As leaders of the G20 members states fly into London for Thursday’s summit, skepticism is growing about what it will achieve.
There is a widespread belief that the meeting will fail to find common ground in its bid to rescue the world economy. However, the G20 summit is expected to give a boost to green development.
Differing interests may lead to G20 failure
Because there are too many vested interests, the G20 will produce a fairly watered down result which won’t actually achieve very much, said British Member of Parliament Geoffrey Clifton-Brown during an interview.
“It’s a huge tragedy for the world when there are such big issues at stake. I hope I’m wrong, I hope I’m pessimistic. But we’ll have to wait and see,” said Clifton-Brown, who is Shadow Minister for Trade and International Development.
“The G20 has the capacity to fix the world economy. However, I rather fear, given the huge difference [between attending countries], that we’ll see a rather weak communiqué coming out of this,” he said after speaking at an international conference on corporate responsibility in London.
“The West has different interests from China, it has different interests from Russia,” he explains, adding that few people were considering the whole world, “they’re just considering their own interests rather than the wider world.”
The most positive outcome of the London summit would be a communiqué that obliged all the G20 countries to complete the Doha round and get an agreement on the WTO talks, Clifton-Brown said, adding that it would be beneficial for both the G20 and third world countries.
“It's through trade, through free trade, that advance countries of the G20 and those countries of the third world will benefit,” he said.
“Increased protectionism by America caused the slump in the 1930s that took decades to recover from; we must not go down that route,” he insisted.
Clifton-Brown’s opinions were echoed by Aneel Karnani, professor at the Michigan Ross School of Business, who also spoke at the London conference.
"I don't think there's going to be much achieved in the G20. They're not going to get much agreement. They have the capability but it's not going to happen. Because the interests of the countries are different," Karnani said during an interview.
"There are some things that they'll probably all agree on, such as rejecting protectionism, and that we should have free markets,” he said, “that's probably going to happen with or without the G20.”
But he said other more controversial mechanisms, needed to generate growth, may well be rejected.
Green economy
To put the world economic recovery onto a low-carbon path is high on the agenda of the G20. However, the vision has met with a mixed response.
Takejiro Sueyoshi, special adviser to UNEP FI (The United Nations Environment Programme Finance Initiative), said that he believed the recession was a good opportunity to develop green economies, something he insisted was within the interest of all countries.
During his speech Sueyoshi urged banks to invest at least one percent of their loan portfolios every year into green businesses.
He also called for the creation of regulatory authorities to supervise how banks deal with public money, as part of efforts to ensure the green transformation.
However, for some, the development of a green economy is regarded as being a luxury rather than a remedy for the recession.
A low carbon economy is difficult for countries, like the U.S., the UK and China, which consume increasing amounts of energy, said MP Geoffrey Clifton-Brown, adding that “what we have to find is an effective way of reducing those emissions.”
Touching upon the price of green development, Professor Aneel Karnani said, “This is not a good opportunity right now [to develop green initiatives] because it uses more resources, and during an economic downturn I think we're less willing to invest in these technologies.”
“In the long term we should have green development; but it comes at a price, it doesn't come for free," Karnani said, adding that, “especially in the current climate of an economic downturn, the investment in green is going to go down.”
Sustainability believed to be a solution
The two-day conference, organized by think tank Chatham House and index company FTSE, probed issues about how to manage the transition to a world where future resource constraints are reflected in prices and business behaviour.
Attending the meeting were governmental officials, NGO representatives, university professors, and financial experts from Europe, the U.S., Asia and Africa. They explored how to adopt sustainability into business ethics.
The Standard Chartered Bank has been less affected by the global downturn, which is partly explained by their approach to sustainable development.
"When it comes to the financial crisis, we are living through extraordinary times, we've seen the collapse of many financial institutions, we've seen the bail out in the UK and US of many banks, what it shows is that their business models are not sustainable," Standard Chartered Head of Sustainability, Debbie Whitaker said during an interview.
“So when it comes to Standard Chartered it’s about banking in a responsible way,” she said, adding that as a result of their sustainability policies, Standard Chartered has “weathered this storm better than most.”
The bank, which has been in business since the 1850s, has less exposure to the sub-prime markets which affected many other financial institutions.
Whitaker says that their experience as well as their conservative business model helped in preventing them from becoming a victim of the financial collapse seen in other banks.
Around 90 percent of Standard Chartered's revenue comes from Asia and the Middle East, regions which have been more insulated from the economic downturn, Whitaker says, adding that “although those regions are not completely insulated, their growth patterns are strong.”
Whitaker says that the global recession may distract many from solving environmental and social issues which she says “have the potential of creating greater long term instability, political instability and social instability than the current crisis if they are not addressed today.”
Coypyright Dongying Wang
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