As the G20 Summit drew to a close last week in Seoul, South Korea, the world is left wondering what progress was made. One of the main problems that was discussed at the summit was the trade cap and currency tensions across the board. Though there were plenty of problems to be discussed, little progress was made in any respect because there was little to no consensus on most issues. While the members of the summit were busy not being able to agree on anything, the financial crisis in Europe was growing.
One problem that weighs heavily on my mind that was not resolved is the monetary and exchange rate policies. These policies were set to be negotiated but were not completely resolved, and the result is the reduction of value of the U.S. dollar. China has currency issues of its own, with the value of Chinese currency slipping considerably. There is little room for the growth that is necessary for the value of Chinese currency to rise. This discrepancy in value of currency makes it hard to regulate the current monetary exchange system.
The inability of the summit to come to a clear consensus about monetary exchange is troubling because this means that there is a potential for exchange rates to fall and increase with no real controls in place over them. There is a good chance that prices rising and falling could cripple emerging and already established economies. The summit also addressed the influx of money into the U.S. economy in an effort to ease the effects of the financial crisis and how this may affect the value of the U.S. dollar.
Overall, the summit addressed issues without really resolving them. There was much talk about the issues that persist in world economies today, but there was no real progress toward resolving these issues and making a united policy to help regulate money flow. Though the financial crisis in Europe overshadowed the progress of the summit and made for a distraction through the proceedings, the summit did raise questions that needed to be looked at.
Though I do not particularly understand all the jargon that is involved with the G20 summit, it easy to tell that there is still unresolved tension to be worked out, hopefully before the next summit.
Martin Khor, Inconclusive end to G20 Summit, www.thestar.com