G20 :Balance Of Power Shifts From West To China, India

Six hours of sermons and discourse was hardly enough for revamping the world’s dodgy financial landscape. But leaders of the Group of 20 nations who gathered for an emergency meeting agreed on a far-reaching 16-week roadmap to restore confidence in a tottering financial system that has shaken the world. India too gained much from the summit, not the least a seat at the high table of decision-making and a bigger say in the scheme of things that will unfold over the next decade. In fact, for much of the US media, the big story out of the summit was the gradual shift in the balance of power from the western world to Asia, primarily China and India. In a surprisingly strong and detailed document blandly called the ‘Washington Declaration’, the G20 leaders agreed “to lay the foundation for reform to help to ensure that a similar crisis does not happen again’’. In the “action plan’’ that kicks in immediately are steps to boost the standards of credit rating agencies, address weaknesses in accounting and disclosure standards, ensure cooperation between national financial authorities, including meetings to share information, and a risk warning system for banks going out on a limb. The G20 also heeded the call from India and other developing countries to reform international financial institutions such as IMF and World Bank to give emerging market eco-nomies and developing countries “greater voice’’. It also agreed to expand the financial stability forum to include more emerging economies. A “college of supervisors’’ will be set up to monitor the world’s biggest financial institutions, including US systems.