventive measures. But there has been little progress toward an international agreement on any of these steps mainly because of opposition from the United States, which is bent on protecting the dollar's status as the world's key currency and is averse to any new regulation.


It is understandable that proponents of these ideas are now eager to take advantage of the opportunity to promote their agendas. But a rash move by these countries to push through the reforms they advocate could imperil international efforts to deal with the crisis by highlighting their disagreements with the United States.

The blame for the current crisis falls on the United States. When an end comes into sight, the stage will be set for constructive international debate on the reforms the United States currently disfavors.


U.S. President-elect Barack Obama has stressed his resolution to put the U.S. economy back on a growth track. But he has yet to articulate his plans for the future of the world economy. It is this vision we are waiting on.



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