I can't remember reading a document quite as meaningless as the G20 communiqué after Seoul. I knew we were in trouble the moment I saw they had come up with a catchy phrase "Seoul Action Plan" and then used the phrase "root causes" to describe some of the problems.
How very 20th century management speak. That so many grown men and women could come up with three pages of verbiage and declare it a success has stretched credulity to breaking point.
That is not to deny there are some very difficult issues to be resolved, most of all the intractable imbalances that exist between trading nations. The G20 talked time and again about them. But this is much more than a simple "the Americans import and the Chinese export too much."
These deficits and surpluses are merely manifestations of underlying economic strengths and weaknesses that have allowed the situation to arise in the first place. And now these problems have to be addressed before the pressure in the economic cooker gets too great and the whole thing becomes in danger of exploding again. The G20 didn't even make a start.
Asset bubbles
Fundamentally, the Chinese (and for that matter, the Germans) need to stop regarding the rest of the world as their sales market and start introducing policies that foster the domestic market in its own right. Similarly, the US (and for that matter add in a dose of other European countries) need to stop fostering policies that ultimately create asset bubbles which eventually explode.
But these are tectonic shifts in economic policies that won't happen overnight. They will involve economic thinking at the highest levels. Probably not since Bretton Woods in the 1940s which set up a series of fixed exchange rates based around gold have the world's economic thinkers come together to try and build a new way of doing things.
High stakes
There have been several feeble attempts to do this since Bretton but, frankly, they have never got very far; probably because the stakes were not so high.
Some will suggest that the stakes are not that high this time either. They would be wrong. While there is no continent sitting in rubble as Europe was post-1945, the economic landscape in large parts of the developed world does look like it's been hit by a nuclear bomb and that is just as significant in our globalised world.
Just before the G20, the President of the World Bank, Robert Zoellick, said that there would probably need to be such a meeting, at some point. His comments got lost in the fuss over his suggestion that gold should play a greater role in exchange rates. Oh well. He tried.
Tune in to CNN International each weekday at 2200 UAE time to catch Richard's show, Quest Means Business.
