Category — Politics
Cuba/Politics
As our readership is continuing to develop, here is a piece from San Miguel Allende, Mexico, that was forwarded in the context of my last article on Cuba. It’s not exactly a politically based article, but it does represent some of the substance of the Cuban culture, and I trust you’ll find it interesting, as did I. The piece is followed by a bit of prose-poetry that I did, which seemed to capture a bit of the varying social and political landscape of the country. The article originally appeared in the newspaper Atencion San Miguel.
— Jim Palombo, Politics Editor
Out of Cuba, 2007
By Lou Christine
The consensus is that the one-time architectural marvel called Havana is a decaying city coming apart at the seams. Havana is hot and humid. The place is a bit pricey and there’s hardly anything to buy. The food’s insipid but the music’s spicy. And the women do live up to their erotic reputation! From my perspective, after spending five days in Havana, all the above rings true. Yet my slant here is strictly a thumbnail sketch of Havana, and can’t be compared to the whole of the nation and its people.
The economic effects from the 40-some-year, U.S. embargo and Soviet pull out have both isolated and reduced Cuba into an impoverished existence. Havana’s past splendor is apparent, as is its present anemic condition. One could bray, “What the hell happened here? Who’s in charge?” Putting those negative aspects aside it’s the Cuban people and their unique spirit that makes the place fascinating.
I skipped the government provided tourist hotels deciding to rent a second-floor apartment (casa particular) in a run-down barrio of old Havana. The neighborhood could be compared to tenement sections of the South Bronx. Despite the rough surroundings I found Cubans friendly, accommodating and hospitable. Hardly anyone seemed serious, if anything most acted sophomoric other than the downtrodden that have been crushed by the system or bad fortune.
My landlords were Jesus and his wife Dora. The apartment wasn’t spiffy yet clean with essentials. The affable couple had me feeling welcome and comfortable as I began to experience a slice of life in old Havana. For some reason they both called me Louie.
“Louie! Louie!” was shouted by a voice in my direction as I bopped down the block the following day. It was Jesus. In Latino fashion he hand signaled me to hold up. Catching up he latched onto my elbow only saying another Louie while leading me into the back patio of a dingy bar. The TV blared. Some Cuban pretty boy was up on the screen singing his heart out. Jesus ordered two cold cans of Crystal and got down to business.
Jesus said, “Louie,” two more times. We were up to five Louies and I still didn’t know what was on his mind. Evidently, the night before, I mentioned an affinity for baseball when Jesus clicked on the apartment’s TV with a game in progress. Sipping his beer and moving his hands in a certain way, Jesus began to paint a vivid picture. It was in 1951, Yankee Stadium, the top of the ninth and the great, Boston Red Sock, Ted Williams, was at bat. The Yanks were ahead by a run, with one out, and a runner on third. Jesus’ uncle had promised the then nine-year-old a trip NYC. to see a big-league game and his favorite player, Yankee, Joe DiMaggio.
Jesus paused his story to elaborate how he revered DiMaggio and how jolting Joe was “El Mejor!” After the brief DiMaggio eulogy Jesus continued telling me how he was seated in the left-center-field bleachers. Williams launched a screaming line drive seemingly out of centerfielder DiMaggio’s reach, yet the Yankee Clipper got a good jump on the ball and made a spectacular run-saving catch. Jesus became more animated describing how the Red Sox runner on third tagged up and began to race home to tie the game. Gracefully, according to Jesus, DiMaggio maintained his wherewithal, retrieved the ball from his mitt, and rifled a bullet toward Yogi Berra, the Yankee catcher, to make the tag out and to win the game! Jesus then just slowly nodded his head and looked away for the moment as he savored the past.
Those are the indelible, first-hand memories the Cuban has of his hero, Yankee Stadium and his beloved baseball. Then Jesus extended his chest somewhat telling me how he went on to become a hard throwing pitcher and a pro prospect, saying he threw a number of no hitters. In 1958 he signed a $5,000 minor league contract with the Brooklyn Dodgers but all changed with the revolution and his dream to become a big leaguer died.
From the looks of things, in present day Havana, many dreams died back in 1959. I am not qualified to judge if Uncle Fidel’s system is a travesty of justice, or a continuous-and-challenging socialist experiment with a severe case of spinning wheels disease. On the surface things don’t look all that prosperous. Yet discounting the obvious pitfalls, when ferreting a bit deeper, there’s something striking about the place.
Up to the point with Jesus I was having a love-hate relationship with the city. I almost wanted to leave after fifteen minutes. There were waiting lines at immigration and customs and longer lines for everything else. But regardless I could also sense there’s a special feeling, being in the mix with the multi-racial Cuban people that had me feeling so alive!
In Jesus’ case, most of our conversations covered the golden age of baseball. He doesn’t think much of today’s big leaguers. We searched our brains making a list Major-League 500 home-run hitters, those with 3000-hits and 300-game winners over their careers. Once back home I checked. Jesus and I nailed about 90% of the 60-some baseball playing icons. I seemed to be the called-for soundboard to talk the about the sport we both love.
I was living mostly a one-block existence. Fellow sanmiguelense, Jeffery Brown, was my neighbor. We shared shots of Vodka with some men, out of the trunk of a ‘54 Plymouth resting on its axles. There was Yasser, mid-twenties, strong and handsome. He inquired about gyms and weight-lifting equipment in the States. He hates his name. Seems he was born on the day Yasser Arafat visited Cuba and therefore stuck with the moniker. One of the men, Manuel, Jesus’ brother-in-law wanted to know about present day cars. He frowned some when I told him today’s autos are all about computers and that back yard tune-ups are out of the question. He and his cronies were then installing a clutch into a ‘49 Hudson. The men had us feeling at ease and the Vodka helped. We took more swigs and posed for buddy-buddy photos. I asked about the Soviet influence. Were they still around? Manuel said the Russians never really fit in, that they built decent roads but ugly buildings, along with bad running cars, motorcycles and tractors, then the Ruskies left them in a lurch. All and all the men agreed that the Russians presence meant little one way or another, other than the introduction of Vodka.
After a day and a half “Louie! Louie!” peppered my ears from various directions each time I took to the street. I smiled. They smiled back. Take in part, it’s their block, and residents on such close-quartered blocks don’t miss a blink. Ironically I was residing on Calle San Miguel, the length of your average street here in San Miguel. The row homes were three-storied, with six-to-eight apartments in each. Most were occupied with Havanans, yet I observed tourists with luggage exiting taxis then disappearing behind doors.
To appreciate Cuba one has to seek out the silver linings from what seems like a hopeless situation. The system offers Cubans little incentive, so goes a desire to upkeep buildings and infrastructure. The streets are teeming with life 24/7. That memorable, far-out alien bar depicted in the film Star Wars seems pale compared to the outlandish street scenes in Havana. There’s big-time stoop life primarily because of the stifling heat and humidity; kids play baseball and grab ass using home-made baseballs fashioned from rolled up white tape and broom sticks and sticks of all kinds are swung bats. A parked, banged up ‘55 Chevy might be first base, and broken manhole cover second, a curbside third, while home plate might be a cutout portion of a cardboard box. Some kids just play catch or handball. With the ’50ish cars and street baseball alike, boyhood memories flashed in my mind’s eye. I could have been any one of those kids. I saw some sun-baked basketball courts, mostly deserted, marred with potholes and lopsided backboards, minus baskets. Kids played soccer with makeshift balls and even tin cans.
The plethora of street scenes are both poignant and heart breaking; men get haircuts in the street, transmissions from vintage American cars, now jalopies, are yanked out with brute strength and then jury-rigged as to get them back on the road. The shelves of the few available tiendas are bare, except for nine or ten items; people look disheveled and beat, except for the exquisite smiles they dole out toward neighbor and stranger alike; the pulsating beat of Latin music pours out of barred windows and open doorways. One day I went out to the avenue and bought eight pork sandwiches. Problem number one: The sandwich maker didn’t have a bag. I think I’m resourceful and tried to buy a bag but didn’t possess the right currency, but a kind lady gave me one. Then I was in search for mayonnaise or mustard. I would have been better off seeking out the Holy Grail. None was to be found, but low and behold in the basement of a foreign investment market I found mayonnaise. Voila! But didn’t you know the computerized cash register system crashed and there would be no more sales that day, mmmmm, dried pork sandwiches.
Tourists are forced to buy a currency called CUC. It’s a government sponsored rip off regardless if cashing dollars, Mexican pesos or Euros. Ten to fifteen percent comes off the posted exchange. You’re getting a Cuban CUC for about a dollar-thirty. Prices in tourist joints are more expensive than here and food wise it’s mostly lousy, ill prepared with inferior ingredients. I ordered Chow Mein in a Chinese restaurant, only thing there were no noodles.
As earlier noted, countless old Fords, Chevy’s, Hudson’s and Studebakers rumble along Cuban boulevards as rusted hulks held together by who knows what? The state of public transportation is atrocious. People are crammed tight into deteriorating buses with no room for their guardian angel. With the heat, sweat and mass of humanity one can only gasp and say, “but for the grace of God.” Taxis are too expensive for most except for community cabs that are packed to full capacity, dropping some off and taking on others. Many hitch hike, standing in droves, off sidewalks, waving down anyone who might pick them up. As the pecking order goes the young and better looking chance to hitch a ride rather than the elderly or decrepit.
The men are forward and the women receptive. I eyeballed mostly women whose dress is alluring and enticing, dolled up in some tawdry chic that beckons with the hotties featuring enticing curves and plunging necklines, primarily, because in reality, that is all they have to show for themselves. In most other places chicks wiggling their behinds in such a way while planted in exaggerated high-heels and wearing short-shorts would be perceived more like cheap strumpets. Inside Havana that look is hardly out of the ordinary. The men’s dress on the most part was shabby and wrinkled. I suppose in the men’s case their well-defined bodies do the talking.
Love or lust is constantly in the air. Even the most unsightly tourist, fat, bald or snaggle-toothed can be seen as a desirable Romeo, that’s of course if he has fresh money in his pocket. That easy availability of women mostly arises out of hunger and need. Cuban women do show case a certain one-of-a-kind sensuality that seems inbred. Such overt actions later on might place a few extra staples on the family table. Horny men attracted to such vivacious women might just shrug their shoulders and sum, “When in Rome…” or those with conscious may ask themselves if they are taking advantage of an undeniable female commodity or participating in some sort of lurid exploitation? I don’t have the answers.
Under the surface breathes an oppressive state. Jesus warned me there are street-corner snitches and police everywhere. A woman just sharing a taxi or walking down the street with a foreigner can be whisked away by the police for doing either. Often consequences have females spending a couple of months in the slammer and a mark on her record to boot. Girls constantly talk and worry about the police.
The government is well aware of the prostitution yet for the hooker in Havana it’s a Catch-22 situation. They have to be tricky to procure tricks. Cuban women of any profession are discouraged from frequenting with tourists other than in the daytime in public places. Only female employees are allowed in hotels. Yet just outside on sidewalks of some tourist, oriented, boom-boom establishments, sanctioned by the government, the girls gather in bouquets and are permitted to enter if accompanied by a tourist. Then it seems the government turns a blind eye that makes the whole man-woman thing seem ambiguous at most. Many, in actuality, are not professional streetwalkers but country girls merely in search of a meal, some drinks, a nice time and pocket money. Yet the pocket money they receive for their charms often equals a month’s pay. For men, reciprocated affection offered by women is almost automatic; “You were nice to me so now I’ll be nice to you.”
Cuba does hold claim to the world’s lowest AIDS rate. Reason being: Random HIV tests. At first people infected with HIV were whisked off to a sanitarium, for life. In 1998, the government permitted patients who have been properly indoctrinated and treated to return home but under a state of house arrest.
Many young gals from the countryside apply and anxiously wait for coveted visas permitting them to stay in Havana up to two or three months. They apply for the get-away visas under the guise of schooling or to visit relatives. Yet on the most part, probably because of the wireless coconut, they know Havana has brighter lights and a slew of generous men from around the world who seek female company — their possible escape. Cubans do not have access to the Internet’s super highway. They can e-mail and telephone but are kept much in the dark about what is taking place in the outside world. They see only what the regime wants them to see, period!
I queried some about their impression of foreign men and men in general. My sampling had some of the gals telling me they don’t like Italian men, especially those from the south. Women, even streetwalkers, have their dignity and the girls said Italian tourists were rude and presumptuous in a place where being presumptuous is a gimme. The French, Greeks and Spanish, in their view, act stodgy and above them. German and Scandinavian are said to be polite yet distant. When I asked about Mexicans or other Latinos the girls pointed to their elbows and patted them with their other hand, a sign that indicates cheapskates. “And they lie,” said Magalia, saying how they promise marriage faster than the rest. She likes American men, primarily because they are generous but they are loud and brag too much. As for Cuban men, Magalia made a face and extended her open hand and counted off her fingers one by one emphatically, “Uno, dos, tres, quatro novias, siempre… ellos el pejor!”
During multiple conversations with Havanans the men were more restrained about Cuba’s situation and I refrained from pushing the subject. Men of age wanted to speak about glory of the past. Taxi drivers openly spoke about long hours but the money was great. Only one cabbie tried to sell me that Cuba is a wonderful place where everybody is equal and it’s only getting better. There are devilish billboards showing Bush and Hitler as equals. Posted images of Che are everywhere yet there aren’t many images of Castro. Women looked to the future and were more expressive about the state of things. “Get me out of here!” shouted out from within them.
“Everybody’s afraid of the police,” one women told me in a low voice inside a tourist restaurant as two cruised outside. “They make us go to rallies.” For bigger rallies thousands are bussed in from the countryside with a 48-hour pass to stay and party in the capital city but only after attending a mandatory rally. “We cheer real loud, because if we make the government happy maybe they will cut short the rally and we can go party.”
I find it ironic that the Marx’s and Engle’s utopia of socialism has failed worldwide and today that sort of none functioning lifestyle hardly survives other than in a few bastions of repression like Cuba. I find it just as amazing that a taxi driver or tour guide can make ten times the money compared to the government stipend trickled down to a trained doctor, engineer or scientist. The general population is rationed some rice, beans and few other staples on a monthly basis that lasts no longer than a week. That’s the reality of life in today’s Cuba.
Then, in spite of the failed dream, there is the elite who enjoy the status of privilege due to government appointed professions and housing. Cuba claims to have a 100% literacy rate and free medical for all. Cubans expressed to me that the bureaucratic hoops they have to jump through for health care isn’t worth the hassle unless there is an absolute emergency. Havana’s embassy row is as stately as it gets, where upscale embassies bask along side botanical finery while facing a wide, sparkling thoroughfare.
Hotel Nacional is a first class hotel. Its staff is bilingual and sharp. Black, sleek, Mercedes’ taxis wait outside for tourists or big wigs in the government. Yet the gal tending the bar yakked on the phone and finished her smoke before waiting on us. There are a few square blocks, surrounding the capitol, impressively restored and pristine. Hotel Raquel glistens with marble floors and columns’ indicating a regentrification is in vogue yet out of the reach for the average Cuban. The Museum of the Revolution and Art Museum are well cared for as are a few other buildings and cathedrals in the vicinity. That’s about it.
Maybe I should have done more clubbing or drank where Hemingway once did, or maybe I should have delved more into the artsy social scene and ate at trendy tourist traps or rode around in a horse drawn carriage. Maybe next time. I’d be remiss if I didn’t mention the music. One has to be dead to not appreciate the hot Latin tunes along with the enticing lyrics and tight rumba rhythms. That part of Cuba’s soul can never be replaced or squashed by a warped system. It’s their national treasure. When Cubans play or sing music they appear as free as birds. But when I peer into the tired and worn down faces of Jesus, Dora and the all the others who have been denied the advancements of modern society, regardless of Capitalism’s own pitfalls, I can’t help but think about Cuba’s once glorious past, minus Batista, and what would have occurred if Cuba wasn’t so abused and neglected.
Perhaps my mind-set parallel’s Jesus’ the same way he pooh-poohed today’s spoiled and pampered Major League baseball players who he doesn’t think that much of. Just as Jesus wonders about what happened to his beloved baseball, I wonder about what happened to the first city of the new world which might have us both asking, “Where have you gone Joe DiMaggio?”
* * *
Cubaism
Flat, spread into being
Two dimensional, cut-up, cut across
Located, dislocated
Ordered disorder
Contrasting, contradictory
Turning inward, turning away
Existential, god
Poorness without poverty’s soul
Hopeful despair
Tearing a smile
Redemption, dereliction
Ridiculous, sublime
Darkly lit canvas
Art-life, life-art
Still life
For all to see
August 20, 2010 No Comments
Politics
Quizas
(Perhaps)
By James Palombo, Politics Editor
It was less than a two-week visit. One could argue that this was hardly enough time. And I was mainly in one city, more to argue in that there was so much more to see. Yet, I’ve been around the world, Europe, the Middle and Far East, Central and South America, but nothing has affected me quite like this. A truly profound experience you might say.
It’s not a large island, but it’s a country with a storied past. Its beauty and riches are well documented by explorers and visitors throughout its captivating history. Its dangers have been equally chronicled via the days of pirates, mobsters and revolutionaries. It’s a place of contrasts and contradictions, with its people having all of this compressed into their souls.
I was awed by the mysterious influences of time and place on the people. I noticed this almost as soon as I arrived, especially with simultaneous and contradictory feelings being elicited; inspiration-deflation, caring-non-caring, right-wrong, beauty-beast, ahead-behind, all of these overwhelming my senses. It was like being in the space between the right thing to do and the right thing to think, between preach and practice, or social man and economic man – a gap where a God and even sin might find value. Again, it was a quick yet powerful sensation. In fact, I notice the feelings again in recall, with the notion of “tearing a smile” coming to mind. Perhaps in some unexpected, existential way, I stumbled upon a piece of myself or mankind in coming to this place.
But I couldn’t get lost in all of this, not on this particular visit. I had my sights set on a particular purpose. I was hoping to find out if what I thought about the place in terms of its ideological underpinnings would lend itself to further exploration. In other words, I knew of the politically difficult situation there, and I also heard of the socially romantic character. I was hoping to find that perhaps the twain might meet.
And it did; there was a convergence of what I hoped to see and feel with what actually transpired. I quickly felt that my purpose had some real ground, it was not just fanciful thinking. In fact, I was reminded to some extent of my own country, one also filled with contrasts and contradictions, buoyed by revolutionary spirit, a place where the entirety of its experiment seems to have somehow been lost in translation. My purpose involved wanting to know more about the similarities of our countries, and if the similarities could overcome our differences, could in fact be fuel for a better understanding. I am more certain now that perhaps they can.
Let me say more about this, about the elements surrounding my purpose. On initial examination, it was fair to reason that we were two countries laboring in the midst of our revolutionary beginnings, especially in the context of the post WWII world. In terms of the spirits of those revolutions, one has been couched within the frame of democracy, the other in communism. And by principle, neither of these frames ever seemed so at odds with the other. Both revolutions have also been enormously affected by the nature of capitalism, almost in the sense of being two sides to the capitalist coin. With one revolution, historical variables seem to have been on its side – there has been substantial political, economic and military growth, progress. This is while the other has struggled to maintain its identity, some argue as an effect of the other revolution’s success. In any event, as we speak, both sets of revolutionary principles seem distorted by the nature of market influences — it’s now hard to recognize the true intent of either revolutionary experiment. So we actually appear to share a great deal. My purpose was to sense the actuality of this, and again, I’m hopeful that this “similarity” can actually bring us together, each of us learning from the other relative to what has transpired in the modern world. Perhaps it’s finally the time when this can happen.
With this in mind, I would like to present a review of “the model” that I was considering prior to my trip. I actually took the idea around to community related agencies in the city I was visiting to ascertain what interest might be generated. Despite the often offered caveat about discussing politically focused endeavors in the country, I met with success. The “initial project” idea developed as discussions unfolded and it seems a perfect fit in terms of developing future projects.
In the reading of both, I expect you’ll get a better sense of what is being considered, and what I’m hoping to develop as I now speak with those in our own country. It could be – perhaps – that something of value may be in the offing.
The Model
During my initial trip, I intend to build on contacts in the academic/art/civic/governmental communities, garnering
an interest in the idea of developing a dialogue, and then returning in the near future, hopefully with a project in hand. In this context, I would like to develop an interest in what can be termed an ideological-educational model from which any number of projects can grow. In short, my professional and personal experiences (documented in my last book, “Criminal to Critic-Reflections Amid The American Experiment,” Rowman and Littlefield Publishers) tell me that we share some mutually important concerns pointed at our political, economic and social structures. This “mutuality” can be framed in the imagery of a large circular intersection, with a center from which several directions can be taken. In this center lay, among others things, the concerns of capitalism, socialism, communism, and democracy. No doubt, these concerns – and all their implications — have prompted a great deal of separation/conflict between the two countries over the past half century. Yet both countries must now legitimately and openly address these concerns in terms of proceeding in directions that can speak to better futures. Therefore, it is at this “crossroads” where projects might be best developed. This is underscored by the belief that in sharing information while we are both there, we will not only help address and repair our separation/differences, but, in taking the best informed directions, we can also move toward bettering our respective countries.
With these ideas at the model’s center, what is developed via dialogue and the sharing of literature, or art, or research, etc., can be expressive of/serve these educational ends. Although small in nature this type model, in the course of its development, will legitimately and clearly speak to the long-term interests of both our countries.
An Initial Project
I have completed my stay, and in terms of discussing the above “model”, it was clear that the ideas represent ones of interest. In this sense the following is proposed relative to actually initiating a “grass-roots” oriented bridge between our countries.
Forming a “work group” developed from the organizations I have contacted (importantly, organizations which have a link to both the government and the University) and from similar organizations that can be involved from my country, we can together develop a “symposium on dialogue.” At this juncture, here is a general idea on what this would be. With students from both countries involved from the beginning/developmental stages, we could bring together individuals from academia, politics, community work, arts, media, entertainment, etc. to discuss the ideological issues that have been at the forefront of our mutual concerns. From this, attention can be garnered on the issues and the intent of continuing corresponding dialogue, perhaps a documentary or music developed, and certainly some shared research projects between students/universities could begin. This should not be seen in the context of necessarily resolving all our differences, but more as an open dialogue to facilitate better future relationships. In short, and as those I talked with seem to agree, it’s about time this happens.
There are certainly both procedural and substantive issues that will need to be tended to, and funding will be an issue as well. But given the issues (and their immediacy), and that we have universities and organizations poised to help, and that this will not require a burdensome sum of money to organize (especially given the potential rewards), I would strongly urge that the discussions and contacts already initiated be utilized to their fullest extent. In this sense, I am hoping to further integrate those who can help move the ideas/interest/energy forward. Again, what is being proposed is based on the value of education — the sharing of ideas and thoughts with the next generations in mind. As both an educator and a participant with issues that relate to bettering international understanding, I’m confident that this is a viable and timely way to proceed.
___________________________
So I imagine you have the picture. One might scratch his head thinking that this seems so obvious a course of action, that this type bridge must already have been built. But this is not the case. And you can well imagine the worn-out, archaic reasons for this may be the same ones used to deflate the spirit from this initiative – the same spirit interestingly tied to both our country’s beginnings. Of course, we shall see.
There is certainly more I could say about my visit – especially about the people, their problems, the daily goings on and the country itself. Perhaps I can get to all of this another time, perhaps after my next visit. For now, I will only add this last piece of information. On my return flight, I was seated next to a woman from South Korea. She was fluent in English which allowed us the opportunity to chat about our experiences on the island. (This “spread” of our language certainly speaks to our post WWII expansion. It also speaks a bit to both our luck and our arrogance in terms of having other people speak in our native tongue.) She was a school teacher and she along with husband and two children (seated across from us) had been on holiday discovering and photographing the island. When it was my turn to explain my visit, I did so in the context of what you’ve read above. She seemed to take in the ideas I was expressing with a great deal of interest, and complimented me on what she perceived as some form of bravery. Shortly thereafter, and much to my surprise, she asked if she could have the piece of paper I was jotting some notes on. I gave it to her and she returned it with a sentence written on it. I found her consideration in wanting to write something surprising, and I remain inspired by the words she wrote. In closing, I thought I would pass them along to you.
“I hope you are healthy and happy and that you and your friends help light the world’s darkness.”
A rather profound way to end a profound trip – it seems the ideas must continue to be discussed. And perhaps some light will indeed follow … quizas.
_____________________________________
A Life in Cuba
As with circumstances in the U.S., there are many legal and extra-legal claims referencing injustices in Cuba. At the same time, and again similar to the U.S.’s revolutionary history, the Cuban experiment represents a great struggle to achieve objectives truly believed in and admired by many in the world. Herbert Zulu’s ink-penned poetry and design seem swirled somewhere in the mix of these conditions, perhaps making the black and white of his work appropriate. Zulu continues his life in Havana, struggling to make something out of his art and life. He wrote the following poems in English.
The Voyeur
The voyeur cracking his teeth
and all that you know what I mean
I am about to swear
he thinks of a frying pan the light is
to toast the woman’s titts for dinner
and that’s not neither fair nor right.
The Drummer
First one step, then another, then
the drummer runs away from the picture
of himself in the middle of a destructive night.
catching this image as it came from my memory,
Now, an image of downton in an old city?
The drummer is unreal and so the place where my imagination sees
these things. Ink and words even at midnight
make a seeming of a man, the imbecile, composing
a Southern breeze when rhythm cannot free it from desires.
First one step, then another , then
I reduce the player to my self, slow and naked,
and, acquiring each other’s thought, we are one.
My Niece Jennifer
Little by little my niece Jennifer hugs herself.
She does it hard and closes any entrance when being mad
at the shod feet passing by her side with its deafness
and too many words utters on behalf of silence.
Then she plays anger and she plays an ancient blues
that once we sang it never let us live.
All I need to do to feed her with a taseful ripe fruit pie or
can we talk it through right now or can I
help you hug yourself as a consolation?
She then tells me she gets made at what she sees.
No one has leter know how much we treasure her
how lovable and huggable she is
even when she hugs herself with down-headed anger
And I just look her in her eyes
so that she sees these words on mine
visualizing them neatly way out of her uncle’s tongue.
June 20, 2010 No Comments
Politics
By James Palombo
More food for thought…
In this month’s edition I want to reference several articles that appeared in the news over the past few weeks. Although each one stands on its own relative to the issues raised — some interesting things are going on these days — they are indeed interconnected, and also tied to concerns noted in my previous columns. The following piece then presents this interwoven review, hopefully demonstrating the practical significance of what was previously presented for your reading. I trust this will be of value in advancing thought on our ever changing American experiment, but as always, I’ll let you be the judge.
The first article, “The new mortgage revolution: walk away” by Alyssa Katz. (www.housingwatch.com/2010/01/25) succinctly captures the essence of the “strategic default” phenomenon. In general, this strategy suggests to those who owe more on their mortgage than their property is worth to simply pack-up and move on. As Ms. Katz points out throughout the piece, there are a variety of elements that have been offered in support of the idea: the actions of the big real-estate developers seem to reflect it, i.e., they do it all the time; real-estate agents feel this might re-invigorate a sluggish market with “short” re-sales; a number of interest groups propose that large scale defaults will be a revolution of sorts, justified in addressing a system that allowed the banks to screw the lender in the first place; that default, in such hard economic times, will not really effect what future borrowing may be like; and defaulting on the mortgage will actually free up money which can be spent on/put into the market for other items.
Ms. Katz’s also quotes Connecticut Realtor Minna Reid who said “I know many will consider strategic default wrong or immoral, but as for me, I stopped passing judgment long ago.” And this seems to mirror the sentiments of many who are involved with the process.
Being perfectly honest, I can appreciate how one could arrive at such a feeling — almost all the logic tied to it makes economic and self-interest sense. And in terms of any moral or ethical questions, or the idea that two wrongs really don’t make a right, well, in short, and especially given today’s moral climate, one could easily say, “give me a break.”
Yet, it just doesn’t seem right to leave it at that. In other words, there should be more to consider. For example, one might want to know to what extent the cynical, morally callous attitude displayed in terms of the “strategic default” strategy is reflective of the overall nature of the instincts developed in our society? And how did these “instincts” become so prevalent? I mean have we always just been this way? Or is this type behavior part of a larger phenomenon, one that is affecting the changing cultural instincts of our entire country? Is it in fact tied to the same instincts that fueled the financial crisis itself?
Clearly, if there is more to all of this than human nature, and there surely must be, then we must inquire as to what has been motivating such behavior — behavior that makes America appear at odds with its own democratically principled identity? I think you would agree that although the answer includes elements of our nature, it has to also include elements connected to the environment in which we live. And to this point relates one that I have stressed to some length in previous columns — that in order to understand things like “strategic default”, or the financial crisis, or all the other economic aspects that tip the scale of our perceived morality, we must consider the effects of living in our advanced system of capitalism. Without this, it is hard to understand that beyond pure human greed, there are things at work which may be pushing us to act in ways that seem inconsistent with the principles we want to lay claim to, principles that seem to be slipping away from us as we speak.
It is no secret that we’ve reached a form of economic rationalization, where it becomes more likely that when the dollar versus morality decisions come due, the scales of choice will tip more and more in favor of the dollar. How far this will go, well, who knows? As the articles previously presented imply, however, this appears to be a situation we seem to be looking away from rather than into. And certainly this doesn’t bode well for rectifying the serious problems at hand.
In speaking of the “dollar tipping the scales” theme, the next article references similar considerations relative to our “scale of justice.” In his piece, “No-dollars-barred campaigns” the Washington Post’s David Broder highlights the Supreme Court holding in Citizens United v. Federal Election Commission. In short the decision provides corporations the opportunity to spend unlimited resources on election campaigns. For the most part (legal decisions are never easy to relay to “lay public”), Broder expressed the inherent worry related to this decision — that it could well result in an even more money/profit tilted process than we currently see in action. In this sense, he offers the dissenting opinion of Justice John Paul Stevens who along with three of his colleagues objected to the decision, saying that it confronts “the common sense of the American people, who have recognized a need to prevent corporations from undermining self-government since the founding, and who have fought against the distinctive corrupting potential of corporate engineering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense.”
I certainly have no objection to Mr. Broder’s approach, or to the dissenting opinion offered by the Court — that unfettered capitalism does not work well at any level, particularly in relation to the political principles tied to the nature of democracy, and it does certainly seem like a “strange time” to take this course of action. (Could there ever be such a time?)
But in order to fully grasp the nature of this decision, wouldn’t it seem necessary that the reader/the public have adequate knowledge of the political and economic principles tied to this decision? In this sense, wouldn’t having information as to the Conservative/Republican nature of this decision, as well as how such a Conservative/Republican dominated court came to be, be important? And shouldn’t the public also have adequate knowledge of how things might be different in regards to a Liberal/Democrat decision, and what a “stacked” Liberal/Democrat Court might result in? Moreover, shouldn’t the public also have an adequate understanding of how both these political parties, as well as the governmental processes themselves (including the judicial, executive, and legislative branches) are affected by the nature of the capitalist/profit driven system in which we live? In other words, regardless of what political party is in power, can we ever attach to the principles related to democracy and self-government as long as the capitalist system goes on without real notice and/or understanding and/or altering?
Once again, and like with idea of “strategic default” these type questions as well as their answers would seem to be required ingredients in making any informed rationalization as to what has been happening relative to such significant considerations. And I think that as you listen, read and watch what is going on, you would have to agree, no? (As a little side note, how would it be to see corporate logos worn by those in government? One can imagine the result, although it would seem that corporations wouldn’t really want to overtly place their tags/identity on the foolishness that would ensue — things may well be better just as they are.)
The last article of note “Google negotiating ways to keep its presence in China” was syndicated by the Associate Press. In essence, the article references the struggle involved as Google’s interest in the enormous potential of the Chinese market, i.e., profit, meets with interpretations of the Chinese government in terms of the “free-flow” of information, i.e., principle. In other words (and like with issues pertinent to human rights interpretations and profit), what should a corporation do? After all, any political censorship should not be tolerated in relationship to the principle of free-speech – isn’t that what we Americans stand for? Yet, the market is just so immense, and, well, isn’t that what we stand for?
There is no doubt that Google will reach some form of compromise, which will most likely be formed in the context of it being mutually beneficial to both countries. However, the situation itself is indicative of not only the ongoing struggle of principle versus the dollar, and the cultural instincts developed within the context of a corporate/market milieu, but also with the issues that were raised in the November column regarding my experience at the G-20 in Pittsburgh PA, particularly the reference to what was described as the on-going struggle between western and eastern capitalism.
In other words, one can see that what is developing with the “Google and China story” speaks to this contest of western versus eastern interpretations of economic, political and social policy. Moreover, it demonstrates the power of China to strongly influence and even dictate policy in terms of its burgeoning producer and consumer market, as well as its nexus to other developing countries. This is so irrespective of technology innovations or anything else that western corporations bring to the table.
With all this being said, the fact remains that to understand today’s international strategies and policy decisions, an understanding of the process of capitalism is a must. And in recognition that the world is clearly at our doorstep, we must ask if we are doing enough to actually make this happen.
* * *
I think it’s clear that most of what is happening in and around the American experiment demands particular attention to how we manage our political, economic and social selves. And it only makes practical sense to include our ties to the nature of capitalism. To this end, I would encourage you to ask your favorite columnist about his/her thoughts on the matter. I imagine you would like to know what they might say, and I would certainly be interested in their response as well.
April 21, 2010 No Comments
Politics
Jim Palombo, Editor
Food for thought from our readers
In the previous articles I’ve written for Ragazine, I’ve focused primarily on the concept of capitalism. Via reports on the G-20, I documented its significance in terms of understanding what is happening with the rest of the world, and in particular with China. It has become quite clear that as the rest of the world struggles with the tenets of capitalism, we should at least have a grasp of what that struggle entails. In another article, I reviewed further why I think we should come to a better understanding of how capitalism works, in particular its effect on our own political and social processes. In this sense, a discussion was presented noting the dangers tied to our citizenry’s lack of having an “informed consent,” and a course of action that might alleviate this problematic situation.
The approach frequently evokes negative feedback. Almost to the letter, this feedback suggests I must be some type of socialist or communist to be presenting material prompting discussion on America as a capitalist country. It seems a good number of people find this type of dialogue, which is not the more typical one attached to democracy, offensive.
Actually, I find this criticism more supportive of my “we need to better understand capitalist America” position than not. This is so in that the bulk of our public quickly admits to the economically driven elements tied to their daily lives, (consider work/jobs (or lack thereof), tv, media, family situations, politics, etc.), but find a discussion tied to analyzing this fact alien. In other words, they feel/sense/see what is going on, but they not been encouraged to discuss why it’s so – a curious and dangerous situation, indeed. Moreover, asking that we come to understand the nature of capitalism – again a major piece of our own complex puzzle – really has nothing to do with being a communist or socialist. It references nothing more than a person interested in having a better educated and more informed America society.
This being said, what follows are two pieces I received in support of what I’ve been writing. The first is from a gentleman named Peter Wilcox, whose current home is in Scottsdale, Arizona. He is a world-traveled businessman who has come to feel that America may be losing its soul. The second is from a retired engineer, Fredric Fitzgerald, who maintains the hope that through well designed and serious dialogue, we can revitalize our American experiment.
I trust you will find both pieces of interest. In addition, I hope their reading will encourage you to submit your own thoughts that speak to a better understanding of the serious problems we face.
Re-Visiting the “Gilded Age” – Peter Wilcox
Having traveled the world extensively, I’ve had the opportunity to discuss our country’s rising inequality and distribution of income with many foreigners. And they often express dismay over how apathetic Americans are toward this obvious growth in disparity regarding the incomes and lifestyles of the rich and poor.
Over the past fifty years, there have been a variety of statistical analyses that point to the very small percentage of people who control the overall wealth of our nation. This is not just relative to income, but to the total assets accrued year in and year out. This of course does not bode well for a society’s welfare, especially when that society purports to be one focused on equality.
Foreigners see this and respond that surely a country with such a skewed income distribution cannot be better than a country where there is more parity. So why don’t Americans feel more alarm?
A big part of the reason is that Americans don’t know what is going on. They are misinformed, rely more on opinion, are too self absorbed, or simply have become immune to caring about what they think they can’t control. At the same time, our culture seems to cling to core beliefs and attitudes about a future that will always be better, in spite of what we see and feel happening to the contrary.
It appears that instead of moving forward, instead of taking stock of who we are and what we do, we again seem to be in an era of robber barons and corrupt political, banking and social processes. And the inequalities we see, well, these may well have become as American as apple pie along the way. It’s a shame, no doubt. But in the end, we will really have only ourselves to blame.
Improving Our System — Fredric Fitzgerald
Our system of democracy and capitalism has allowed some problems to develop. Fortunately, it has levers for making corrections, so let’s hope they get used. Here are some considerations I’ve gathered from a variety of readings and resources. (Not necessarily in order of significance.)
- Stop promotion of the idea that “growth is good” and adapt to climate change: Current exponential growths of human population, pollution, and the usage of natural resources are not sustainable. The earth cannot support an unlimited number of people, it has a finite capacity to absorb pollution, and its non-renewable resources will run out. We also need to recognize and work at the significance of the altering climate change in the world.
- Concentrate on Water and Food Issues: Allow for the increased price of fresh water only to pay for the trillions of dollars need for infrastructure and conservation purposes; establish world-wide food growing and distribution strategies. We must focus on these areas, as shortages, which already exist in some areas, cannot be allowed to continue to develop.
- Implement policies that the poor see as just and implement universal health care: Work at the continually growing gap between the rich and the poor. Progressive taxation will provide funds to support the disadvantaged, as this is part of a fair and equal society. These funds must be limited to work/education incentives and community investments. Progressive taxing will also discourage the accumulation of huge family fortunes unearned by succeeding generations. And health care coverage must be extended to all, especially given our interests in a free, fair and equal America.
- Require corporations to contribute 50% of their local profits to the local poor: Equal partnerships must be formed both here and abroad, and corrupt/imperialistic type bribes of leaders must stop
- Acknowledge our addiction to oil and its impact on our relations with the Middle East: Currently, we cannot get along without oil and we need to be honest about our policies and adjust them accordingly.
- Drop our role as “world cop,” shrink our “military-industrial complex” and shift our emphasis away from a war on Islamic terrorism: There are too many areas we should not/cannot be militarily involved with, so we need to better embrace our diplomacy, and not necessarily through only trade. We must not be reluctant to talk to adversaries without preconditions. We should cut back on the development and stockpiling of all weapons, which only stimulates reaction to the notion of our imperialism. And educating our people to differences and difficulties with others is the most prosperous way to avoid conflict.
- Educate the public to understand the nature of capitalism: Capitalism has a flaw in that it promotes human greed, materialism and competitive conflict. We need to develop an educational process, perhaps a series of courses, that will fully inform us all on what a capitalistic system is, and what restraints we can apply to help it work more for our benefit.
- Restrain the anti-democracy efforts of big business and financial organizations that benefit only the profits of the shareholders; shift our emphasis from bailing out Wall Street to providing work/jobs; limit executive salaries to a peak of 25 times the average worker: We cannot tolerate the expanse of business at the expense of our public welfare. In this sense we must seriously consider all possibilities of curbing the corporate appetite while making our system more equitably balanced. One area that needs to be immediately addressed is the limitation of campaign and lobbying funds which have served to skew our pursuit of common interest government.
- Stop the degradation of the social connections necessary for democracy to flourish: It must become a mandate to alter the course of our seemingly undereducated and complacent society, a very dangerous situation. This can be addressed by encouraging things like; a. better civic education, b. meaningful community service, c. networks that bridge racial, social, religious and geographic differences, d. integrating pedestrian friendly living and working areas, e. citizen discussions and debates, f. art and cultural activities.
- Challenge the reigning ideological system and, using all our technological and social abilities, seek to create constructive alternatives of thought and action with both our public and within our institutions: There are many issues confronting us which will require examining alternative methods of government as well as economic, political and social planning. We cannot eliminate consideration of these methods simply based on ideological differences, nor on profit motive, nor on merely public opinion, nor on the need to obtain a vote. This may take a “new will,” but we have demonstrated in the past that this is not something we cannot generate.
As you have read, both articles contain some definite “food for thought.” Mr. Wilcox has captured an image that most Americans sense – we seem to be at odds with our own ideals. Mr. Fitzgerald has pointed out some specific areas of concern – there is plenty of work to do and serious times ahead. In putting these two pieces together, it makes sense that we must be willing to make some significant changes to alter what we see happening around us. Said another way – we cannot continue to do “business as usual.” Unfortunately, even following the great hope tied to President Obama’s election, we don’t seem to be doing what we need to do. And I’ll add that harkening back to an earlier day – as his opposition often does – in the sense that life was simple and ideals were clear and close at hand, is not the answer. Aside from the fact that these “simple and clear” days never really existed, especially for those living them, we cannot exist in the past while trying to deal with the present and the future. Although history is important, things have changed, our cultural instincts from generation to generation have changed, technology has changed, world power has changed – it’s not a world to be lost in the past.
So, the hope is that we get to consider all these things (and more) as time move on – that we continue to challenge ourselves in the way that we must. It’s a mandate we cannot ignore. In this context, I hope you won’t hesitate to send in your comments or an article for consideration – offering your own “food for thought,” if you will. In the meantime, and until next edition’s piece, be safe, keep thinking and stay involved.
February 20, 2010 No Comments
Jim Palombo
On Considering Capitalism…
In my last report “The G-20 in Retrospect,” I discussed to some degree the development of what can be considered “eastern capitalism”, with China as its champion, as compared to “western capitalism” with the United States at its helm. In ensuing discussions with people who read the article, questions surfaced as to what capitalism actually is, and how one system could be so markedly different from another. Obviously these were fair questions, and neither is easy to answer in brief discourse. As I stated to the questioners, clear and concise responses may well require, at a minimum, a semester’s worth of discussion.
In the nature of the questions however, there is contained a very significant point which does not take as long a time to relay. It is a point in fact that I’ve been referencing for most of my professional career – some thirty years – in both academic and social service work. In short, our public is woefully ill-equipped in terms of understanding the nature of capitalism. Additionally, we are woefully ill-equipped in terms of understanding our political and economic history relative to the notion of capitalism, especially as it was commingled with the advent of democracy. And, we are also sadly in arrears in terms of understanding the basic tenets of both liberal and conservative political platforms and their respective ties to both democracy and capitalism. (Just think of your own education in terms of garnering an understanding of political and economic America.)
In consideration of my position, I am offering two pieces. The first, “Informed Consent,” is a commentary on the nature of the “not understanding capitalism” problem. The second, I’ve termed “In continuance…” and it references points from the conclusion of my most recent book, Criminal to Critic-Reflections Amid The American Experiment. (Rowman and Littlefield Publishers). Together, I hope these will serve to highlight a very serious situation, as well as what might be done to address it. With this in mind, please read on, and as always feel free to offer your own thoughts accordingly.
Informed Consent
(This piece was written in light of the “new hope” tied to the objectives of the Obama administration, and before the current economic crisis.)
In this morning’s paper I again read a piece referencing Barak Obama as a socialist. As I often do, I shook my head in dismay. This is not because I necessarily agree that he is or isn’t. Rather, it is because I know that most Americans have little understanding of what this actually means. This realization comes after twenty plus years in the post-secondary arena, addressing countless students at both undergraduate and graduate levels, and after hundreds of discussions with both public officials and private citizens. Said another way, it has become very clear that when it comes to understanding the principles tied to the concepts of socialism, communism, democracy and especially capitalism (after all, this is our American system) we are in a civic information/education depression. In fact, amid our economic and war concerns, this depression may indeed be our most drastic problem.
If one begins to consider this “non-understanding” situation it is not hard to imagine rather disturbing results. Simply put, in confronting both our national and international concerns, we cannot have a legitimate grasp of our current concerns nor our future options – we are to a great extent “in the dark.”
In terms of our national concerns like unemployment, the housing crisis, income disparities, crime, taxation and government regulation, if our citizenry is unable to measure these problems against a legitimate frame of analysis, then little could be expected in terms of addressing them. Relative to our international concerns, imagine trying to comprehend and/or compare what those in Europe, the Middle East or China are doing if we don’t understand the political and economic structures under which they live. And how can it be possible for us to examine and justify our foreign and military strategies without this understanding? (Consider that this gap in understanding can also lead to all types of political chicanery – where politicians simply pander to public emotions, create half-truths and lies, and do or say anything to attract a vote. Certainly, the sense of this happening would simply make trusting our political processes and our government and the import of the vote all that more difficult.)
There may be a solution, a way “into the light” if you will. Given that the educational system has most of our population captured for a good number of years, it could be in that arena where we can develop a more comprehensive framework from which people can better understand and discuss political and economic America. We’ve done this with technological skills; why not with citizenship skills? All we need is some help to make this happen.
Thomas Jefferson, in addressing the mandates of government, once said: “… Educate and inform the whole mass of people. Enable them to see that it is in their interest to preserve peace and order, and they will preserve them. They are the only sure reliance for the preservation of our liberty.” It’s a tall order indeed — asking those in government to act on behalf of the people, not for the party, nor for the profit. But given our current state of affairs, it’s something we cannot avoid undertaking. So let’s try and hold our leadership to the possibility.
In continuance…
As an example of how this might work, consider this. In elementary schools, children could be introduced to concepts developed by educators that better equip youngsters to think about issues of freedom and equality. This would be done (and is being done in some select areas) in the context of helping young people understand who they are and how they might relate to other people. As these youngsters passed on to their higher grades, they could then be engaged in discussions related to liberal and conservative politics and the concerns of democracy and capitalism.
The idea would be that as they developed a dialogue pointed in this direction – understanding social, political and economic America – individuals completing secondary school would have a more solid sense of what we can do in the country and who might be legitimate candidates come voting time.
We could then continue this focused dialogue as individuals proceeded on to post-secondary processes. It seems it would not be difficult to implement mandated courses, perhaps a one credit course at the beginning of every year of college, where students integrated social, political and economic issues with the idea of fueling (or re-fueling) an ongoing and continually developing dialogue related to American citizenship.
We could also develop a similar process for the general community, holding adult classes and/or seminars for the same purposes, perhaps several times in the year, allowing for paid time to be taken from work to attend. (Some corporate responsibility perhaps?)
In toto, these processes would help develop dialogue between parents and children, students and non-students, over national concerns, helping everyone to learn together.
Finally, we could draw on those in the political and economic arenas who, even with their other interests, recognize the importance of an informed public. These individuals would have little trouble acknowledging the tremendous social energy it has taken to survive this far, and they should be willing to help with the efforts needed to carry this energy into the future. And in helping to create a new dialogue, these individuals will even have the chance to demonstrate a new form of leadership, a form hard to attach to in the country today.
In closing, consider that we have sent people to the moon and beyond, something only several generations ago seemed as far from possible as reaching the stars themselves. We have seen other tremendous advancements in technology which continue to take us beyond our imaginations. In this light, its seems hard to believe that we cannot figure out ways to come to a better understanding of America, that we cannot create a dialogue about who we are and where we are going. Rather than being seen as too difficult or impossible, this should be, in the interests of our national and international selves, our most important mandate.
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Just to note – Given what is said above, and in keeping with the notion of being actively involved with ideas, I have been attempting to organize a “symposium on capitalism.” In brief, this would be a non-partisan, two or three day conference with individuals invited from academia, social service, government, business, media, entertainment and the general public. The focus would be to: call attention to the concept of capitalism; create some viable plans to better educate the public – including developing research projects across disciplines and universities to study related issues; have a few commentaries or songs written and/or perhaps a film done relative to what this all may mean. In this context, I have reached out to many famous and not-so-famous people for assistance. And although nothing as yet has materialized, the networking continues. Certainly, if you find the idea of merit, feel free to join in with the effort.
December 16, 2009 No Comments
Jim Palombo
G-20 in Retrospect
In the last edition of ragazine.cc, I provided some comment in anticipation of traveling to Pittsburgh, Pennsylvania, for the G-20 summit. Having participated in the proceedings, in both summit and demonstration venues, here’s my follow-up. As always, feel free to comment or add your insights accordingly.
The scale of the G-20 mandate
Clearly, building a sustainable global recovery amid the financial crisis that has both stunned the world and stunted its processes, seems a daunting and enormous undertaking. In fact, whether or not this could actually happen, particularly with any sense of urgency, and especially given the historical, political, social and religious differences among the countries represented at the G-20, seems open to question. After all, given the differences, particularly as they are intricately tied to the essence of economically motivated interests, well, it’s not hard to imagine the chore at hand.
In any event, the mandate of the G-20 has been directed at precisely this effort. Importantly, the major theme that has been integrated into the process is that business can no longer continue in its current form. Said another way, “business as usual” cannot coexist with the change needed in how the economic/financial/market systems are being run. What exactly “changing the system” means, and to what extent it’s possible in terms of regulation, de-regulation, and/or system “policing,” seems to remain in the balance of the G-20 considerations.
As a follow-up to the earlier Summit in London, what happened in Pittsburgh centered primarily around these issues: restructuring global financial institutions; preserving, restoring and protecting trade investments; securing food and agricultural growth; protecting the climate and the environment; and reinforcing the prosperity and health of the citizens of both developed and developing countries. Of course, this meant that the details, data and designs relative to each issue were expected to be sorted through, with some consensus among the countries – again, amid all the ‘differences’ referenced above – expected. It also meant that these negotiations would be happening under the growing threat of terrorism and war, two concerns underscored by the discovery of an Iranian nuclear plant the second day of the Summit.
Although much could be said pertinent to the vast amount of economic variables tied to the G-20 proceedings, and/or on what each country must do to bring about global financial change, and/or on the intricacies of organizations like the World Bank, the International Monetary Fund, The World Trade Organization, The Financial Stability Board or the International Finance Corporation, I will leave this to others, those with perhaps more expertise. Instead, what I would like to reference is more in tune with what stood out to me as I moved about the Summit, talking with people and listening to the briefings and interviews that were happening throughout the two days of the meeting. I would suggest that you can certainly follow-up on the wide variety of elements tied to the Summit should you so desire, particularly given the amount of material that is being produced from it. Along these lines, the closing speech of the Summit printed ‘on-line’ is a start. It certainly provides more on the expanse of variables set upon the international community’s table.
Observations amid the G-20
I
On the logistical and organizational aspects of the Summit: Aside from the enormity of the mandate of the G-20, these were the first things that struck me. I’m not sure that any of it could have been done another way, but it seemed the cost and resources attached to bringing in the delegates, making the huge David Lawrence center operational for media, G-20 participants and the security personnel (there was a large number of security people inside the facility, intermingled with the 2000 media individuals and G-20 participants), and securing the city with some 4,000 police and military personnel had to be enormous. Placed up against the global financial crisis itself, it wasn’t hard to understand the criticism that the Summit seemed symbolic of how resources, certainly needed elsewhere, can be wasted. The staging of the entire event also did little to support the aforementioned theme that the G-20 would not be about “business as usual.”
II
On security: The armed police and military personnel, both in full battle gear, stationed at various checkpoints throughout the city roads and bridges or often passing in the streets in small bands of ten or twenty, the police boats in the river waters, the barricades, the wire and fencing, and the closing down of many of the streets, made the city look like a military zone. It reminded me of a smaller version of Zagreb where I had been during the early ‘90s, amid the Bosnian conflict. Many of the residents from Pittsburgh whom I chatted with felt this whole process was too much, and it served more to close off their city to visitors than anything else – not a good thing for Pittsburgh overall. Again, I’m not sure of the alternative, nor were those I spoke with, particularly given the potential for serious problems. Nonetheless, it was a bit eerie in the street.
III
On the demonstrators/protesters/opposition: Obviously, as had been made clear at every “G” event across the world, the opposition represents an important part of the proceedings. The argument that what is raised by the opposition is as important in the G-20 proceedings as anything else certainly has some credence. In this sense, I suggested the idea that it would behoove those who organize the Summit to invite delegates from the demonstration/protest/opposition side to the proceedings. This would serve to get that side involved in a participatory process, help diffuse their sense of alienation, and allow for G-20 participants to interact with them. I’m not sure of the idea’s future, but it did draw a few encouraging nods. In any event, as someone concerned with all aspects of the G-20 (and the problems in the world), I did my best to stay informed on the agenda of the G-20 opposition.
I attended several meetings sponsored by the Thomas Merton Center, which helped framed the objections and assisted with the organizing of the various demonstrations and the march on the most significant day of the Summit. I participated in the march, albeit only for a short part of the walk. There were not a large number of people in the march, about on scale with Pittsburgh, and it was well-organized, peaceful and meaningful. It is interesting to note that although most of the people had been at the issues for years and/or decades, they had varying views on the G-20 itself. The views seemed to hinge on interpretations of capitalism: whether capitalism needed to be completely done away with, or altered to a form where its application would be more socially acceptable.
For many then, their opposition was pointed at the problems they felt were part of the main G-20 players’ own doing. In other words, the problems connected to war, poverty, unemployment, poor health care, and the environment remain tied to the same capitalist processes that the G-20 players actually support. For these protesters then, the G-20 was a sham, representing nothing more than “business as usual.” It could not speak to the issues in ways that would really satisfy the problems, as the G-20 members were more a part of the problem, rather than the solution.
For others, however, the G-20 itself was a valuable concept. Bringing decision makers from all over the world together over the economic crisis was of significant import. However, for these protesters, the countries participating needed to focus more on the social problems existent in the world, over and above stimulating economies for economic growth. In other words, their protest seemed directed at altering the current mode of capitalism with more with more significant emphasis on social concerns than the G-20 seemed to be giving.
For others, there was also a concern that the social problems were not be adequately prioritized, but this was tied to the fact that the G-20 was leaving out the less developed countries in their proceedings. For them, both developed and undeveloped countries needed to be involved in the proceedings, and the lack of this happening represented the lack of concern for the depth of the social problems at hand. In this sense, pushing for the inclusion of the undeveloped countries would in turn bring about more concern for the social ills plaguing many of the world’s economies. (I spoke with two of these “include more countries and more issues protestors” who were inside the G-20. They were from London and seemed to take on a more professional approach both with their attire and demeanor than the protestors in the street. One of them said that their network of protesting in Europe was more sophisticated than what had been organized in Pittsburgh, and they thought their points at this venue could be better tended to by handing out flyers within the G-20 and talking with people. I’m not sure to what extent they were effective, or whether I personally liked them, but their presence did lend support to the idea of officially including the “opposition” in the G-20 proceedings.)
In sum, much of what I saw and heard reminded me of the issues and actions tied to the civil rights movement in the ‘60s, and the callings of people like Gandhi and Martin Luther King Jr. From the concerns of violence and non-violence, to the logistical planning, to the difficulty of getting permits to organize the demonstrations, to the energy over the issues themselves, it was inspiring to see the tradition of protest remaining active and worthwhile. As conditions in the world demonstrate, the struggle between our economic and social mandates continues, and there is more than enough room for improvement. Clearly there needs to be as many voices heard as possible in untangling what our collective future holds.
IV
On the content of discussion, briefings and conversations: “Capital, capital, capital” was how one French diplomat put it as I listened to his interview with Reuters news. And that seemed to sum up much of what the G-20 was about. Debates on whether to continue with stimulation, how much would be enough, who should control the flow, who should get what and under what conditions, and when to exit from that type strategy, dominated the discussions. Like that same Frenchman said, “the devil is in the details.” And of course, this pointed to the intricate work involved at the G-20 proceedings.
The Frenchman’s statement was applicable to another theme I found not quite missing, but not highlighted as much as its significance would merit. In short, the devil of the proceedings existed not really, or not only, in the details, but also at a more macro level concern – the ideological struggle that seemed to hang over the entire G-20 process. It is a struggle that could be referenced as a contest between established western capitalism, a system dominated by U.S. interests, and eastern capitalism, one being developed with China at its center. Importantly, the existence of such a struggle makes compromise and/or agreement within the G-20 proceedings appear on shaky ground. (I could only surmise that this is why, at least for public consumption, so little consideration was given to this point.)
In essence, it is fair to ask to what extent China, with the most rapidly growing power in the world, will immerse itself in the “fixing” of the western, predominantly American version of capitalism, over promoting its own model. As western capitalism is at the center of the economic problems in the world, and with the U.S., its core player, mired in Middle East conflict, it is not difficult to understand the nature of this query. Add to this that China has its eye focused on developing countries, particularly those in Africa, which represent vast numbers of producers and consumers in addition to their own Chinese population. (Consider the Russian and Indian populations in this mix as well.) Again, would they prefer to rely on a model that is in serious jeopardy or promote one consistent with their own interests? (Another intriguing question could be to which wagon, the West or East, might the European Union, which also has its agenda, ultimately tie its horses?)
My conversations, particularly with several of the Chinese delegates, and ‘listenings,’ including the briefings of British Prime Minister Gordon Brown and French President Nicolas Sarkozy, did little to dispel the notion that China will do whatever is best for China. Moreover, in the speech of Chinese President H.E. Hu Jintao, it was clear that this is China’s mandate. In addition, Jintao stressed that China considers itself more a developing country than a developed one, particularly since it has been only since the 1970’s that China has shaken off ties to the Russian model it adhered to for several decades.
It is important to note that this “developing more than developed” line of reasoning opens China’s strategies to those countries generally outside of the G-20. In fact, China has lobbied the G-20 for more countries to be included in the process. In this sense, it is not hard to imagine that China will continue to make investment efforts in the west, but more as a hedge to buttress its own developments in other parts of the world. (As an example of both their ‘hedging’, as well as their range of power, take into consideration their large investment in America’s Treasury bills.)
In sum, it is not difficult to argue that China, along with other countries that will benefit accordingly, is tying its hopes for the prosperity of the world to a new model of capitalism, with more of a socialist/communist/populist/Confucian oriented base than has ever been seen. It is a model actually foreign to U.S. political and economic interests, and, moreover, it may be beyond our cultural abilities to understand its properties. In the end of course, this situation serves to pit one system against the other, underscoring the concern of actual long-term, G-20 accord.
The Chinese delegates I spoke with stressed that China has no real interest in “universalizing” its model, it is more interested in taking care of the needs of China. In that light, I posed the idea that as China moves in the direction of assisting the less developed countries of the world, it will, by logic of the producers and consumers involved, spread its version of capitalism (not necessarily by force or war mind you), while at the same time taking care of itself. This was in fact similar to the course followed by post World War II America, to some degree of success.
My Chinese discussion-mates found this proposition most interesting. They did respond that I might be applying too much western logic in my image, that it implied a capitalistic, expansionist manipulation not really consistent with Chinese character and sentiment. As a rejoinder, I noted that current business dealings with the Chinese might indicate otherwise, many see the Chinese business person as ruthless in character. Moreover, I stressed that, given my American heritage, my notions are centered on cultural instincts developed in the most advanced capitalist system in the world, and that they should not be easily dismissed by others moving more toward capitalism. After all, Americans had the call of democracy in their hearts at the country’s inception. Yet, given the situation in today’s world, this is often hard to recall. With these points in mind, they found my ‘expansionist’ proposition more worthy of consideration.
It was important to emphasize that none of my questioning or proposing was directed at the value of what China may do. In other words, what might be developed by China should not be considered in a negative light. The logic of their policies and their concern for developing a more socially sophisticated model than what the west has produced might be a positive – the world may be a better place for what ensues. Even in light of the human rights and environmental concerns in China this might eventually be the case. (The Chinese, particularly in the context of their being a “developing country,” like to remind Americans of their own struggle with these issues throughout the 20th century.) But one could imagine that for many in the U.S., this would not be the feeling. They may see any move toward another way of doing business as an assault on America’s political and economic domain, a threat to our existing power. And this again frames a major concern relative to the success of the overall G-20 proceedings. (As an addendum to this concern, consider the international currency-modification discussions engaged in by countries like China, Russia and Brazil, as well as the advance of an Islamic financial model as an alternative to what is currently in use. The context of these considerations, with the devaluing of the predominantly American dollar exchange in sight, also points to issues centered on the balance of power in the world. This too has a significant bearing on the nature of G-20 outcomes.)
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AT END: For the most part, this is what I took away from the G-20. It was interesting and informative on every level, and as you can tell, the West versus East notion seemed most intriguing to me. I would offer that all of us, across all countries and populations, need to know more about each other. No one can argue that a better grasp of how the world works is essential for our collective future. Let’s hope we never lose sight of this, and that we continue to grow accordingly.
Jim Palombo can be contacted at ragazine.politics@gmail.com
October 17, 2009 No Comments
G-20 Leaders’ Statement
Preparations for the G-20 Pittsburgh Summit began right after the London Summit ended in April. Here is the full transcript of the Leader’s Statement as it was presented September 24-25, 2009. ragazine.cc politics editor Jim Palombo attended the summit and will be filing a report shortly. Come back to see for his impressions of what got done, what didn’t, and whether or not the delegates’ actions met expectations.
Leaders’ Statement: The Pittsburgh Summit
PREAMBLE
1. We meet in the midst of a critical transition from crisis to recovery to turn the page on an era of irresponsibility and to adopt a set of policies, regulations and reforms to meet the needs of the 21st century global economy.
2. When we last gathered in April, we confronted the greatest challenge to the world economy in our generation.
3. Global output was contracting at pace not seen since the 1930s. Trade was plummeting. Jobs were disappearing rapidly. Our people worried that the world was on the edge of a depression.
4. At that time, our countries agreed to do everything necessary to ensure recovery, to repair our financial systems and to maintain the global flow of capital.
5. It worked.
6. Our forceful response helped stop the dangerous, sharp decline in global activity and stabilize financial markets. Industrial output is now rising in nearly all our economies. International trade is starting to recover. Our financial institutions are raising needed capital, financial markets are showing a willingness to invest and lend, and confidence has improved.
7. Today, we reviewed the progress we have made since the London Summit in April. Our national commitments to restore growth resulted in the largest and most coordinated fiscal and monetary stimulus ever undertaken. We acted together to increase dramatically the resources necessary to stop the crisis from spreading around the world. We took steps to fix the broken regulatory system and started to implement sweeping reforms to reduce the risk that financial excesses will again destabilize the global economy.
8. A sense of normalcy should not lead to complacency.
9. The process of recovery and repair remains incomplete. In many countries, unemployment remains unacceptably high. The conditions for a recovery of private demand are not yet fully in place. We cannot rest until the global economy is restored to full health, and hard-working families the world over can find decent jobs.
10. We pledge today to sustain our strong policy response until a durable recovery is secured. We will act to ensure that when growth returns, jobs do too. We will avoid any premature withdrawal of stimulus. At the same time, we will prepare our exit strategies and, when the time is right, withdraw our extraordinary policy support in a cooperative and coordinated way, maintaining our commitment to fiscal responsibility.
11. Even as the work of recovery continues, we pledge to adopt the policies needed to lay the foundation for strong, sustained and balanced growth in the 21st century. We recognize that we have to act forcefully to overcome the legacy of the recent, severe global economic crisis and to help people cope with the consequences of this crisis. We want growth without cycles of boom and bust and markets that foster responsibility not recklessness.
12. Today we agreed:
13. To launch a framework that lays out the policies and the way we act together to generate strong, sustainable and balanced global growth. We need a durable recovery that creates the good jobs our people need.
14. We need to shift from public to private sources of demand, establish a pattern of growth across countries that is more sustainable and balanced, and reduce development imbalances. We pledge to avoid destabilizing booms and busts in asset and credit prices and adopt macroeconomic policies, consistent with price stability, that promote adequate and balanced global demand. We will also make decisive progress on structural reforms that foster private demand and strengthen long-run growth potential.
15. Our Framework for Strong, Sustainable and Balanced Growth is a compact that commits us to work together to assess how our policies fit together, to evaluate whether they are collectively consistent with more sustainable and balanced growth, and to act as necessary to meet our common objectives.
16. To make sure our regulatory system for banks and other financial firms reins in the excesses that led to the crisis. Where reckless behavior and a lack of responsibility led to crisis, we will not allow a return to banking as usual.
17. We committed to act together to raise capital standards, to implement strong international compensation standards aimed at ending practices that lead to excessive risk-taking, to improve the over-the-counter derivatives market and to create more powerful tools to hold large global firms to account for the risks they take. Standards for large global financial firms should be commensurate with the cost of their failure. For all these reforms, we have set for ourselves strict and precise timetables.
18. To reform the global architecture to meet the needs of the 21st century. After this crisis, critical players need to be at the table and fully vested in our institutions to allow us to cooperate to lay the foundation for strong, sustainable and balanced growth.
19. We designated the G-20 to be the premier forum for our international economic cooperation. We established the Financial Stability Board (FSB) to include major emerging economies and welcome its efforts to coordinate and monitor progress in strengthening financial regulation.
20. We are committed to a shift in International Monetary Fund (IMF) quota share to dynamic emerging markets and developing countries of at least 5% from over-represented countries to under-represented countries using the current quota formula as the basis to work from. Today we have delivered on our promise to contribute over $500 billion to a renewed and expanded IMF New Arrangements to Borrow (NAB).
21. We stressed the importance of adopting a dynamic formula at the World Bank which primarily reflects countries’ evolving economic weight and the World Bank’s development mission, and that generates an increase of at least 3% of voting power for developing and transition countries, to the benefit of under-represented countries. While recognizing that over-represented countries will make a contribution, it will be important to protect the voting power of the smallest poor countries. We called on the World Bank to play a leading role in responding to problems whose nature requires globally coordinated action, such as climate change and food security, and agreed that the World Bank and the regional development banks should have sufficient resources to address these challenges and fulfill their mandates.
22. To take new steps to increase access to food, fuel and finance among the world’s poorest while clamping down on illicit outflows. Steps to reduce the development gap can be a potent driver of global growth.
23. Over four billion people remain undereducated, ill-equipped with capital and technology, and insufficiently integrated into the global economy. We need to work together to make the policy and institutional changes needed to accelerate the convergence of living standards and productivity in developing and emerging economies to the levels of the advanced economies. To start, we call on the World Bank to develop a new trust fund to support the new Food Security Initiative for low-income countries announced last summer. We will increase, on a voluntary basis, funding for programs to bring clean affordable energy to the poorest, such as the Scaling Up Renewable Energy Program.
24. To phase out and rationalize over the medium term inefficient fossil fuel subsidies while providing targeted support for the poorest. Inefficient fossil fuel subsidies encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change.
25. We call on our Energy and Finance Ministers to report to us their implementation strategies and timeline for acting to meet this critical commitment at our next meeting.
26. We will promote energy market transparency and market stability as part of our broader effort to avoid excessive volatility.
27. To maintain our openness and move toward greener, more sustainable growth.
28. We will fight protectionism. We are committed to bringing the Doha Round to a successful conclusion in 2010.
29. We will spare no effort to reach agreement in Copenhagen through the United Nations Framework Convention on Climate Change (UNFCCC) negotiations.
30. We warmly welcome the report by the Chair of the London Summit commissioned at our last meeting and published today.
31. Finally, we agreed to meet in Canada in June 2010 and in Korea in November 2010. We expect to meet annually thereafter and will meet in France in 2011.
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1. We assessed the progress we have made together in addressing the global crisis and agreed to maintain our steps to support economic activity until recovery is assured. We further committed to additional steps to ensure strong, sustainable, and balanced growth, to build a stronger international financial system, to reduce development imbalances, and to modernize our architecture for international economic cooperation.
A Framework for Strong, Sustainable, and Balanced Growth
2. The growth of the global economy and the success of our coordinated effort to respond to the recent crisis have increased the case for more sustained and systematic international cooperation. In the short-run, we must continue to implement our stimulus programs to support economic activity until recovery clearly has taken hold. We also need to develop a transparent and credible process for withdrawing our extraordinary fiscal, monetary and financial sector support, to be implemented when recovery becomes fully secured. We task our Finance Ministers, working with input from the IMF and FSB, at their November meeting to continue developing cooperative and coordinated exit strategies recognizing that the scale, timing, and sequencing of this process will vary across countries or regions and across the type of policy measures. Credible exit strategies should be designed and communicated clearly to anchor expectations and reinforce confidence.
3. The IMF estimates that world growth will resume this year and rise by nearly 3% by the end of 2010. Subsequently, our objective is to return the world to high, sustainable, and balanced growth, while maintaining our commitment to fiscal responsibility and sustainability, with reforms to increase our growth potential and capacity to generate jobs and policies designed to avoid both the re-creation of asset bubbles and the re-emergence of unsustainable global financial flows. We commit to put in place the necessary policy measures to achieve these outcomes.
4. We will need to work together as we manage the transition to a more balanced pattern of global growth. The crisis and our initial policy responses have already produced significant shifts in the pattern and level of growth across countries. Many countries have already taken important steps to expand domestic demand, bolstering global activity and reducing imbalances. In some countries, the rise in private saving now underway will, in time, need to be augmented by a rise in public saving. Ensuring a strong recovery will necessitate adjustments across different parts of the global economy, while requiring macroeconomic policies that promote adequate and balanced global demand as well as decisive progress on structural reforms that foster private domestic demand, narrow the global development gap, and strengthen long-run growth potential. The IMF estimates that only with such adjustments and realignments, will global growth reach a strong, sustainable, and balanced pattern. While governments have started moving in the right direction, a shared understanding and deepened dialogue will help build a more stable, lasting, and sustainable pattern of growth. Raising living standards in the emerging markets and developing countries is also a critical element in achieving sustainable growth in the global economy.
5. Today we are launching a Framework for Strong, Sustainable, and Balanced Growth. To put in place this framework, we commit to develop a process whereby we set out our objectives, put forward policies to achieve these objectives, and together assess our progress. We will ask the IMF to help us with its analysis of how our respective national or regional policy frameworks fit together. We will ask the World Bank to advise us on progress in promoting development and poverty reduction as part of the rebalancing of global growth. We will work together to ensure that our fiscal, monetary, trade, and structural policies are collectively consistent with more sustainable and balanced trajectories of growth. We will undertake macro prudential and regulatory policies to help prevent credit and asset price cycles from becoming forces of destabilization. As we commit to implement a new, sustainable growth model, we should encourage work on measurement methods so as to better take into account the social and environmental dimensions of economic development.
6. We call on our Finance Ministers and Central Bank Governors to launch the new Framework by November by initiating a cooperative process of mutual assessment of our policy frameworks and the implications of those frameworks for the pattern and sustainability of global growth. We believe that regular consultations, strengthened cooperation on macroeconomic policies, the exchange of experiences on structural policies, and ongoing assessment will promote the adoption of sound policies and secure a healthy global economy. Our compact is that:
- G-20 members will agree on shared policy objectives. These objectives should be updated as conditions evolve.
- G-20 members will set out our medium-term policy frameworks and will work together to assess the collective implications of our national policy frameworks for the level and pattern of global growth and to identify potential risks to financial stability.
- G-20 Leaders will consider, based on the results of the mutual assessment, and agree any actions to meet our common objectives.
7. This process will only be successful if it is supported by candid, even-handed, and balanced analysis of our policies. We ask the IMF to assist our Finance Ministers and Central Bank Governors in this process of mutual assessment by developing a forward-looking analysis of whether policies pursued by individual G-20 countries are collectively consistent with more sustainable and balanced trajectories for the global economy, and to report regularly to both the G-20 and the International Monetary and Financial Committee (IMFC), building on the IMF’s existing bilateral and multilateral surveillance analysis, on global economic developments, patterns of growth and suggested policy adjustments. Our Finance Ministers and Central Bank Governors will elaborate this process at their November meeting and we will review the results of the first mutual assessment at our next summit.
8. These policies will help us to meet our responsibility to the community of nations to build a more resilient international financial system and to reduce development imbalances.
9. Building on Chancellor Merkel’s proposed Charter, on which we will continue to work, we adopted today Core Values for Sustainable Economic Activity, which will include those of propriety, integrity, and transparency, and which will underpin the Framework.
Strengthening the International Financial Regulatory System
10. Major failures of regulation and supervision, plus reckless and irresponsible risk taking by banks and other financial institutions, created dangerous financial fragilities that contributed significantly to the current crisis. A return to the excessive risk taking prevalent in some countries before the crisis is not an option.
11. Since the onset of the global crisis, we have developed and begun implementing sweeping reforms to tackle the root causes of the crisis and transform the system for global financial regulation. Substantial progress has been made in strengthening prudential oversight, improving risk management, strengthening transparency, promoting market integrity, establishing supervisory colleges, and reinforcing international cooperation. We have enhanced and expanded the scope of regulation and oversight, with tougher regulation of over-the-counter (OTC) derivatives, securitization markets, credit rating agencies, and hedge funds. We endorse the institutional strengthening of the FSB through its Charter, following its establishment in London, and welcome its reports to Leaders and Ministers. The FSB’s ongoing efforts to monitor progress will be essential to the full and consistent implementation of needed reforms. We call on the FSB to report on progress to the G-20 Finance Ministers and Central Bank Governors in advance of the next Leaders summit.
12. Yet our work is not done. Far more needs to be done to protect consumers, depositors, and investors against abusive market practices, promote high quality standards, and help ensure the world does not face a crisis of the scope we have seen. We are committed to take action at the national and international level to raise standards together so that our national authorities implement global standards consistently in a way that ensures a level playing field and avoids fragmentation of markets, protectionism, and regulatory arbitrage. Our efforts to deal with impaired assets and to encourage the raising of additional capital must continue, where needed. We commit to conduct robust, transparent stress tests as needed. We call on banks to retain a greater proportion of current profits to build capital, where needed, to support lending. Securitization sponsors or originators should retain a part of the risk of the underlying assets, thus encouraging them to act prudently. It is important to ensure an adequate balance between macroprudential and microprudential regulation to control risks, and to develop the tools necessary to monitor and assess the buildup of macroprudential risks in the financial system. In addition, we have agreed to improve the regulation, functioning, and transparency of financial and commodity markets to address excessive commodity price volatility.
13. As we encourage the resumption of lending to households and businesses, we must take care not to spur a return of the practices that led to the crisis. The steps we are taking here, when fully implemented, will result in a fundamentally stronger financial system than existed prior to the crisis. If we all act together, financial institutions will have stricter rules for risk-taking, governance that aligns compensation with long-term performance, and greater transparency in their operations. All firms whose failure could pose a risk to financial stability must be subject to consistent, consolidated supervision and regulation with high standards. Our reform is multi-faceted but at its core must be stronger capital standards, complemented by clear incentives to mitigate excessive risk-taking practices. Capital allows banks to withstand those losses that inevitably will come. It, together with more powerful tools for governments to wind down firms that fail, helps us hold firms accountable for the risks that they take. Building on their Declaration on Further Steps to Strengthen the International Financial System, we call on our Finance Ministers and Central Bank Governors to reach agreement on an international framework of reform in the following critical areas:
- Building high quality capital and mitigating pro-cyclicality: We commit to developing by end-2010 internationally agreed rules to improve both the quantity and quality of bank capital and to discourage excessive leverage. These rules will be phased in as financial conditions improve and economic recovery is assured, with the aim of implementation by end-2012. The national implementation of higher level and better quality capital requirements, counter-cyclical capital buffers, higher capital requirements for risky products and off-balance sheet activities, as elements of the Basel II Capital Framework, together with strengthened liquidity risk requirements and forward-looking provisioning, will reduce incentives for banks to take excessive risks and create a financial system better prepared to withstand adverse shocks. We welcome the key measures recently agreed by the oversight body of the Basel Committee to strengthen the supervision and regulation of the banking sector. We support the introduction of a leverage ratio as a supplementary measure to the Basel II risk-based framework with a view to migrating to a Pillar 1 treatment based on appropriate review and calibration. To ensure comparability, the details of the leverage ratio will be harmonized internationally, fully adjusting for differences in accounting. All major G-20 financial centers commit to have adopted the Basel II Capital Framework by 2011.
- Reforming compensation practices to support financial stability: Excessive compensation in the financial sector has both reflected and encouraged excessive risk taking. Reforming compensation policies and practices is an essential part of our effort to increase financial stability. We fully endorse the implementation standards of the FSB aimed at aligning compensation with long-term value creation, not excessive risk-taking, including by (i) avoiding multi-year guaranteed bonuses; (ii) requiring a significant portion of variable compensation to be deferred, tied to performance and subject to appropriate clawback and to be vested in the form of stock or stock-like instruments, as long as these create incentives aligned with long-term value creation and the time horizon of risk; (iii) ensuring that compensation for senior executives and other employees having a material impact on the firm’s risk exposure align with performance and risk; (iv) making firms’ compensation policies and structures transparent through disclosure requirements; (v) limiting variable compensation as a percentage of total net revenues when it is inconsistent with the maintenance of a sound capital base; and (vi) ensuring that compensation committees overseeing compensation policies are able to act independently. Supervisors should have the responsibility to review firms’ compensation policies and structures with institutional and systemic risk in mind and, if necessary to offset additional risks, apply corrective measures, such as higher capital requirements, to those firms that fail to implement sound compensation policies and practices. Supervisors should have the ability to modify compensation structures in the case of firms that fail or require extraordinary public intervention. We call on firms to implement these sound compensation practices immediately. We task the FSB to monitor the implementation of FSB standards and propose additional measures as required by March 2010.
- Improving over-the-counter derivatives markets: All standardized OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements. We ask the FSB and its relevant members to assess regularly implementation and whether it is sufficient to improve transparency in the derivatives markets, mitigate systemic risk, and protect against market abuse.
- Addressing cross-border resolutions and systemically important financial institutions by end-2010: Systemically important financial firms should develop internationally-consistent firm-specific contingency and resolution plans. Our authorities should establish crisis management groups for the major cross-border firms and a legal framework for crisis intervention as well as improve information sharing in times of stress. We should develop resolution tools and frameworks for the effective resolution of financial groups to help mitigate the disruption of financial institution failures and reduce moral hazard in the future. Our prudential standards for systemically important institutions should be commensurate with the costs of their failure. The FSB should propose by the end of October 2010 possible measures including more intensive supervision and specific additional capital, liquidity, and other prudential requirements.
14. We call on our international accounting bodies to redouble their efforts to achieve a single set of high quality, global accounting standards within the context of their independent standard setting process, and complete their convergence project by June 2011. The International Accounting Standards Board’s (IASB) institutional framework should further enhance the involvement of various stakeholders.
15. Our commitment to fight non-cooperative jurisdictions (NCJs) has produced impressive results. We are committed to maintain the momentum in dealing with tax havens, money laundering, proceeds of corruption, terrorist financing, and prudential standards. We welcome the expansion of the Global Forum on Transparency and Exchange of Information, including the participation of developing countries, and welcome the agreement to deliver an effective program of peer review. The main focus of the Forum’s work will be to improve tax transparency and exchange of information so that countries can fully enforce their tax laws to protect their tax base. We stand ready to use countermeasures against tax havens from March 2010. We welcome the progress made by the Financial Action Task Force (FATF) in the fight against money laundering and terrorist financing and call upon the FATF to issue a public list of high risk jurisdictions by February 2010. We call on the FSB to report progress to address NCJs with regards to international cooperation and information exchange in November 2009 and to initiate a peer review process by February 2010.
16. We task the IMF to prepare a report for our next meeting with regard to the range of options countries have adopted or are considering as to how the financial sector could make a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system.
Modernizing our Global Institutions to Reflect Today’s Global Economy
17. Modernizing the international financial institutions and global development architecture is essential to our efforts to promote global financial stability, foster sustainable development, and lift the lives of the poorest. We warmly welcome Prime Minister Brown’s report on his review of the responsiveness and adaptability of the international financial institutions (IFIs) and ask our Finance Ministers to consider its conclusions.
Reforming the Mandate, Mission and Governance of the IMF
18. Our commitment to increase the funds available to the IMF allowed it to stem the spread of the crisis to emerging markets and developing countries. This commitment and the innovative steps the IMF has taken to create the facilities needed for its resources to be used efficiently and flexibly have reduced global risks. Capital again is flowing to emerging economies.
19. We have delivered on our promise to treble the resources available to the IMF. We are contributing over $500 billion to a renewed and expanded IMF New Arrangements to Borrow (NAB). The IMF has made Special Drawing Rights (SDR) allocations of $283 billion in total, more than $100 billion of which will supplement emerging market and developing countries’ existing reserve assets. Resources from the agreed sale of IMF gold, consistent with the IMF’s new income model, and funds from internal and other sources will more than double the Fund’s medium-term concessional lending capacity.
20. Our collective response to the crisis has highlighted both the benefits of international cooperation and the need for a more legitimate and effective IMF. The Fund must play a critical role in promoting global financial stability and rebalancing growth. We welcome the reform of IMF’s lending facilities, including the creation of the innovative Flexible Credit Line. The IMF should continue to strengthen its capacity to help its members cope with financial volatility, reducing the economic disruption from sudden swings in capital flows and the perceived need for excessive reserve accumulation. As recovery takes hold, we will work together to strengthen the Fund’s ability to provide even-handed, candid and independent surveillance of the risks facing the global economy and the international financial system. We ask the IMF to support our effort under the Framework for Strong, Sustainable and Balanced Growth through its surveillance of our countries’ policy frameworks and their collective implications for financial stability and the level and pattern of global growth.
21. Modernizing the IMF’s governance is a core element of our effort to improve the IMF’s credibility, legitimacy, and effectiveness. We recognize that the IMF should remain a quota-based organization and that the distribution of quotas should reflect the relative weights of its members in the world economy, which have changed substantially in view of the strong growth in dynamic emerging market and developing countries. To this end, we are committed to a shift in quota share to dynamic emerging market and developing countries of at least five percent from over-represented to under-represented countries using the current IMF quota formula as the basis to work from. We are also committed to protecting the voting share of the poorest in the IMF. On this basis and as part of the IMF’s quota review, to be completed by January 2011, we urge an acceleration of work toward bringing the review to a successful conclusion. As part of that review, we agree that a number of other critical issues will need to be addressed, including: the size of any increase in IMF quotas, which will have a bearing on the ability to facilitate change in quota shares; the size and composition of the Executive Board; ways of enhancing the Board’s effectiveness; and the Fund Governors’ involvement in the strategic oversight of the IMF. Staff diversity should be enhanced. As part of a comprehensive reform package, we agree that the heads and senior leadership of all international institutions should be appointed through an open, transparent and merit-based process. We must urgently implement the package of IMF quota and voice reforms agreed in April 2008.
Reforming the Mission, Mandate and Governance of Our Development banks
22. The Multilateral Development Banks (MDBs) responded to our April call to accelerate and expand lending to mitigate the impact of the crisis on the world’s poorest with streamlined facilities, new tools and facilities, and a rapid increase in their lending. They are on track to deliver the promised $100 billion in additional lending. We welcome and encourage the MDBs to continue making full use of their balance sheets. We also welcome additional measures such as the temporary use of callable capital contributions from a select group of donors as was done at the InterAmerican Development Bank (IaDB). Our Finance Ministers should consider how mechanisms such as temporary callable and contingent capital could be used in the future to increase MDB lending at times of crisis. We reaffirm our commitment to ensure that the Multilateral Development Banks and their concessional lending facilities, especially the International Development Agency (IDA) and the African Development Fund, are appropriately funded.
23. Even as we work to mitigate the impact of the crisis, we must strengthen and reform the global development architecture for responding to the world’s long-term challenges.
24. We agree that development and reducing global poverty are central to the development banks’ core mission. The World Bank and other multilateral development banks are also critical to our ability to act together to address challenges, such as climate change and food security, which are global in nature and require globally coordinated action. The World Bank, working with the regional development banks and other international organizations, should strengthen:
- its focus on food security through enhancements in agricultural productivity and access to technology, and improving access to food, in close cooperation with relevant specialized agencies;
- its focus on human development and security in the poorest and most challenging environments;
- support for private-sector led growth and infrastructure to enhance opportunities for the poorest, social and economic inclusion, and economic growth; and
- contributions to financing the transition to a green economy through investment in sustainable clean energy generation and use, energy efficiency and climate resilience; this includes responding to countries needs to integrate climate change concerns into their core development strategies, improved domestic policies, and to access new sources of climate finance.
25. To enhance their effectiveness, the World Bank and the regional development banks should strengthen their coordination, when appropriate, with other bilateral and multilateral institutions. They should also strengthen recipient country ownership of strategies and programs and allow adequate policy space.
26. We will help ensure the World Bank and the regional development banks have sufficient resources to fulfill these four challenges and their development mandate, including through a review of their general capital increase needs to be completed by the first half of 2010. Additional resources must be joined to key institutional reforms to ensure effectiveness: greater coordination and a clearer division of labor; an increased commitment to transparency, accountability, and good corporate governance; an increased capacity to innovate and achieve demonstrable results; and greater attention to the needs of the poorest populations.
27. We commit to pursue governance and operational effectiveness reform in conjunction with voting reform to ensure that the World Bank is relevant, effective, and legitimate. We stress the importance of moving towards equitable voting power in the World Bank over time through the adoption of a dynamic formula which primarily reflects countries’ evolving economic weight and the World Bank’s development mission, and that generates in the next shareholding review a significant increase of at least 3% of voting power for developing and transition countries, in addition to the 1.46% increase under the first phase of this important adjustment, to the benefit of under-represented countries. While recognizing that over-represented countries will make a contribution, it will be important to protect the voting power of the smallest poor countries. We recommit to reaching agreement by the 2010 Spring Meetings.
Energy Security and Climate Change
28. Access to diverse, reliable, affordable and clean energy is critical for sustainable growth. Inefficient markets and excessive volatility negatively affect both producers and consumers. Noting the St. Petersburg Principles on Global Energy Security, which recognize the shared interest of energy producing, consuming and transiting countries in promoting global energy security, we individually and collectively commit to:
- Increase energy market transparency and market stability by publishing complete, accurate, and timely data on oil production, consumption, refining and stock levels, as appropriate, on a regular basis, ideally monthly, beginning by January 2010. We note the Joint Oil Data Initiative as managed by the International Energy Forum (IEF) and welcome their efforts to examine the expansion of their data collection to natural gas. We will improve our domestic capabilities to collect energy data and improve energy demand and supply forecasting and ask the International Energy Agency (IEA) and the Organization of Petroleum Exporting Countries (OPEC) to ramp up their efforts to assist interested countries in developing those capabilities. We will strengthen the producer-consumer dialogue to improve our understanding of market fundamentals, including supply and demand trends, and price volatility, and note the work of the IEF experts group.
- Improve regulatory oversight of energy markets by implementing the International Organization of Securities Commissions (IOSCO) recommendations on commodity futures markets and calling on relevant regulators to collect data on large concentrations of trader positions on oil in our national commodities futures markets. We ask our relevant regulators to report back at our next meeting on progress towards implementation. We will direct relevant regulators to also collect related data on over-the-counter oil markets and to take steps to combat market manipulation leading to excessive price volatility. We call for further refinement and improvement of commodity market information, including through the publication of more detailed and disaggregated data, coordinated as far as possible internationally. We ask IOSCO to help national governments design and implement these policies, conduct further analysis including with regard with to excessive volatility, make specific recommendations, and to report regularly on our progress.
29. Enhancing our energy efficiency can play an important, positive role in promoting energy security and fighting climate change. Inefficient fossil fuel subsidies encourage wasteful consumption, distort markets, impede investment in clean energy sources and undermine efforts to deal with climate change. The Organization for Economic Cooperation and Development (OECD) and the IEA have found that eliminating fossil fuel subsidies by 2020 would reduce global greenhouse gas emissions in 2050 by ten percent. Many countries are reducing fossil fuel subsidies while preventing adverse impact on the poorest. Building on these efforts and recognizing the challenges of populations suffering from energy poverty, we commit to:
- Rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption. As we do that, we recognize the importance of providing those in need with essential energy services, including through the use of targeted cash transfers and other appropriate mechanisms. This reform will not apply to our support for clean energy, renewables, and technologies that dramatically reduce greenhouse gas emissions. We will have our Energy and Finance Ministers, based on their national circumstances, develop implementation strategies and timeframes, and report back to Leaders at the next Summit. We ask the international financial institutions to offer support to countries in this process. We call on all nations to adopt policies that will phase out such subsidies worldwide.
30. We request relevant institutions, such as the IEA, OPEC, OECD, and World Bank, provide an analysis of the scope of energy subsidies and suggestions for the implementation of this initiative and report back at the next summit.
31. Increasing clean and renewable energy supplies, improving energy efficiency, and promoting conservation are critical steps to protect our environment, promote sustainable growth and address the threat of climate change. Accelerated adoption of economically sound clean and renewable energy technology and energy efficiency measures diversifies our energy supplies and strengthens our energy security. We commit to:
- Stimulate investment in clean energy, renewables, and energy efficiency and provide financial and technical support for such projects in developing countries.
- Take steps to facilitate the diffusion or transfer of clean energy technology including by conducting joint research and building capacity. The reduction or elimination of barriers to trade and investment in this area are being discussed and should be pursued on a voluntary basis and in appropriate fora.
32. As leaders of the world’s major economies, we are working for a resilient, sustainable, and green recovery. We underscore anew our resolve to take strong action to address the threat of dangerous climate change. We reaffirm the objective, provisions, and principles of the United Nations Framework Convention on Climate Change (UNFCCC), including common but differentiated responsibilities. We note the principles endorsed by Leaders at the Major Economies Forum in L’Aquila, Italy. We will intensify our efforts, in cooperation with other parties, to reach agreement in Copenhagen through the UNFCCC negotiation. An agreement must include mitigation, adaptation, technology, and financing.
33. We welcome the work of the Finance Ministers and direct them to report back at their next meeting with a range of possible options for climate change financing to be provided as a resource to be considered in the UNFCCC negotiations at Copenhagen.
Strengthening Support for the Most Vulnerable
34. Many emerging and developing economies have made great strides in raising living standards as their economies converge toward the productivity levels and living standards of advanced economies. This process was interrupted by the crisis and is still far from complete. The poorest countries have little economic cushion to protect vulnerable populations from calamity, particularly as the financial crisis followed close on the heels of a global spike in food prices. We note with concern the adverse impact of the global crisis on low income countries’ (LICs) capacity to protect critical core spending in areas such as health, education, safety nets, and infrastructure. The UN’s new Global Impact Vulnerability Alert System will help our efforts to monitor the impact of the crisis on the most vulnerable. We share a collective responsibility to mitigate the social impact of the crisis and to assure that all parts of the globe participate in the recovery.
35. The MDBs play a key role in the fight against poverty. We recognize the need for accelerated and additional concessional financial support to LICs to cushion the impact of the crisis on the poorest, welcome the increase in MDB lending during the crisis and support the MDBs having the resources needed to avoid a disruption of concessional financing to the most vulnerable countries. The IMF also has increased its concessional lending to LICs during the crisis. Resources from the sale of IMF gold, consistent with the new income model, and funds from internal and other sources will double the Fund’s medium-term concessional lending capacity.
36. Several countries are considering creating, on a voluntary basis, mechanisms that could allow, consistent with their national circumstances, the mobilization of existing SDR resources to support the IMF’s lending to the poorest countries. Even as we work to mitigate the impact of the crisis, we must strengthen and reform the global development architecture for responding to the world’s long-term challenges. We ask our relevant ministers to explore the benefits of a new crisis support facility in IDA to protect LICs from future crises and the enhanced use of financial instruments in protecting the investment plans of middle income countries from interruption in times of crisis, including greater use of guarantees.
37. We reaffirm our historic commitment to meet the Millennium Development Goals and our respective Official Development Assistance (ODA) pledges, including commitments on Aid for Trade, debt relief, and those made at Gleneagles, especially to sub-Saharan Africa, to 2010 and beyond.
38. Even before the crisis, too many still suffered from hunger and poverty and even more people lack access to energy and finance. Recognizing that the crisis has exacerbated this situation, we pledge cooperation to improve access to food, fuel, and finance for the poor.
39. Sustained funding and targeted investments are urgently needed to improve long-term food security. We welcome and support the food security initiative announced in L’Aquila and efforts to further implement the Global Partnership for Agriculture and Food Security and to address excessive price volatility. We call on the World Bank to work with interested donors and organizations to develop a multilateral trust fund to scale-up agricultural assistance to low-income countries. This will help support innovative bilateral and multilateral efforts to improve global nutrition and build sustainable agricultural systems, including programs like those developed through the Comprehensive African Agricultural Development Program (CAADP). It should be designed to ensure country ownership and rapid disbursement of funds, fully respecting the aid effectiveness principles agreed in Accra, and facilitate the participation of private foundations, businesses, and non-governmental organizations (NGOs) in this historic effort. These efforts should complement the UN Comprehensive Framework for Agriculture. We ask the World Bank, the African Development Bank, UN, Food and Agriculture Organization (FAO), International Fund for Agricultural Development (IFAD), World Food Programme (WFP) and other stakeholders to coordinate their efforts, including through country-led mechanisms, in order to complement and reinforce other existing multilateral and bilateral efforts to tackle food insecurity.
40. To increase access to energy, we will promote the deployment of clean, affordable energy resources to the developing world. We commit, on a voluntary basis, to funding programs that achieve this objective, such as the Scaling Up Renewable Energy Program and the Energy for the Poor Initiative, and to increasing and more closely harmonizing our bilateral efforts.
41. We commit to improving access to financial services for the poor. We have agreed to support the safe and sound spread of new modes of financial service delivery capable of reaching the poor and, building on the example of micro finance, will scale up the successful models of small and medium-sized enterprise (SME) financing. Working with the Consultative Group to Assist the Poor (CGAP), the International Finance Corporation (IFC) and other international organizations, we will launch a G-20 Financial Inclusion Experts Group. This group will identify lessons learned on innovative approaches to providing financial services to these groups, promote successful regulatory and policy approaches and elaborate standards on financial access, financial literacy, and consumer protection. We commit to launch a G-20 SME Finance Challenge, a call to the private sector to put forward its best proposals for how public finance can maximize the deployment of private finance on a sustainable and scalable basis.
42. As we increase the flow of capital to developing countries, we also need to prevent its illicit outflow. We will work with the World Bank’s Stolen Assets Recovery (StAR) program to secure the return of stolen assets to developing countries, and support other efforts to stem illicit outflows. We ask the FATF to help detect and deter the proceeds of corruption by prioritizing work to strengthen standards on customer due diligence, beneficial ownership and transparency. We note the principles of the Paris Declaration on Aid Effectiveness and the Accra Agenda for Action and will work to increase the transparency of international aid flows by 2010. We call for the adoption and enforcement of laws against transnational bribery, such as the OECD Anti-Bribery Convention, and the ratification by the G-20 of the UN Convention against Corruption (UNCAC) and the adoption during the third Conference of the Parties in Doha of an effective, transparent, and inclusive mechanism for the review of its implementation. We support voluntary participation in the Extractive Industries Transparency Initiative, which calls for regular public disclosure of payments by extractive industries to governments and reconciliation against recorded receipt of those funds by governments.
Putting Quality Jobs at the Heart of the Recovery
43. The prompt, vigorous and sustained response of our countries has saved or created millions of jobs. Based on International Labour Organization (ILO) estimates, our efforts will have created or saved at least 7 – 11 million jobs by the end of this year. Without sustained action, unemployment is likely to continue rising in many of our countries even after economies stabilize, with a disproportionate impact on the most vulnerable segments of our population. As growth returns, every country must act to ensure that employment recovers quickly. We commit to implementing recovery plans that support decent work, help preserve employment, and prioritize job growth. In addition, we will continue to provide income, social protection, and training support for the unemployed and those most at risk of unemployment. We agree that the current challenges do not provide an excuse to disregard or weaken internationally recognized labor standards. To assure that global growth is broadly beneficial, we should implement policies consistent with ILO fundamental principles and rights at work.
44. Our new Framework for Strong, Sustainable, and Balanced Growth requires structural reforms to create more inclusive labor markets, active labor market policies, and quality education and training programs. Each of our countries will need, through its own national policies, to strengthen the ability of our workers to adapt to changing market demands and to benefit from innovation and investments in new technologies, clean energy, environment, health, and infrastructure. It is no longer sufficient to train workers to meet their specific current needs; we should ensure access to training programs that support lifelong skills development and focus on future market needs. Developed countries should support developing countries to build and strengthen their capacities in this area. These steps will help to assure that the gains from new inventions and lifting existing impediments to growth are broadly shared.
45. We pledge to support robust training efforts in our growth strategies and investments. We recognize successful employment and training programs are often designed together with employers and workers, and we call on the ILO, in partnership with other organizations, to convene its constituents and NGOs to develop a training strategy for our consideration.
46. We agree on the importance of building an employment-oriented framework for future economic growth. In this context, we reaffirm the importance of the London Jobs Conference and Rome Social Summit. We also welcome the recently-adopted ILO Resolution on Recovering from the Crisis: A Global Jobs Pact, and we commit our nations to adopt key elements of its general framework to advance the social dimension of globalization. The international institutions should consider ILO standards and the goals of the Jobs Pact in their crisis and post-crisis analysis and policy-making activities.
47. To ensure our continued focus on employment policies, the Chair of the Pittsburgh Summit has asked his Secretary of Labor to invite our Employment and Labor Ministers to meet as a group in early 2010 consulting with labor and business and building on the upcoming OECD Labour and Employment Ministerial meeting on the jobs crisis. We direct our Ministers to assess the evolving employment situation, review reports from the ILO and other organizations on the impact of policies we have adopted, report on whether further measures are desirable, and consider medium-term employment and skills development policies, social protection programs, and best practices to ensure workers are prepared to take advantage of advances in science and technology.
An Open Global Economy
48. Continuing the revival in world trade and investment is essential to restoring global growth. It is imperative we stand together to fight against protectionism. We welcome the swift implementation of the $250 billion trade finance initiative. We will keep markets open and free and reaffirm the commitments made in Washington and London: to refrain from raising barriers or imposing new barriers to investment or to trade in goods and services, imposing new export restrictions or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports and commit to rectify such measures as they arise. We will minimize any negative impact on trade and investment of our domestic policy actions, including fiscal policy and action to support the financial sector. We will not retreat into financial protectionism, particularly measures that constrain worldwide capital flows, especially to developing countries. We will notify promptly the WTO of any relevant trade measures. We welcome the latest joint report from the WTO, OECD, IMF, and United Nations Conference on Trade and Development (UNCTAD) and ask them to continue to monitor the situation within their respective mandates, reporting publicly on these commitments on a quarterly basis.
49. We remain committed to further trade liberalization. We are determined to seek an ambitious and balanced conclusion to the Doha Development Round in 2010, consistent with its mandate, based on the progress already made, including with regard to modalities. We understand the need for countries to directly engage with each other, within the WTO bearing in mind the centrality of the multilateral process, in order to evaluate and close the remaining gaps. We note that in order to conclude the negotiations in 2010, closing those gaps should proceed as quickly as possible. We ask our ministers to take stock of the situation no later than early 2010, taking into account the results of the work program agreed to in Geneva following the Delhi Ministerial, and seek progress on Agriculture, Non-Agricultural Market Access, as well as Services, Rules, Trade Facilitation and all other remaining issues. We will remain engaged and review the progress of the negotiations at our next meeting.
The Path from Pittsburgh
50. Today, we designated the G-20 as the premier forum for our international economic cooperation. We have asked our representatives to report back at the next meeting with recommendations on how to maximize the effectiveness of our cooperation. We agreed to have a G-20 Summit in Canada in June 2010, and in Korea in November 2010. We expect to meet annually thereafter, and will meet in France in 2011.
ANNEX: Core Values for Sustainable Economic Activity
1. The economic crisis demonstrates the importance of ushering in a new era of sustainable global economic activity grounded in responsibility. The current crisis has once again confirmed the fundamental recognition that our growth and prosperity are interconnected, and that no region of the globe can wall itself off in a globalized world economy.
2. We, the Leaders of the countries gathered for the Pittsburgh Summit, recognize that concerted action is needed to help our economies get back to stable ground and prosper tomorrow. We commit to taking responsible actions to ensure that every stakeholder – consumers, workers, investors, entrepreneurs – can participate in a balanced, equitable, and inclusive global economy.
3. We share the overarching goal to promote a broader prosperity for our people through balanced growth within and across nations; through coherent economic, social, and environmental strategies; and through robust financial systems and effective international collaboration.
4. We recognize that there are different approaches to economic development and prosperity, and that strategies to achieve these goals may vary according to countries’ circumstances.
5. We also agree that certain key principles are fundamental, and in this spirit we commit to respect the following core values:
- We have a responsibility to ensure sound macroeconomic policies that serve long-term economic objectives and help avoid unsustainable global imbalances.
- We have a responsibility to reject protectionism in all its forms, support open markets, foster fair and transparent competition, and promote entrepreneurship and innovation across countries.
- We have a responsibility to ensure, through appropriate rules and incentives, that financial and other markets function based on propriety, integrity and transparency and to encourage businesses to support the efficient allocation of resources for sustainable economic performance.
- We have a responsibility to provide for financial markets that serve the needs of households, businesses and productive investment by strengthening oversight, transparency, and accountability.
- We have a responsibility to secure our future through sustainable consumption, production and use of resources that conserve our environment and address the challenge of climate change.
- We have a responsibility to invest in people by providing education, job training, decent work conditions, health care and social safety net support, and to fight poverty, discrimination, and all forms of social exclusion.
- We have a responsibility to recognize that all economies, rich and poor, are partners in building a sustainable and balanced global economy in which the benefits of economic growth are broadly and equitably shared. We also have a responsibility to achieve the internationally agreed development goals.
- We have a responsibility to ensure an international economic and financial architecture that reflects changes in the world economy and the new challenges of globalization.
G-20 Framework for Strong, Sustainable, and Balanced Growth
1. Our countries have a shared responsibility to adopt policies to achieve strong, sustainable and balanced growth, to promote a resilient international financial system, and to reap the benefits of an open global economy. To this end, we recognize that our strategies will vary across countries. In our Framework for Strong, Sustainable and Balanced Growth, we will:
- implement responsible fiscal policies, attentive to short-term flexibility considerations and longer-run sustainability requirements.
- strengthen financial supervision to prevent the re-emergence in the financial system of excess credit growth and excess leverage and undertake macro prudential and regulatory policies to help prevent credit and asset price cycles from becoming forces of destabilization.
- promote more balanced current accounts and support open trade and investment to advance global prosperity and growth sustainability, while actively rejecting protectionist measures.
- undertake monetary policies consistent with price stability in the context of market oriented exchange rates that reflect underlying economic fundamentals.
- undertake structural reforms to increase our potential growth rates and, where needed, improve social safety nets.
- promote balanced and sustainable economic development in order to narrow development imbalances and reduce poverty.
2. We recognize that the process to ensure more balanced global growth must be undertaken in an orderly manner. All G-20 members agree to address the respective weaknesses of their economies.
- G-20 members with sustained, significant external deficits pledge to undertake policies to support private savings and undertake fiscal consolidation while maintaining open markets and strengthening export sectors.
- G-20 members with sustained, significant external surpluses pledge to strengthen domestic sources of growth. According to national circumstances this could include increasing investment, reducing financial markets distortions, boosting productivity in service sectors, improving social safety nets, and lifting constraints on demand growth.
3. Each G-20 member bears primary responsibility for the sound management of its economy. The G-20 members also have a responsibility to the community of nations to assure the overall health of the global economy. Regular consultations, strengthened cooperation on macroeconomic policies, the exchange of experiences on structural policies, and ongoing assessment can strengthen our cooperation and promote the adoption of sound policies. As part of our process of mutual assessment:
- G-20 members will agree on shared policy objectives. These objectives should be updated as conditions evolve.
- G-20 members will set out their medium-term policy frameworks and will work together to assess the collective implications of our national policy frameworks for the level and pattern of global growth, and to identify potential risks to financial stability.
- G-20 leaders will consider, based on the results of the mutual assessment, and agree any actions to meet our common objectives.
4. We call on our Finance Ministers to develop our process of mutual assessment to evaluate the collective implications of national policies for the world economy. To accomplish this, our Finance Ministers should, with the assistance of the IMF:
- Develop a forward looking assessment of G-20 economic developments to help analyze whether patterns of demand and supply, credit, debt and reserves growth are supportive of strong, sustainable and balanced growth.
- Assess the implications and consistency of fiscal and monetary policies, credit growth and asset markets, foreign exchange developments, commodity and energy prices, and current account imbalances.
- Report regularly to both the G-20 and the IMFC on global economic developments, key risks, and concerns with respect to patterns of growth and suggested G-20 policy adjustments, individually and collectively.
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