Jul 08,2017 – JORDAN TIMES – Helle Thorning-Schmidt
Almost a decade ago, facing a near-collapse of the financial system and the risk of a depression, the world needed a new form of leadership to navigate and restore confidence in the global economy.
That is why, in 2009, at his first global summit as US president, Barack Obama joined then-British prime minister Gordon Brown to spearhead the G-20’s upgrade, making it the world’s preeminent economic forum.
What they created helped solve one immediate problem, but it let linger another global challenge.
With the Obama-Brown upgrade, the G-20 — comprising 19 of the world’s largest advanced and emerging economies plus the European Union — took over the role played by the G-7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the US).
Obama and Brown knew that a group that did not include rising economic powers like China and India could not propose effective solutions to the global economy’s biggest problems.
Whatever one thinks of the G-20 — and it is by no means perfect — this more inclusive grouping helped overcome the consequences of the 2008 global financial crisis.
With an expanded coterie of world leaders taking charge, jittery financial markets stabilised, and the G-20 then helped launch and sustain a global economic stimulus, led by China, which reversed the downwards spiral. The G-20, which just met in Hamburg for its annual summit, must confront the challenge of inequality.
With the world’s richest 1 per cent now owning 40 per cent of its assets, the benefits of growth are not being shared in a way that is either economically efficient or politically sustainable.
This crisis had been building for many decades, but it accelerated sharply after the global financial meltdown that the G-20 helped stem. As a result, disillusioned and disaffected voters in advanced economies are challenging established political parties to find solutions or cede power, while millions of people from poor countries, unable to envision a future at home, are risking their lives by crossing deserts and seas in search of economic opportunity.
It is up to the G-20 to deal with the global inequality crisis with the same urgency it showed during the Great Recession of 2008-2009.