Rambling thoughts on the world economy following G20 summit in London

The way out of the current recession is to regulate the banks and the markets without fettering free trade movement. Printing more money without regulating the markets will simply result in two digit inflation which will cause further economic problems and deficits. Consumption can be enhanced when people feel financially secure. Without financial security, consumers will continue to tighten their belts.

G20 must find tangible mechanisms to put the world economy on the right track for both producers and consumers to feel confident and to keep the economic wheel rolling at reasonable speed. The current crisis has primarily been caused by unrefrained investment and consumption based on speculation which has made the economic wheel come to a relative halt after the unexpected crush.

Rich countries still have the means to redress the current economic downturn, not without sacrificing millions of jobs as it is unlikely that all can be fixed with the strike of a magic wand.

In this dire economic crisis, despite the outward concern for the global economy, each country will have the motto of “charity begins at home.”
Poor countries are likely to suffer most as their economies are mainly based on exporting raw materials and international aid.

It’s hopeful that the world leaders at G20 can come up with a new Marshal Plan that can save all the countries, poor and rich.

G20 will have no meaning if it is going to be remembered just as a moment of outspoken rallies by those disenchanted with the failures of capitalism and reassurances by politicians without tangible results that can put the world economy on the right track.

Third world countries as a whole have failed to create economic functional blocs, with few exceptions like ASEAN. Third world countries are just dreaming of becoming economic blocs as they have just names. One example is the Arab Maghreb Union whose purpose since its creation in 1989 was to create economic integration between North African countries ( Morocco, Mauritania, Algeria, Tunisia and Libya). So far there is little economic exchange between these countries compared to their potentials and complementaries and geographic proximity.
Not to mention the dream of the United States of Africa.

In short poor countries should work out the means to integrate their economies and to consider their economic exchanges with rich countries as one of their priorities and THE priority.

The current economic mess was fundamentally created by Western financial institutions and the apparent total disengagement of Western governments until it was too late. It seems the rest of the world has to pay with them, especially oil producing countries, like Iran and Venezuela, which now have to reshuffle their domestic economic plans.

But the fundamental question is, ” What can G20 do to help when corrupt leaders in third world countries simply squander the wealth assets of their countries to enrich themselves by impoverishing their already impoverished peoples?”

Maybe rich countries can make things better in the long run. But countries suffering from corrupt leadership still need to clean their houses for general prosperity.

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