It would be however be wastage of time to further analyse thecauses and circumstances which led to this fiasco, but it would begreat injustice to the economic history also, if some glaringaberrations and maladies of this financial order are not enunciatedand diagnosed. ‘Crisis is the engine of change’; therefore, this crisiswould also bring about changes in the global financial order, anorder which came into existence after ‘Bretton-wood conference, Itis therefore; when the global economy is facing the threat of recession and global financial order has failed, the demands arecertainly to be made to change the global financial order.
LONDON SUMMIT- G-20(A MISSED OPPORTUNITY)-
Thesummit held in London to discuss the affects of aftermath of worldeconomic crisis and steps to tackle it failed to evolve a consensus.Many people called it as the 2
Bretton-Wood conference andexpectations were soaring in hype. There was euphoria all aroundbut it also burst like the ‘housing bubble’. The world leadersspecially the members of G-7 like Britain, Germany, France andAmerica were vertically divided. Germany and France were of theopinion that the screws of financial institutions should be furthertightened because what they thought, and to some extent they arecorrect also, that the ‘excessive financial leverage’ and ‘bottomlessgreet’ of these institutions are the root cause this crisis. USA and UK on the other hand, were averse to it and pleaded that tightening of screws would mean reversal of process of free market economywhich is the basic of the capitalist economy. Anyway, the latterprevailed and under their pressure nothing tangible could emergeout of this much published and hyped summit. Well it was not afailure too.Most important issue which was raised in this summit was the issueof‘NEW
’ china had raised this issuewell before the summit could begin in April, 2009. The governor of people’ bank of china, Zhou Xioachun had raised it vociferously.China wants that the USD be replaced by Special drawing rights(SDRs). This demand of china caused a stir in the world politico-economybecause it is nothing short of determined challenge to theestablished financial hegemony of Americans over the world.Although USA has rejected this proposal out rightly, this demandmay be raised again in the forthcoming Pittsburgh Summit inSeptember, 2009 and may be supported by countries like India,Russia, and Brazil and host of others.