The week in review: G20 addresses global crisis

Vincent Lingga ,  The Jakarta Post   |  Sun, 04/05/2009 12:04 PM  |  Opinion

One communiqué won’t resolve the global economic crisis at a stroke.  But as World Bank president Robert Zoellick noted on the eve of the second Group of 20 Summit,  “at a time of lost confidence, we need deeds that restore the public trust that governments are up to the challenge.” 

That, we think, was what, by and large, the G20 leaders delivered Thursday with their declaration of strong commitments to coordinated programs of action to  restore economic stability shortly and recovery as soon as next year.

The G20 communiqué gave the markets and the public a sense of hope that some important action will be taken. It sent a clear message that developed and developing countries can and do work together in their common long-term interests.

The meeting in London of the heads of government of the Group of 20 developed, emerging and developing countries, including Indonesia, was indeed a defining moment amid the current economic crisis.

The 29-point communiqué stipulates the right top-priority programs of action to resolve the global economic slump and financial crisis and, thanks to the important role of emerging countries such as Indonesia, the meeting addressed largely the basic interests of developing nations.   

Certainly, the forum significantly bolstered Indonesia’s international stature and this could boost its confidence in leading the 10-member ASEAN grouping.

The meeting also provided incumbent President Susilo Bambang Yudhoyono, who is seeking reelection in July, a political grandstanding.

The emerging and developing economies are surely the greatest beneficiaries of the G20 agreements on: Trebling the resources of the IMF to US$750 billion, providing $100 billion in additional lending by multilateral development banks and $250 billion of trade finance support.

Trade is the lifeblood of the global economy and the world needs more of it at this critical moment, not less. World trade depends heavily on trade credit, which has all but collapsed during the current financial crisis, effectively throttling the flow of goods.

Yet more encouraging is the fact that the trebling of the IMF resources also coincided with the new IMF lending policy of not attaching stringent strings to its loans as it harshly did for Indonesia after its 1998 financial and economic crisis.

The G20 summit also agreed on an elaborate action to clean banks of toxic assets, strengthen financial supervision and reiterate commitment to promoting free, fair global trade (resisting protectionism) and investment in compliance with the World Trade Organization rules.

The challenges ahead are formidable: The World Bank, in its latest estimate announced on the eve of the G20 Summit, foresaw GDP growth in the developing world at  2.1 percent in 2009, down  from 5.8 percent in 2008, and global growth  at minus 1.7 percent, the first decline since World War II.

A few days earlier, the WTO forecast a decline of 9 percent in the volume of world trade.

But a note of caution is in order here. Despite the Summit’s success, it will not be an end point but a staging post on the road to recovery, just one part of a process already on track, a long-running task.

Meanwhile,  Malaysia got a new prime minister Friday as Najib Razak was sworn in to replace Abdullah Ahmad Badawi, who took office in October 2003.

Abdullah had been pressured to step down after the ruling National Front coalition suffered its worst results ever in general elections a year ago.

A hundreds of workers continued to search for more bodies of victims killed when the Situ Gintung dam at Tangerang, Banten, burst Friday morning last week as the usual blame game started and kicked off heated debates on which parties should be held responsible for the disaster.

One hundred bodies had so far been discovered and identified but many suspected more victims could have been washed away into the nearby Pesanggrahan River.

But while families still mourned for their dead and missing siblings and relatives, political parties and candidates went all out with their open campaigning this week in a last bid to canvas more voters for the April 9 legislative election, before the outdoor campaigning period ends this Sunday.

Despite the mood of seeming apathy among the people, major political parties still mounted street rallies with motorcades causing traffic gridlock and indoor mass gathering featuring famous artists and musicians.

Worrisome, though, three days before voting day, the mass media still carried plenty of stories screaming of great concerns about voter list frauds or markups in various areas and problems related to the logistics of the country’s third free election after the authoritarian Soeharto fell.   

Yet more troublesome was the announcement by the International Foundation for Electoral Systems (IFES) on Wednesday. Its polling results disclosed that more than 150 million of the estimated 170 million eligible voters desperately needed more information on various technical aspects of the electoral process.    

That portends a big risk of a large number of spoiled votes cast because of voters’ inability to cast their ballots correctly.

The survey, involving 1,200 respondents in 19 provinces, found that 84 percent of the respondents said they needed more information on candidacy requirements, 83 percent on vote-counting procedures, 80 percent on when and where to vote and 74 percent on voter registration. 

Overall, IFES concluded, only 22 percent of the respondents confirmed they had a great deal or fair amount of information on the legislative elections.

— Vincent Lingga

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