World leaders are in Washington today for a G-20 summit. The G-20 is basically a group of leaders of emerging economies, the traditional economic powerhouses of the G8, and the EU. Collectively, the G-20 economies comprise 90% of global GNP, 80% of world trade (including EU intra-trade) and 65% of the world population.Some of the media is calling the summit 'Bretton Woods II'. In 1944, the Bretton Woods Agreement followed a 21-day meeting of major world economies to recreate a global financial system which had been all but destroyed by the Great Depression and WWII. British economist John Maynard Keynes was very influential at the meeting.
The members at the summit this weekend are vowing to work together to again reform the global financial system, wrestle the global economy from recession and avoid future meltdowns. The event is being hosted by US President Bush (President-elect Obama won't be in attendance), so hopes of quick joint action are pretty low.
Below, is a report from Al-Jazeera which explains the link between this summit and Bretton Woods 64 years ago.
The Guardian, this morning, analyses the G-20 members, the state of their economies and how desperate each one is for a solution to be found (the fewer stars, the better!).
Argentina - $150bn public debt
Attending: Cristina Fernandez de Kirchner, President
Argentina last month decided to nationalise its 10 largest private pension funds, taking $30bn of assets into public ownership. Shares then lost a fifth of their value in two days. Argentina defaulted on its debts in 2001 and investors fear it may do so again.
Desperation rating: Five stars
Australia - $141bn public debt
Kevin Rudd, Prime Minister
Australia has eliminated net public debt but runs a gross one of about 15% of GDP. Tough regulation meant its banks had little exposure to the US subprime mortgage market but the fall in commodity prices is hurting. Australia could face recession next year.
Desperation rating: Three stars
Brazil - $590bn public debt
Luiz Inacio Lula da Silva, President
Brazil's economy is growing at 5% this year but is expected to slow sharply next year. Central bank is making credit available to help firms boost sales and it has intervened in the market to meet demand for the US dollar.
Desperation rating: Three stars
Canada - $900bn public debt
Stephen Harper, Prime Minister
The Bank of Canada warned that growth would hit zero next year. Weaker oil prices and lower US demand are hurting Canada. Last month, it guaranteed bank lending in a move that could leave the taxpayer liable for up to US$175bn.
Desperation rating: Four stars
China - $580bn public debt
Hu Jintao, President
China is taking a big spending $586bn approach as industrial growth hits a seven-year low. As holder of the world's largest foreign exchange reserves ($1,900bn) China is under pressure to aid global finances but stands to be the biggest winner from the crisis.
Desperation rating: Three stars
France - $1.63tr public debt
Nicolas Sarkozy, President
The French economy grew by 0.1% between July and September but recession may only be temporarily avoided. Paris has made a €320bn guarantee for bank lending and a $40bn fund to recapitalise banks. Sarkozy has announced the creation of a fund to protect French companies from foreign "predators".
Desperation rating: Four stars
Germany - $2.07tr public debt
Angela Merkel, Chancellor
Europe's largest economy officially entered recession this week after GDP shrank by 0.5%, the second quarter of decline. Germany has seen exports plunge. It is providing €400bn in guarantees for bank lending, plus a further €100bn to recapitalise its banks.
Desperation rating: Four stars
India - $637bn public debt
Manmohan Singh, Prime Minister
India is being tipped as a key player in helping bolster the global economy. Growth is expected to be 7.5% this year, down from 9% and disguising the slowdown in the industrial sector. Along with China, a big gainer.
Desperation rating: One star
Indonesia - $147bn public debt
Susilo Bambang Yudhoyono, President
Jakarta unveiled an emergency package last month in response to increasing pressure on its currency and stock market - including export tax cuts and ordering state-owned companies to repatriate foreign currency earnings.
Desperation rating: Two stars
Italy - $2.19tr public debt
Silvio Berlusconi, Prime Minister
The economy has contracted for a second quarter, by a worse than expected 0.5%. It is Italy's fourth recession in seven years. The government has set aside up to €40bn to recapitalise its banks and created a €650m fund to guarantee lending to companies.
Desperation rating: Five stars
Japan - $7.45tr public debt
Taro Aso, Prime Minister
The world's second biggest economy may be on the brink of recession. Despite this, Japan is prepared to take a leading role in helping get the global economy going, standing ready to offer $100bn in loans.
Desperation rating: Three stars
Mexico - $203bn public debt
Felipe de Jesus Calderon Hinojosa, President
The government is increasing spending by more than 13% to $231bn next year in a bid to boost the economy. The slump in the oil price hurt Mexico as oil revenues finance around 40% of its spending. The US slump has also cut the amount expatriate Mexicans send home.
Desperation rating: Four stars
Russia - $76bn public debt
Dmitry Medvedev, President
Russia has pledged a $200bn package for the economy and financial markets while the central bank has raised key interest rates to try to halt capital flight. Share prices have slumped while the rouble has been under heavy pressure. Russia has financial firepower but a fall in commodity prices hurts.
Desperation rating: Four stars
Saudi Arabia - $91bn public debt
King Abdullah
Its stock market is down 40% this year and the government has made $40bn available to its banks. However, the focus has been on Saudi pumping money into the IMF so that it can in turn bail out struggling countries.
Desperation rating: Three stars
South Africa - $88bn public debt
Petrus Kgalema Motlanthe, President
Its financial system is largely unscathed and could use its stronger bargaining position to press for more African voices in international forums such as the IMF. A potential gainer.
Desperation rating: Two stars
South Korea - $269bn public debt
Lee Myung-bak, President
No bank nationalisations but the government said yesterday it was ready to provide liquidity to the sector amid fears of mounting bad debts and slowing growth. Wobbling.
Desperation rating: Three stars
Turkey - $257bn public debt
Tayyip Recep Erdogan, Prime Minister
Turkey's debt was downgraded by credit rating agencies this week. It might need further IMF cash. Its currency lost a third of its value against the dollar last month alone.
Desperation rating: Four stars
UK - $1.2tr public debt
Gordon Brown, Prime Minister
Amid bank bail-outs and interest rate cuts the country sits on the brink of recession. The FTSE has lost around 40% since last summer. Desperation rating: Five stars
US - $8.4tr public debt
George Bush, President
The origin of the subprime crisis. Washington has drawn up a $700bn bail-out plan for the nation's banks, including a fund to buy toxic assets. Needs a solution fast.
Desperation rating: Five stars
EU
The eurozone is now officially in recession. The economy of the 15 countries using the euro shrank by 0.2% between July and September compared with the previous quarter.
Desperation rating: Four stars
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