According to an article published by the Brazilian minister of Finance, Guido Mantega, on Thursday, November 6, in the daily Folha de S. Paulo, "governance of the global economy and international finance needs urgent change."
In 2008, Brazil has been in the rotating presidency of the G-20, the group that includes the main economies in the world and the main emerging markets. To Mantega, participation of developing nations in international decision forums must be expanded.
He defends, for example, that in the International Monetary Fund (IMF) and the World Bank (IBRD) rich countries and emerging nations should have equal power of decision, that organizations like the G-20 itself should be strengthened, and that the G-7 should be expanded.
The G-20 was established in 1999 as an answer to the crises that faced the world economy at the end of the last decade, like the crises in Asia, Mexico and Russia. Back at that time there was perception that the great emerging nations were not duly represented in the global decisions, although they suffered the turbulence.
The idea of creation of the group was to bring together the most industrialized nations with the main developing nations to discuss the most important themes for the global economy. Together, these nations, according to the web page of the G-20, represent 90% of the Gross Domestic Product (GDP) of the world, 80% of global trade and two thirds of the planet's population.
According to Mantega, to play an important part, the bloc should have conditions to implement concrete policies. "The deliberations should more directly influence the work of multilateral financial institutions; its capacity of dealing with the management and resolution of crises should be strengthened," stated the minister in his article in Folha.
He proposes that the meetings of the group should take place twice a year before the IMF and IBRD meetings. Nowadays, the G-20 ministers and central bank governors meet once a year.
Apart from that, Mantega suggests the promotion of extraordinary meetings, like the one that took place in October, as well as the creation of a "virtual situation room", managed by the country occupying the presidency, to exchange information and coordinate answers to economic crises. "It is, most of all, a question of political desire," stated the minister.
Mantega also suggests the expansion of the Financial Stability Forum (FSF), an organization established by the countries that are members of the G-7, the richest in the world, plus Australia, Singapore, Hong Kong, the Netherlands and Switzerland. The objective is, according to the minister, "to promote financial stability through the exchange of information and cooperation in the area of financial regulation and supervision."
Apart from Mantega and the governor of the Brazilian Central Bank, Henrique Meirelles, the meeting should include, according to information supplied by the Finance Ministry's press department, representatives of all members of the group, which includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States and the European Union. The minister of finance of Egypt, Youssef Boutros Ghali, should also participate.
On Friday there were meetings between ministers and central bank governors of Brazil, Russia, India, China, South Africa and Mexico. On Saturday morning there will be the official opening of the event with the participation of Brazilian President, Luiz Inácio Lula da Silva.
According to a spokesperson for the Ministry of Finance, on Saturday, ministers and central bank governors should discuss the current global economic scenery and measures to fight the crisis.
On Sunday the theme should be the adequacy of the international financial system to the current economic scenery. At the closing a joint statement should be issued. On November 15, a summit of the G-20 will take place in Washington, US.
Anba