G20 - A placebo for the thin cows

At the same time I am writing down this therapeutic outburst of pessimism, the world leaders are working hard, trying to come up with an illusion to prevent the billions of dollars they have invested in rescuing the financial system, from being devoured by a panic streak in the volatile stock markets.

As a result of the global financial crisis, the G20 scheduled an emergency summit in Washington D.C. on Saturday, November 15, 2008. The goal of this meeting is to find possible solutions to the present economic debacle and its upcoming consequences.
For all of us who –like George W. Bush (according to certain rumors)- don’t know what the G20 is, here is a brief description:
The G-20 is an informal forum created with the intention of promoting open discussion about key issues related to the global economy between industrial and emerging-market countries. It was formed in 1999 as a result of the late nineties financial crisis, as well as a response to the growing influence that countries outside the G7 started to have on the world’s economy. The group is constituted by 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America, together with the European Union.  

The images shown along with this article were taken during the G20 summit that took place in Melbourne on November 17, 2006, and portray a general feeling of discontent amongst the thousands who gathered in an anti-globalization protest, which ended up in riots and with over thirty people being arrested nationwide.
This happened in a moment of global opulence, when the economic bubble was reaching its widest, prior to its inevitable burst. A period of fat cows, as we commonly say in Colombia.

The terms fat and thin cows to describe abundance and scarceness come from a biblical reference. The story of Joseph and his brothers (Genesis 37-47), which tells of the youngest of a group of twelve sons, who was sold by his brothers and, due to his ability to interpret dreams, grew up to become the main advisor of the Pharaoh of Egypt. One day, Joseph was asked to interpret one of the Pharaoh’s dreams, in which he saw seven fat cows being devoured by seven skinny cows. His interpretation was that, immediately ahead came seven years of abundance, which were going to be followed by seven years of famine. Because of this, the Pharaoh ordered to harvest food during the years of abundance and in that way, the kingdom of Egypt not only survived the years of famine, but also saved others (including Joseph’s brothers’ tribe) from starvation.
Unlike the Egyptian ruler, the modern-day pharaohs failed to listen to sound advisors like Nobel Prize winners Joseph Stiglitz and Paul Krugman and instead followed blindly the neo-liberal preaching of mister Alan Greenspan. As a result, we found ourselves at the beginning of the biggest economic crisis since 1929.   

On July 1944, when the Allied victory on WWII had become evident, 730 delegates from 44 Allied nations attended a conference in Bretton Woods (New Hampshire, US), with the objective of preventing the repetition of another economic crisis like the one of the 1930s. In this conference, the current international monetary system was established and institutions like the World Bank and the International Monetary Fund were created. An article by Mark Landler titled Nations to Talk Finance, as Pillars of Power Shift, published in the New York Times on November 13, 2008, stated that the G20 weekend’s summit was going to clarify how the crisis is reshaping the economic map  “rendering obsolete the old club of Western powers that fashioned the financial pillars of the post-World War II era.”

On that same day, president Bush assured that the current financial crisis didn’t mean the end of capitalism, nor of the American-style economic system of free market and free trade. As a result of this statement, the global stock markets experienced a general rise on Friday the 14th.
A peculiarity of the global economic system is that it cyclically shifts from periods of growth -or booms- to periods of recession. For centuries, we have been taught to believe that these cycles are as natural as the dry and wet seasons on the Nile’s delta. According to Paul Krugman, the last recession in the late nineties occurred when the technology bubble burst, but it was quickly contained and the economy recovered after Alan Greenspan managed to replace the technology bubble with the real-state bubble.

Now that the real-state bubble have burst, a question rises: is the G20 summit intended to find a real solution to the world’s economic problems, or are they just trying to come up with the next bubble? Probably neither of both, as the meeting is being host by an outgoing president -who is leaving power with the lowest index of popularity in over a century- and the newly elected one is not assisting.        

During the years of “prosperity” that welcomed the XXI century, the world did not only had to endure the so-called “war on terror” and its consequent wars in Iraq and Afghanistan (which have caused hundreds of thousands of civilian deaths), but also, many countries have suffered from hunger as a result of the increase on food prices. The main cause for this alimentary crisis is the rise of oil prices, which led governments to endorse the growth of certain basic agricultural goods –mainly cereals- to produce fuel. Because of this, the prices of cereals have more than doubled since 2004, while many other commodities have shown a significant increase in their value. Many economist attribute the economic boom of the turn of the millennium to two main causes: the afore mentioned real-state bubble and the increase on the oil price, which came after the attacks on the Pentagon and the World Trade Center on September 11, 2001.
So, if the food crisis in the third world happened not only despite of the global financial boom, but was actually originated by one of the main reason that made the economy grow, then, what can the poor countries expect from the international community now that the thin cows are coming?

The countries that constitute the G20 represent 90% of the world’s GDP, 80% of the world’s commerce and hold two thirds of the planet’s population. Meanwhile, the remaining third, living in that euphemism that we like to call “developing countries”, remains unrepresented. What difference does it make for a starving child in Haiti or a hungry mother in Niger or East Timor, the fact that the governments of Brazil, South Africa and Indonesia are going to have a bigger influence in the constitution of the new economic system?

After November 4, the planet entered a stage of static optimism. But beyond the great symbolic gesture that is to have an African descendant as the leader of the world’s major power, does this really mean that the world is going to change? Can Obama rearrange the current global order? Furthermore, is he willing to do so? For the conquered territories outside the Italic Peninsula, Rome was always Rome, regardless of whether it was being ruled by Caligula or Marcus Aurelius.
The governments of the richest countries of the world have spent over 2.000 billion dollars to save the financial system from crumbling. Compared to this figure, the 76 billion euros destined to aid the poor countries (which include the budget of the World Health Organization, the World Food Program and the United Nation Development Program) look like petty cash.
The year 2009 is meant to be the beginning of, yet another, New World Order. Not only because of the fact that the White House will be hosting its first black resident, but because -on the twentieth anniversary of the fall of the Berlin Wall- Francis Fukuyama’s fallacy of the End of History will be a theory impossible to defend, even for the staunchest of neo-liberalists.
War, poverty and inequality were the main problems suffered by humanity during the industrial era, and now, at the beginning of this so-called era of information, they are not only still our every-day news, but now we must add to them new generation problems like climate change and over-population.

In the middle of the outbreak of the financial crisis, China managed to accomplish its first space walk, while India launched its first mission to the moon. A new space race (like the one experienced during the cold war) has apparently started. According to the most optimistic analysts, there will be a man (or a woman) on Mars’ surface by the year 2030. Meanwhile, the UN Millennium Goal of reducing the population that live in extreme poverty by half, each day seems more like a science fiction story.   

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