The G20 is Changing the World

The G20 is Changing the World
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
April 6, 2009

The Group of Twenty (G20) London Summit, the focus of world attention as major stock markets rose and fell, has adjourned. The results of the summit were better than expected. They have already changed the face of a world suffering from economic recession. In the face of such change, Taipei must acknowledge the harsh realities, and change in response.

The cacophy surrounding the G20 summit cast a shadow over the prospects of the member nations. But this is the weakest the global economy has been since World War II. No one could afford to have the summit fail. Therefore it adjourned with smiles all around. Never mind that France and Germany walked out. Never mind that Mainland China and the United States failed to address the divisive issue of international reserve currencies. Never mind that the London Summit Communique set grand goals and made long-winded declarations. It nevertheless came up with three specific measures to save the global economy. These include tripling the International Monetary Fund (IMF) reserves, expanding IMF issued Special Drawing Rights (SDR), and providing trade financing. The communique remained deliberately ambiguous regarding increased fiscal stimulus programs, international financial regulation, and anti-protectionism measures.

The summit failed to persuade the United States to honor the G20's collective commitment to increase public expenditures. But President Obama successfully prevented the G20 from becoming a "Badmouth the United States" summit. France and Germany, which wanted to establish an explicit regulatory framework in international financial law, failed to achieve their goal. Mainland China, Russia, India, and Brazil, as emerging nations, wanted their voices heard. Although the IMF offered a pulpit, they were unable to make themselves heard. The G20 Summit Communique failed to satisfy participants, but it gave outsiders a field day, especially the new democracies of Eastern Europe. IMF funds have been increased to 750 billion USD. Therefore the IMF can act as an emergency fire brigade. It can provide financial assistance to governments in crisis. It can prevent financial crises in individual nations from becoming regional crises. It can provide insurance against global financial instability. Every nation benefitted. Once the communique was issued, every major stock market rose.

The G20's large-scale injection of resources into the IMF increased its ability to rescue ailing economies. Emerging economies have also injected resources into the fund. This will promote substantive reform of the IMF, including improved representation, changes in financing, and the establishment of SDRs. Long standing mismatches between IMF representation and the economic strength of member nations has led to imbalances in IMF member nation oversight. It has also allowed poor countries to become the economic tools of rich countries. This has led to even more uneven development, and current demands for reform.

More importantly, the issuance of SDRs is the exclusive prerogative of the IMF. The expansion of this prerogative will pave the way for a new international reserve currency. Next year is critical. The SDR basket composition is reviewed every five years. In addition to the US Dollar, the Euro, the Japanese Yen, and the British Pound, the rapidly rising Renminbi is the international currency that has caught everyones' attention. A prerequisite for the review of the SDR basket composition is the internationalization of the RMB. This is a major challenge for the Mainland Chinese economy. Beijing has been aggressively signing currency exchange agreements with other nations recently. Beijing is clearly proceeding methodically. Under these circumstances, Taiwan, which is highly dependent upon trade with Mainland China, will be affected. Secure business transactions, cross-Strait currency electronic clearing, and currency exchange mechanisms all require advance planning. The G20 summit has committed five trillion USD to implement the largest economic rescue package in human history. But because increases are already planned, this commitment will not provide any additional stimulus. What's new is demands that the IMF regularly reassess of the effectiveness of various governments' implementation. This will establish constraints. It will also demonstrate the degree of determination summit leaders have toward saving their economies. It will give the world economy what it needs most -- confidence. Once confidence has been ignited, additional fuel can be added to the flame, in the form of various nations' stimulus packages over the past half-year. The resulting recovery may proceed at a better-than-expected pace. Once the pace picks up, it will be time to think about exit strategies.

Of course, Mainland China's initiative at the G20 summit cannot be ignored. The G20 is a multilateral political forum. Based on their economic development, its members fall into three camps: the United States, Europe, and emerging countries. But just prior to the summit, Beijing introduced a controversial topic. It once again used the Sino-US leaders' dialogue to shape the G20. This has allowed Beijing, which was an opinion leader during past international forums, to display its newly-gained confidence. It means that Beijing will actively participate in and even take the lead on more and more international issues. This is a development that is free of ideology. Taipei must neither accept it in its entirety, nor reject in its entirety. It must understand how Mainland China is changing under Beijing, and learn how to respond.

G20正在改變世界
【聯合報╱社論】
2009.04.06 04:30 am

全球矚目的二十國集團（G20）領袖會議在各大股市的漲聲中落幕，並以超乎預期的成果，改變正苦於經濟衰退的世界；面對轉變中的世界，台灣既要認清事實，更要積極應變。

各國在G20高峰會前發出的雜音，一度為這次集會的前景蒙上陰影。不過，值此二次世界大戰後經濟最脆弱的時刻，任誰也承受不起峰會失敗之過的無形壓力，還是讓峰會在微笑中結束，既未發生法、德退席的尷尬，中、美也未討論尖銳對立的國際儲備貨幣議題；儘管倫敦公報依舊是目標宏偉、論述冗長的宣言，但還是拿出了三項拯救世界經濟的具體對策，包括將國際貨幣基金（IMF）的資金規模增加兩倍、擴大發行IMF特別提款權（SDR），並提供貿易融資等；而在強化財政刺激、改善國際金融監管及反貿易保護主義上，則持續保持各有解讀空間的模糊。

對期待G20共同承諾擴大公共支出的美國而言，這次峰會是不成功的，但歐巴馬總統的柔軟身段，成功地讓G20未淪為「批鬥美國」大會；對要求明確訂立國際金融監管架構的法、德來說，當然也沒有達陣；至於一心提升新興國家發言權的中國、俄羅斯、印度及巴西，雖然找到了IMF這個使力點，卻還無法使上力。不過，G20結論雖沒能讓圈內人滿載而歸，卻讓圈外人樂不可支，尤其是東歐等新興民主國家，因為IMF資金規模擴增至七千五百億美元，可讓IMF扮演強大的金融救火隊，提供危難國家資金援助，避免個別國家的金融危機擴大為區域危機，無疑是為全球金融安定提供了保險，各國同受其惠，因而結論一出，主要股市無不報以熱烈的「漲」聲。

G20大手筆挹注IMF的資源，除了增強其救援實力，隨著新興經濟體資金的進駐，也將在實質層面上推進IMF的改革，包括代表權的分配、籌資方式的改變、 SDR的組成等。IMF的代表權與經濟規模長期不相稱，不只讓IMF對成員國的監督尺度失衡，還成為富國藉以干預窮國經濟體制的工具，導致發展更不平衡，如今已面臨改變壓力。

更重要的是，SDR此一專屬IMF的國際準備資產將擴大發行，為成為新的國際儲備貨幣鋪路，加上明年就是五年一調SDR內含貨幣及權重的關鍵期，其會否在現有的美元、歐元、日圓及英鎊之外，加上快速崛起的人民幣，已是國際貨幣體系最關注的事；SDR貨幣重組的前提是人民幣的國際化，這對大中國經濟更是一大挑戰，而以近期中國與各國積極簽署貨幣互換協議的動作，北京政府顯然已在有序推動。依此情勢，高度依賴中國大陸貿易的台灣，勢將受到牽動，企業交易安排、兩岸貨幣清算及兌換安全等方面都已須及早規劃。

另方面，G20峰會雖然承諾執行人類史上最大規模的五兆美元振興經濟方案，但因是既有計畫的加總，這項承諾沒有帶來更多的刺激；新穎之處在於要求IMF定期評估各國執行成效，形成了另一種約束力，也展現了與會領袖齊心挽救經濟的決心，帶給世界經濟現下最需要的信心；而信心一旦點燃，輔以各國過去半年來種種刺激措施備置的薪柴，復甦之火也可能以超乎預期的速度、幅度竄起，屆時需要的政策退場之路已須預想。

當然，中國大陸在這次G20峰會的主動出擊，更是不容忽視的發展。G20是個多邊政治論壇，也可依發展模式及程度簡化為美、歐及新興國家的三方陣營，但北京在會前連續拋出爭議話題、再運用中美領袖對話塑造的G2格局，已讓中國從昔日國際論壇的聽眾躍升為意見領袖；其所展現的外交自信，也意謂在愈來愈多的國際議題上，中國將積極參與，甚至可能主導，並將產生影響。這是一個無涉意識形態的發展，台灣該做的既不是一味的迎合，也非完全的排斥，而是重新去認識正在轉變中的中國，找出自己的路。