G20 leaders divided on how to combat global recession

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From Fazle Rashid
NEW YORK, April 01: It would require no pundit to say that the G20 summit will yield no concrete result. Leaders are sharply divided on as how to combat the gale now raging fiercely in the financial markets around the globe. The hope and optimism raised by the global leaders have evaporated. France has sounded early warning saying it would walk out of the G20 summit beginning tomorrow if other nations did not agree to set up a robust international financial regulatory agency, New York Times (NYT) reported today. Economic integration, stricter regulations and halting protectionism will be the core points of discussion in the summit.
President Obama wants Europe to come up with more stimulus packages. Angela Merkel is opposed to the idea saying deficit financing would create an unsustainable recovery. Taro Aso, prime minister of Japan does not agree with German chancellor and reminded leaders that Japan's fiscal stimulus policies "played a critical role in restoring growth after country's assets price bubble in early 90s".
Indian Prime Minister Manmohon Singh voiced alarm against protectionism stating that large scale withdrawal of capital resources from developing countries by big banks is compounding an already worsening situation.
Leaders of the G20 will pledge to promote trade as a crucial driver of economic growth, to avoid protectionist measures and to strive for a rapid completion of the Doha round of trade negotiations. G20 leaders had earlier pledged not to raise trade barriers but that pledge has been widely flouted.
Many in Europe and Asia who depend heavily on the United States favour. President Obama's spending hoping an American rebound will revive their economies, NYT said. The G20 leaders will agree at least on two points.
There will be broad agreement on the need to regulate hedge fund and to force countries known as tax haven to meet some global standard.
Meanwhile, the shops on London's financial district have brought down their shutters as thousands of protesters are converging in the region who will march on to Bank of England, Britain's central bank. Demonstrators who blame London's bankers for the global financial crisis say they are planning to " reclaim the city".
Inter-American Development Bank (IADB) warned that the growth rate in Argentina, Brazil, Chile, Columbia, Mexico, Peru and Venezuela would drop to 0.1 per cent from an average of 5.8 per cent. The G20 leaders have been warned that job losses would be in the neighbourhood of 80 million by the end of 2010. The warnings have been sounded by ILO and Organisation of Economic Cooperation and Development. The World Bank has warned that remittance would drop by 8.0 per cent.
On the political front, there have been some major developments. There was in many years a one-to-one meeting between America and Iran. The meeting between Richard Halbrooke US special envoy to Pakistan-Afghanistan and Iran Deputy Foreign Mehdi Akhondzadeh was described as cordial and both agreed to stay in touch, NYT quoted Hillary Clinton as saying.
In another development, US and Russia are close to an agreement to slash by about a third their stock of nuclear arsenal. It could lead to wider reductions.
Leading US business groups and lawmakers from both parties rallied behind an effort to scrap all restrictions on travel to Cuba. Iran and Cuba both were in the " axis evils " during Bush presidency.