Will the G20 become the L20? The ‘Leaders 20′ would be a regular meeting of not only Finance Ministers but Prime Ministers and Presidents who meet to discuss global problems including climate change? There is still a long way to go, but the Toronto Globe and Mail reports that the Nov. 15 emergency meeting on the global economy in Washington has been expanded beyond the G8 to include institutions such as the UN and many countries such as India and China.
At the 2005 summit at Gleneagles in Scotland, former Canadian Prime Minister Paul Martin recalls that ‘the emerging countries were invited to lunch, then dismissed’:
University of Toronto G8 Research Centre’s Director, John Kirton, quoted in the same article. HE comments that Bush has ‘basically admitted that the G8 could not do the job.’
The President of the United States comes over to a meeting of finance ministers chaired by a Brazilian and says, ‘I need your help.; You see a very important structural shift.
For the U.S. to suddenly realize that in fact the major emerging economies have to be at the table is a major, major step forard… You cannot say that the Chinese are a major part of the solution but, by the way, when we sit down to discuss these things, you won’t be there.
As Ed Yardeni, a market strategist explains in the article:
If Abu Dhabi or Shanghai sets up a financial centre that allows everybody to skirt these regulations, we’ll still have all these excesses.
That these centres, which are not at the epicentre of global capital and information flows, to be understood as having the potential for independent action, indicates the sort of shift in perceptions that adds up to a new understanding amongst financial elites of the globally inter-knit nature of economies, and the networked, rather than simply hierarchical possibility of agency. No one is able to insist that the financial world is solely the White House and a few New York and London trading floors. Whether or not this world network of many centres is able to consolidate its status, a tectonic shift has taken place in the spatialization of world finance. It is not surprising that Canadian Broadcasting Corporation (CBC) resorts to an interactive map to present the recent turmoil in financial markets.
A networked topology to global finance has long been a reality, as suggested in the diagram above of relationships between financial centres (each city is abbreviated as a pair of letters) from Peter Taylor’s book World City Network but it was governed hierarchically from a very few dominant centres, as if from the top of a pyramid. This centre-periphery topology reinforced the power of the dominant centres and States. However a more egalitarian network form would raise the importance of multilateral, transnational institutions capable of coordinating flows across the network, for example to mitigate the transmission of shocks or panics across the net. Where some have argued that States have returned with a vengeance as major global actors, this vision suggests that these States will have to work together, muting their power and independence.
- Rob