Global Economic Crisis

The global financial and economic crisis has had a devastating impact on the world economy, including those of the developed countries. The impact was considerably mitigated because major economic powers put in operation rescue packages of unprecedented dimensions and adopted a set of co-ordinated measures. The preferred institution and the forum for this purpose were the IMF and G-20 respectively. The recognition of G-20 as the principal forum for international economic co-operation is only the institutionalisation of the radical change that has taken place in the global economic power structure. In their three conferences at the summit level within a space or less than a year, the G-20 took measures for making substantial resources available to help developing countries to cope with the crisis, for regulating financial markets and for strengthening the IMF. G-20 decisions helped in restoring confidence, maintaining the momentum of rescue measures and restraining contingent trade protection. But most of the fundamental problems besetting the international financial system have been left intact or only tinkered with. The right forum for bringing about changes of a fundamental nature in the international financial system, and for coordination of macro-economic policies of member governments which can serve the widest possible interest, is the United Nations. This is in fact mandated in the UN Charter.