Leaders Seek Global Response to Financial Crisis
Seizing on the U.S.'s widening financial crisis, leaders from developing and industrialized nations called here for a response that reshapes the architecture governing global finance and trade.
Attacks on American-style capitalism at the annual United Nations General Assembly meeting illustrated how the U.S.'s financial woes are emboldening a range of nations to question the American economic model that has largely dominated the debate on development since the end of World War II.
The fallout from the U.S. crisis, many leaders here said, could be a global shift away from Washington's traditional calls for freer financial markets and global trade. The debate could underpin the mantra of many emerging economic powers, such as China and Russia, who advocate a more state-directed and interventionist brand of capitalism.
French President Nicolas Sarkozy emerged as among the most aggressive of the world leaders at the U.N. calling for greater oversight of the world's financial markets.
The French president, widely viewed as a conservative on economic matters, said the international community must study the roots of the U.S. financial crisis that is the worst 'the world has experienced since that of the 1930s.'
'Let us rebuild together a regulated capitalism in which whole swathes of financial activity are not left to the sole judgment of market operators,' Mr. Sarkozy said. He called for more oversight of international banks and credit agencies so that the 'transparency of transactions replaces opacity.'
Mr. Sarkozy has yet to make good on his 2007 election pledge to revive France's ailing economy -- a goal he aimed to meet with market-oriented economic policies. Mr. Sarkozy has made some headway with unions, recently chipping away at the sacrosanct 35-hour workweek.
At the U.N., Brazilian President Luiz Inácio Lula da Silva said the current global financial crisis was fueled by the 'boundless greed' of speculators and bankers whose mistakes were being 'borne by the masses.' In response, he said the global community must create a 'new foundation' for the world economic system to prevent future abuses and to ensure greater equality between rich and poor.
A former labor leader, Mr. da Silva has recast himself in the presidency as an advocate of a middle way between capitalism and socialism. On policy, he has walked a tightrope between practicing orthodox economic policy and funding populist social programs. While the country's central bank has been hawkish in fighting inflation, Brazilian officials tend to blame market 'speculators' for shifts in local financial markets.
Iranian president Mahmoud Ahmadinejad told global leaders that the U.S. financial crisis, coupled with the wars in Iraq and Afghanistan, signaled that the American empire is 'reaching the end of its road.'
While few of the U.N. leaders offered specific remedies for the financial crisis, they said it signaled a geopolitical power shift away from the U.S. and other Western powers in favor of developing nations. As a result, they said, the U.N. Security Council should be expanded to include countries like India and Brazil, while the G-8 forum for leading nations should grow to be the G-14.
JAY SOLOMON |
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