Monday, March 30, 2009

World Seeks Major Changes in International and National Economic Systems

The G-20 group of industrialized and developing country leaders meets April 2 to address the global economic crisis.  One thing is clear, we're ready for some change! 

Major reform of the international economic system is needed in order to solve the current economic crisis, according to a new global poll of over 29,000 people in 24 countries carried out by GlobalScan / PIPA at the University of Maryland.  70% believe major changes are required to the way the global economy is run. 4 per cent think no significant changes are needed.  Majorities in most countries - on average 68 per cent - also see the need for major changes to their own country’s economy.  Fifteen of the 24 countries are part of the G20.  Among G20 countries, 65% believe major changes are required to the international economic system, while 62% believe major changes are needed in their nation's economic system.  World Public Opinion For a country by country breakdown of the results, see the following graphic:
Breakdown of World Opinion as to the Need for Major Changes in the Economic System

The question of course is what sort of change.  I received two new publications from GDAE’s Globalization and Sustainable Development Program highlighting changes in both the trade and financial system advocated by Kevin Gallagher of the Global Development and Environment Institute at Tufts.  I have found their analyses to be very interesting:

“Global Crisis in Need of Global Solutions”
by Kevin P. Gallagher, in Latin American Trade Network LATN Nexos 7, March 2009.
In this short essay for a special issue from the Latin American Trade Network on the challenges facing the upcoming G-20 meetings, Kevin P. Gallagher highlights the urgent need for a global response to the economic crisis that recognizes that expansionary government stimulus policies cannot be just for the wealthy countries. He points out that the IMF in its emergency assistance plans for developing countries is still imposing harsh conditionalities that limit rather than expand government spending.  If the IMF is to receive significantly higher lending authority, it should be forced to abandon its draconian austerity policies, which are more inappropriate than ever in the current crisis.Link to IMF Essay

“Trading our way out of the financial crisis: The need for WTO reform”
By Kevin P. Gallagher and Timothy A. Wise
in Rebuilding Global Trade: Toward a Fairer, More Sustainable Future, International Centre for Trade and Sustainable Development (ICTSD) and the Global Economic Governance Programme (GEG), University College, Oxford.
In the context of the deepening global crisis that is pushing millions more into poverty in developing countries, development should be the centerpiece of reforming the global financial architecture. Pressing to conclude a World Trade Organization (WTO) deal based on the current proposals in Geneva would be counterproductive. This essay offers five policies toward reforming global trade that will enable economic development and stimulate global demand during the crisis.Link to WTO Reform Essay

For more analyses like these check out GDAE's Globalization and Sustainable Development Program

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