As world leaders gathered in London for the G20 summit, protesters took to the streets. At a branch of the Royal Branch of Scotland windows were smashed, there were a number of violent clashes with police and one protester died. It was unclear how the man died, but some people had earlier been injured when thousands of protesters held inside a police cordon for several hours following the march surged against the barriers, AFP reported. "Earlier in the day, 11 people were arrested after being stopped in an armoured personnel carrier in the financial district. The vehicle, which looked like those commonly seen on the streets of Baghdad or Basra, was painted blue with the word 'Riot' stenciled on the front," The Washington Post said. "News photos showed at least one of the men arrested wearing a riot police officer's helmet. It was not immediately clear how such a vehicle managed to drive into central London on a day when security levels are unprecedented. "While some protesters were focused on the global economic crisis, others in the city were concerned with the war in Iraq, the Israeli-Palestinian conflict and other causes." Mindful that bankers have become the focus of widespread public anger, a number of the world leaders gathered for the economic summit recognised that its outcome must to some degree mollify that rage. To that end an agreement is expected that will impose unprecedented global restrictions on pay and bonuses for bankers. "In future, bankers will be prevented from receiving multi-million pound cash bonuses for speculating on the stock market," The Daily Telegraph reported. "Their remuneration will instead be based on the risks they take over the long term. Bankers deemed to be making risky investment decisions will only be paid in shares that can be cashed in after several years. "The multi-million-pound bonuses paid to bankers have been blamed for encouraging them to take the 'reckless' decisions that triggered the global financial crisis. "The Daily Telegraph has learnt that the remuneration deal was thrashed out over the past few days following intensive diplomatic efforts by Nicolas Sarkozy, the French President, and Angela Merkel, the German Chancellor. The measure did not appear in a draft communique that was leaked at the weekend." In The Wall Street Journal, Marco Annunziata wrote: "This is a crisis born of a collapse in confidence, triggered by a lack of information and transparency in the financial sector and by the initial fumbling policy reaction. Restoring confidence remains essential, and isolated interviews and TV appearances by policy makers will not suffice. We need a change of pace in global leadership commensurate with the unprecedented depth and complexity of the crisis - now. "Unfortunately, the leaked G20 draft communique is not reassuring. So far, the only concrete result likely to emerge from the summit is the already mooted doubling of the International Monetary Fund's resources to $500 billion. This is an important step forward that would provide the IMF with the firepower it needs to promptly contain further crises in emerging and developed markets. It may also act as a prelude to a rebalancing of voting powers within international financial institutions." The New York Times said: "Barely six months ago, the International Monetary Fund emerged from years of declining relevance, hurriedly cobbling together emergency loans for countries from Iceland to Pakistan, as the first wave of the financial crisis hit. "Now, with world leaders gathering this week in London to plot a response to the gravest global economic downturn since World War II, the fund is becoming a chip in a contest to reshape the postcrisis landscape. "The Obama administration has made fortifying the IMF one of its primary goals for the meeting of the Group of 20, which includes leading industrial and developing countries and the European Union. But China, India and other rising powers seem to believe that the made-in-America crisis has curtailed the ability of the United States to set the agenda. They view the Western-dominated fund as a place to begin staking their claim to a greater voice in global economic affairs." George Soros wrote: "Institutions such as the International Monetary Fund face a novel task: to protect the periphery countries from a storm created in the developed world. Global institutions are used to dealing with governments; now they must deal with the collapse of the private sector. If they fail to do so, the periphery economies will suffer even more than those at the centre, because they are poorer and more dependent on commodities than the developed world. They also face $1,440bn (?1,060bn, £994bn) of bank loans coming due in 2009. These loans cannot be rolled over without international aid. "Gordon Brown, the UK prime minister, recognised the problem and designated the G20 meeting to address it. Yet profound attitudinal differences have surfaced, particularly between the US and Germany. The US has recognised that the collapse of credit in the private sector can be reversed only by using the credit of the state to the full. Germany, traumatised by the memory of hyperinflation in the 1920s, is reluctant to sow the seeds of future inflation by incurring too much debt. Both positions are firmly held. The controversy threatens to disrupt the meeting. "Yet it should be possible to find common ground. Instead of setting a universal target of 2 per cent of gross domestic product for stimulus packages, it is enough to agree that the periphery countries need aid to protect their financial systems. This is in the common interest. If the periphery economies are allowed to collapse, the developed countries will also be hurt." In a letter addressed to the British Prime Minister Gordon Brown on the eve of the summit, Pope Benedict XVI wrote: "The London summit, just like the one in Washington in 2008, for practical and pressing reasons is limited to the convocation of those states who represent 90 per cent of the world's gross production and 80 per cent of world trade. In this framework, sub-Saharan Africa is represented by just one state and some regional organisations. This situation must prompt a profound reflection among the summit participants, since those whose voice has least force in the political scene are precisely the ones who suffer most from the harmful effects of a crisis for which they do not bear responsibility. Furthermore, in the long run, it is they who have the most potential to contribute to the progress of everyone. "It is necessary, therefore, to turn to the multilateral mechanisms and structures which form part of the United Nations and its associated organisations, in order to hear the voices of all countries and to ensure that measures and steps taken at G20 meetings are supported by all. "At the same time, I would like to note a further reason for the need for reflection at the summit. Financial crises are triggered when - partially due to the decline of correct ethical conduct - those working in the economic sector lose trust in its modes of operating and in its financial systems. Nevertheless, finance, commerce and production systems are contingent human creations which, if they become objects of blind faith, bear within themselves the roots of their own downfall. The only true and solid foundation is faith in the human person. For this reason all the measures proposed to rein in this crisis must seek, ultimately, to offer security to families and stability to workers and, through appropriate regulations and controls, to restore ethics to the financial world."
pwoodward@thenational.ae
