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Group of 20 leaders

Adrian Wyld

[1]WE, THE LEADERS OF THE G20, are united in our conviction that by working together we can secure a more prosperous future for the citizens of all countries.

[2]However, empty platitudes aside, if presented with an opportunity to make the citizens of our own country more prosperous at the expense of someone else's country, 20 out of 20 of us will take it, most of the time.

[3]Seventeen of us still think the current situation is largely the Americans' fault, anyway.

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[4]When we first gathered in November, 2008 to address the most severe world recession our generation has ever confronted, we pledged to support and stabilize the global economy and, at the same time, to lay the foundation for reform. That helped.

[5]But we have now reached the point where these global summits achieve little, aside from stimulating temporary employment in the airline, hotel and media sectors, in addition to providing short getaways to faraway locales for hundreds of political hangers-on, at the public's expense.

[6]This outcome in Seoul was to be expected. Two years ago, fear of a global depression was very real and widely held by G20 nations. Since then, our economic fortunes have rapidly diverged; therefore, so have our wishes and our political imperatives.

[7]It is not realistic to expect the Chancellor of Germany, whose economy grew at a 9-per-cent annualized rate in the second quarter, and the President of the United States, whose economy is growing hardly at all, and the Prime Minister of the United Kingdom, whose home will soon be torched by a marauding gang of students, to find agreement on the specifics of what must be done in something as complex and multifaceted as the global economy.

[8]Hence, we must resort to vague aphorisms. Risks remain. We must stay vigilant. Prudence is essential.

[9]We pledge to strengthen the assessment process by which we monitor and evaluate the internal and external pressures that affect the sustainability of the global financial system. We agree to strengthen and enhance the mechanisms and processes by which we will co-operate on reforms, in the name of making changes that are conducive to economic growth, taking into account national and regional circumstances, where appropriate.

[10]Further, we agree that anyone who can figure out what Section 9 really means is a certifiable genius.

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[11]Were we a slightly smaller group, minus one particularly powerful country whose political system has been recently overwhelmed by something called the Tea Party movement, this communiqué would probably highlight some of the flaws in current American economic thinking.

[12]In particular, such a communiqué would take issue with the U.S. proposals to drop $600-billion out of a helicopter and to place limits on the size of the trade deficit or surplus any country could accumulate, in order to rebalance a global economy that is still far too imbalanced for anyone's comfort.

[13]While the latter may be noble in its aim, we would note that it is somewhat contradictory for a country to express grave worry about the size of its trade deficit, then refuse to consider increasing taxes even modestly to reduce a serious fiscal deficit, on the grounds that such a tax increase would leave its citizens with less money with which to buy things at Wal-Mart that are made in China.

[14]However, we are not the G17, so please forget that we mentioned it.

[15]We view with concern, and a minor amount of schadenfreude, the situation in Ireland and urge the Irish government to move toward a quick resolution of its unresolvable financial mess. We note as a form of encouragement that Argentina is a member of the G20, so nothing is hopeless.

[16]We do remain deeply apprehensive about the lopsided nature of the economic recovery. We note that global imbalances - such as the accumulation of large surpluses in fast-growing, export-dependent nations, in particular China - contributed directly and in a major way to the buildup of unhealthy financial bubbles in the developed world that eventually led to the financial crisis of 2008. We also note that these imbalances have not been cured.

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[17]However, we have to acknowledge that the Seoul summit proves the fallacy of the notion that 20 men and women in a room could, over two days, negotiate a co-operative solution to such a difficult problem, particularly when their primary concerns are, almost without exception, domestic politics.

[18]Therefore, to meet the vague commitments we have made in Seoul, we pledge to set up a working group to tackle this issue in advance of the G20 summit in France in 2011, at which time we will solemnly pledge to solve the issue at the G20 summit in 2012, wherever that may be.

[19]On the bright side, the kimchi was fabulous.

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