HispanicBusiness

Nothing like a crisis to shake complacency, dissolve illusions, and bridle ambitions. The worst contemporary financial crisis -- perhaps the worst contemporary, worldwide recession -- has kicked open the door of the exclusive club of industrialized economies, known as the Group of Seven, which met regularly to examine and decide the future of the world economy.

Over the weekend, in Washington, D.C., the members of the G7 were joined by other leaders from the so-called emerging market economies to discuss the state of financial markets and the future of the world economy.

The sense of urgency caused by volatile markets, falling growth rates and numerous humbled financial titans led to the genesis of the Group of Twenty, or G20, summit, despite the unpropitious background offered by the ongoing political transition in Washington. Even so, credit should be given to the G20 for setting off a process, aimed at avoiding a deeper worldwide recession and the reform of the international financial system. Joining arms, if you will, to see if they can push up the economy.

The G20 Summit approved a plan of action, containing both short- and medium-term measures to implement a set of approved principles of reform, to strengthen transparency and accountability, to enhance regulatory regimes, prudential oversight, risk management and to promote integrity in financial markets. Additionally, the summit decided to reinforce international cooperation and to reform international financial institutions. The declaration also includes a commitment to maintain an open global economy, rejecting protectionism, refraining during the next year from erecting new barriers to trade and investment and to conclude successfully, this year, the Doha Round of trade liberalization.

The Ministers of Finance were instructed to monitor the execution of the action plan and to present additional recommendations to the next summit, to be held next April 30, 2009.

We'll see then if those arms are holding up.


Isaac Cohen is the former director of the Washington Office of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). He is a commentator on economic and financial issues for CNN en Español TV and radio.