THE BLOG
10/04/2009 11:07 am ET Updated May 25, 2011

A New Economic Architecture

The recent G20 summit in London that took place on April 2, 2009 set the pace of the financial reform that should change the structure of the economic and financial architecture that has been operating since the Bretton Woods summit of 1944. The third summit, to be held in New York City in September 2009, will help determine whether the stimulus packages agreed on in the first two summits boost the economy, leaving the fear of depression behind.

The big winner of the first two summits was the International Monetary Fund (the Fund hereafter). The Fund tripled its reserves. The big losers were the fiscal and tax havens. This is a victory and a loss for the alter-globalist movement, who would have expected and hoped for a more radical transformation of the Bretton Woods Institution. It is however not a bad beginning in the difficult financial times we are currently experiencing, times where the lack of creativity and leadership among our political elite is manifest.

A financial reform agreed on by 20 countries is better than a reform agreed on by seven or eight countries. It seems that the the global community matures, albeit at a slow pace. It seems that the West incorporates the representative power of certain emerging countries to the decision-making process that rules today's capitalism. We should not forget other pending issues that today remain far away from the radar of the leaders who met in London on April 2, 2009. Trade reform, investment in agriculture, demographic control, agreements to limit the small arms trade, or an increase and better allocation of development aid to deliver healthcare and education to the extreme poor, are all fundamental issues that will determine the future of humankind.

Considering only the financial reform is similar to adopting a myopic modus operandi. The aim of those of us who expect to live through 2050 is to be demanding with our political elite. We live times that will determine whether we transition from today's heartless capitalism to a loving capitalism that allows us to enter the new era of sustainability, leaving the pirates of heartless capitalism behind. The perpetuation of short-term investment and the lack of responsible investors along with ethical standards in our corporate policies will aggravate the already concerning environment of poverty, pollution and inequality we face as a society.

We are constantly looking at the performance of our stock markets to determine how well the economy is functioning. However we forget to observe other trends in education and healthcare in many Subsaharan African countries where the future of the planet inhabits. In a majority of countries of Subsaharan Africa almost half the population is under 18 years old. They are the future. It is important that they grow up healthy and educated, strong and prepared to face a challenging state of our evolution where capitalism must embrace the extreme poor.

The Washington and London summits were summits that maintained the pattern of capitalism. There was no evolution. There was no world evolution, no eworldution. There are solutions to today's problems that do not seek the destruction of the current world order. There are solutions that propose an alternative architecture, able to build a robust basis for a new capitalism.

We should not forget that the current crisis is not only economic or financial; it is also geo-political. With the lack of consensus in the European Union the relationship United States-China has deserved much focus and attention. The world has a long time ahead to transition from a superpower to a multilateral environment. As long as the European Union is not ready to move ahead with a common foreign policy, Europeans will continue to lack the leadership well needed when the United States' foreign policy is faulty, a United States that rules the world far away from the political stature of past times when Roosevelt or Truman inhabited the White House. Obama is more of a Roosevelt than a Truman in his beginning. We should not forget the word protectionism. The current crisis is a replica of the Great Depression. Paul Volcker may have to change his term Great Recession if we do not do the homework as a global society, a society on the verge of self destruction.

Find more about Jaime Pozuelo-Monfort at http://Monfort.ORG