Stewardship of the global economy is in disarray due to a vacuum of leadership, senior economists have warned.
Nouriel Roubini, professor of economics at New York University, and Sir Martin Sorrell, chief executive of the media group WPP, lamented a lack of joined-up global leadership, describing co-ordinated efforts to address trade imbalances, capital flows, water resources, immigration and climate change as “G Zero”.
“There is complete disagreement and disarray. That’s the sense of the G Zero,” Mr Roubini said, explaining the new buzzword at the World Economic Forum’s annual conference in the Swiss resort of Davos.
“There is no agreement on anything. We are in a world where there is no leadership,” he added.
The G20 has had recent successes, striking a deal on bank capital requirements in South Korea last year and providing a forum for discussions on global imbalances.
However, much of the aspirational talk at the G20 meeting in Pittsburgh in 2009 has failed to turn into concrete actions.
The threat of protectionism still looms as the US and China struggle to adjust their economies, and other emerging markets have accused the US of launching a “currency war” to devalue their way to a more stable economy.
However, Laurence Parisot, head of France’s MEDEF business lobby, said that talk of a “G Zero” was tantamount to calling for “economic war”.
Good global leadership, Ms Parisot said, was needed to prevent protectionism and see off the far-right political forces making moves in that direction.
G20 personnel at Davos disputed the premise that they are achieving nothing and more measured voices than Mr Roubini said it was important to draw a “distinction between achieving agreement on everything and achieving agreement on anything”.
By Philip Aldrick, Economics Editor 7:14AM GMT 27 Jan 2011
Source: The Telegraph