Why not a G195 to avoid such crisis?

In 1976, Canada, France, Germany, Italy, Japan, the UK and the USA - the so-called rich-countries around the world formed the G7, whose meetings were meant to tackle global economic concerns. Over the years, a certain evolution occurred, whereby finance ministers gradually ceded a good deal of their platforms to heads of states, several of whom turned to these gatherings to address international political disputes.

At the 1994 Naples Summit, Russian officials held separate meetings with G7 leaders before Moscow was formally invited to join the group in 1997, which was transformed into the G8. More recently (1999), leaders of the world's 20 largest economies composed the G20, which in fact has 19 members (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK and the US), with an additional seat reserved for the European Union [EU] that is represented by the rotating Council presidency and the European Central Bank. This last membership should give an idea of who enjoys real economic power.

All of these well-meaning principals thrashed various proposals last weekend in Washington, ostensibly to prevent future financial upheavals, but one could not help and wonder why developing countries were called to address the developed world's financial crises.

Of course, in a globalised economy, it may be better to adopt steps that would stop and reverse the looming global recession. Still, by streamlining banking regulations that do not exacerbate the cycle of boom and bust, G20 leaders are faced with a conundrum: how to restore confidence without turning the system upside down.

For in the end, that is precisely what might be necessary, since protecting "a certain way of life" at the expense of billions who wallow in poverty, will no longer work.

This assessment may be severe but essentially what most citizens wish from their leaders is to maintain peace with as few wars as possible. As a corollary, they also hope that any financial damage that is inflicted on hard-working individuals is minimised. They want larceny to be limited, or standardised as necessary, to protect genuine productivity and the creation of wealth. They also wish for fairness in the system or at least a level playing field. Instead, what many witness are enormous disparities, which are unconscionable.

How could regulators tolerate, for example, that Richard Fuld, a longtime chief executive of Lehman Brothers was paid $17,000 an hour while the minimum wage approved by the American federal government stood at $6.55? How could Lehman Brothers stockholders stomach that Fuld "earned" such sums when he successfully obliterated one of the most established investment firms on Wall Street? Frankly, how can several G20 leaders from the developing world accept huge inequalities, when wages are at rock bottom in their own nations?

Blaming past failures

Naturally, one can blame past failures to scrutinise excesses that brought us to the brink of global financial meltdown, but beyond refurbishing overseer systems, as suggested by Brazil, India and Saudi Arabia, the time has come to enlarge the G20. In fact, a G195 gathering, which would include the 192 United Nations members as well as non-UN affiliated Kosovo, Taiwan and the Vatican, should tackle global challenges in unison.

Forget the actual congregation, which would be a security nightmare, as well as a meaningless jamboree held at luxury hotels over obscene banquets while ordinary people starve in slums. Let's overlook lofty speeches that will express good intentions while every nation pursues separate and narrow interests. The time has actually come to create a "virtual" global assembly over the internet, where transparency is practiced and where every country can offer specific ideas to improve standards of living.

Although it may be easier for a few countries to bolster their national economies, reforms must focus on global structures, rather than just throwing cash at the problem if needy developing populations are to survive. The world is witnessing a global shift away from traditional Western economic domination to include emerging powerhouses like China, India and Brazil. Why not be inclusive to construct sorely needed infrastructure and service projects, ranging from sanitation to power generation, in as many places as possible, which will gainfully employ billions and reduce universal poverty?

Laissez-faire capitalism has run its course and can no longer survive when destitution and wars prevail. As dictators are toppled, so must the "dictatorship of markets," which enslaves many both in the developing as well as the developed world. Gradually, middle class workers are losing their material wealth, while avarice is worshipped as a deity among the privileged few.

Ironically, a few days before the G20 meeting, many leaders met at the Saudi-initiated interfaith dialogue at UN headquarters, to discuss principles of tolerance and moderation. In New York, Saudi Arabia's King Abdullah hoped that a common ground of understanding among believers of monotheistic religions and followers of other cultures and civilisations is found, so that peace, justice and security are ensured. It may have been useful to link those goals with a gradual abandon of greedy pursuits.

Dr Joseph A. Kechichian is a commentator and author of several books on Gulf affairs.