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The London Summit

The London Summit of the G-20 nations has concluded with a note of optimism. Despite gloomy forecasts and open differences of opinion between US-UK on one hand and France - Germany on the other, the Summit was able to produce a consensus document.

US President Barack Obama called it a “turning point” in the pursuit of global economic recovery.” French President Nicolas Sarkozy said the results of the Summit were “beyond what we could have imagined.” German Chancellor Angela Markel described the agreement as an “historic compromise.”

The credit for this “historic compromise” should go to the affable US President for bridging the gap between the diverse standpoints of the interlocutors. It was his tact and diplomacy, his individual meetings with those who differed that produced the consensus.

The “historic compromise” included agreements to treble resources available to the IMF to $ 750 billion, to support a new SDR allocation of $ 250 billion, to support at least $ 100 billion of additional lending by the MDBs, to ensure $ 250 billion of support for trade finance and to use the additional resources from agreed IMF gold sales for concessional finance for poor countries, to constitute an additional $ 1.1 trillion program of support to restore credit, growth and jobs in the world economy.

Recognizing major failures in the financial sector and in financial regulation and supervision as a fundamental cause of the crisis the G-20 leaders agreed to strengthen the domestic regulatory systems and to create a new Financial Stability Board (FSB) to provide early warning of macroeconomic and financial risks and the actions to be taken.

They also decided to regulate hedge funds for the first time and extend regulatory oversight and registration to Credit Rating Agencies to ensure they meet the international code of good practice, particularly to prevent unacceptable conflicts of interest.

The G-20 also ledged to modernize and reform the international financial institutions to give more weight to developing nations. They also pledged to develop the Doha Round of negotiations. There was also a pledge to reach agreement at the UN Climate Change Conference in Copenhagen in December 2009.

Sri Lanka would welcome the Summit for it strengthened the IMF, to which we could go for redress in a crisis. The new SDR allocation of $ 250 billion would also come in handy for developing countries such as ours as to stimulate their economies.

For the IMF itself the G-20 agreement would give a new breath of life as many nations were shying away, having lost confidence in it. However, if the additional funding to the IMF is to become a boon for the developing world, the leadership of the IMF needs to be changed drastically.

The United States holds almost 17 percent of the votes in its governing body and for important decisions an 85 percent majority is necessary. In actual fact, this gives the US a veto power in the IMF. The same is true of the World Bank too.

As the ILO has commented the larger issues of unemployment and loss of jobs have not received the required attention of the Summit. Nor has it been able to define the nature and tasks of the proposed Financial Stability Board (FBS).

Though the G - 20 outcome is better than expected, it falls far short of the expectations of billions of people in the Third World. The question of a New World Economic Order is as distant as it was earlier.

In fact, the entire African Continent was not represented except for South Africa. As the United Nations panel of experts headed by Nobel Laureate for Economics Joseph Stiglitz has noted G-20 is not a sufficiently representative forum to re-fix the global economy.

The developing world, no doubt would be pursuing their own prescriptions and experiments to get out of the quagmire they have fallen into as a result of the folly of the developed world.

It was not so long ago that the Association of South East Asian Nations decided to group with China, Japan and Korea to form an Asian Monetary Fund. In Latin America the Bank of the South was established to function as a regional monetary fund.

At best the Summit has only a limited but positive strategy to generate economic resurgence in the developed countries; any positive effect on the developing world is only indirect. Even there it is to be seen whether the G-20 could get the ailing banks out of the crisis and whether it could halt mass layouts of workers and prevent industry closures.
 

LTTE is immune to international pressure

Most issues that bother or worry Tamils 30 years ago have now become irrelevant. Security, law and order have become the main issues. The people of North are ready for a political change. If you go near a Jaffna person, he will tell you they don’t want the LTTE anywhere near them.

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A noble son of Sri Lanka:

Jeyaraj Fernandopulle

A bomb exploded on April 6, 2008 at Weliweriya in the Gampaha District, creating a gaping hole in the ground, and left a great void in my life. I also believe that a painful trauma still lingers in the hearts and minds of all Sri Lankans. There is a saying that all heartache fade with the passage of time. But the qualities of this incredible personality is etched deep within me, to such an extent, that many memories I have of this great national leader will never be erased from my mind.

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Broadening the vision of human rights

The principles voiced in the Declaration have since been codified in the form of various international human rights instruments and have further been enshrined in the Constitutions of many countries. The Declaration stands as a powerful beacon in humanity’s struggle for human rights.

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