Is the G20 likely to be more successful than the G8 was?
The G8(The United States, Britain, France, Germany, Japan, Italy, Canada, and Russia) has been expanded to include 12 more Countries, changes highlighting the expanse are moreover, a move towards co-dependence, group influence,less power/rights for individual Countries and more equanimity/tolerance /communication.
Presently the old club(G8) and G20 countries both have conferences. G20 gained prominence in November 2008 during President George Bush.Jr's term. The Obama administration is for the change, but fears the congregation of a G27 soon.
Will the intended improvements on the G8 be realised? Will the new prominence of the G20 result in financial matters getting better or worse?
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success: Lead on dealling with the finacial crisis
The G20 is bringing the world out of financial turmoil by stressing on and implementing greater regulation,transparency and thus security.
Markets ideally regulate themselves but we do not live in an ideal economic financial world. Slumps and booms are all part of the business cycle. The amplitude of the slumps has reportedly decreased, which means we are on our way.
The crisis is not over, Britain faces greater unemployment than ever before. Other Countries aren't doing so well either.
Regulation is a means of prevention/repetition in the future and not a cure.
A better solution would have been to alter the balance of payments.
Problems with group coordination difference in legislation/law or regulation/rules
It is difficult enough to try and pass an idea to the entire government and public of a single nation but to congregate 20 nations and not be able to move ahead and accomplish anything without their approval is more than a handful.
"Higgins believes that the support for such a measure is waning – particularly from those countries such as the US and the UK where financial services contribute significantly to their economies.
"It feels good to complain about corporate bonuses," admits Professor David DeJong, who chairs the department of economics at the University of Pittsburgh, located in the heart of the former steel-town.
"But the reality is that it's very tough to dictate across boundaries; it's tough enough for a government to dictate within its own country."
Of course, one of the problems of the G20 is that in spite of a general consensus that something must be done, there are 20 sets of opinions on the best way forward."-[[http://www.telegraph.co.uk/finance/financetopics/g20-summit/6208888/Why-G20-is-likely-to-be-a-damp-squib.html]]
Individual countries have individual/unique/different problems and financial models and policies as such. Some Countries maybe cheaper but less safe vice versa is also possible. If the same costs of resources are applied to different Countries with significantly different situations, then Countries with weaker laws and regulation will be preferred by corporations since the other costs will become the same, hypothetically; Ceterus Paribus. Regulatory arbitrage is the when weaker regulation in a certain country makes it easier for Companies to work and produce there without paying an added price. Arbitrage is when there is an opportunity that pays up better than another opportunity with the same cost.
"To add to the problem, Wainwright points out that the G20 "from a legal point of view is a very odd organisation. It doesn't have any constitutional powers, it's just entirely based on the status of the people that turn up."
As a result, any outcomes will be entirely reliant on member countries carrying them out. "The only worthwhile action is going to be internationally
co-ordinated," Wainwright says. He fears a lack of concrete action could lead to regulatory arbitrage e_SEmD a situation where companies move to countries with lighter restrictions e_SEmD or protectionism."-[[http://www.telegraph.co.uk/finance/financetopics/g20-summit/6208888/Why-G20-is-likely-to-be-a-damp-squib.htm]]
Decisions that involve the world affect the world and if only a few make those decisions they become accountable to the entire globe. The G20 is more representative of the world as a whole and accountability for decisions is less concentrated.
This means the big 8 would be (at least) less blamed for the world's problems or presenting self-interested solutions that hurt or damage the developing world. The role of G8 Countries depicted in the Dependency theory has become less suspicious or pronounced with the new prominence of the G20.
More equality or lobbying?
A host of European Countries feel that the U.S has invited and brought many developing Countries into the no-longer-elite group, to undermine the European influence on decisions and strengthen it's own.It's questionable whether all the opinions on the table some from large powerful Countries and others from small emerging economies could/can possibly have the same leverage on the group's policies or decisions.
What do you think?