Get it going

Speaking of the G-20 summit on Thursday, American President George W. Bush said 8220;the issues are too complex, the problem is too significant to try to solve, or to come out with reasonable recommendations in just one meeting.8221; That8217;s partially true, but only partially. There8217;s no doubt that a fundamental restructuring of international financial oversight, such as many believe has been made essential by the current crisis, would be difficult to pull off in two days; but a start can be made 8212; and definitely, an effort at 8220;reasonable recommendations8221;.

Bush8217;s response and those efforts from his administration recently to damp down expectations from the summit are born of several imperatives. The most irrelevant, though the most frequently raised, are domestic American political compulsions: the current administration is a lame duck, both unpopular and on its way out; and the incoming team has cynically chosen to avoid associating itself with any efforts being made by the unloved incumbents, even given the risk of delaying action. But that isn8217;t the primary thing concerned Indians need to worry about. India will have to be on guard against attempts 8212; which this statement of Bush8217;s signals 8212; from the US and Canada to protect domestic regulation from international oversight; and against attempts from Europe to protect its entrenched, oversized control/voting rights at the International Monetary Fund.

However, there is some good sense underlying Bush8217;s view in this case: and that is that the conference might have to prioritise. Creating a new, more reasonable multilateral structure is the most vital task thrown up by this crisis; but it is not, perhaps the most pressing. The most urgent business is to ensure that the existing structure can at least manage to keep the crisis contained. The IMF, for example, has to be strengthened: and it is universally understood that it needs funds, and the promise of more funds, if it is to make pro-active attempts to shore up troubled countries. It is also clear that the leaders need to agree that the IMF can8217;t set overly restrictive conditions for lending at this time to well-run but crisis-hit countries; that trade restrictions are unacceptable, especially now; and that they need to consider co-ordinated fiscal stimuli to keep growth moving 8212; particularly in the global engines of growth, India and China. These are all urgent, and need 8220;reasonable recommendations8221; now. But that doesn8217;t mean that the twenty powerful people meeting this weekend can shirk the responsibility to start thinking hard about the new systems that are needed.