G20: The two sides of the global economy

The biggest challenge facing the rich countries in Pittsburgh will be the world's poor.

By Thomas Mucha
Published: September 23, 2009 05:51 ET
Updated: September 23, 2009 18:26 ET

BOSTON — As G20 leaders snake their way to Pittsburgh from all corners, they face very different circumstances from 12 months ago when the possibility of financial and economic catastrophe was all too real.

It's still ugly out there, of course, as millions of unemployed workers would glumly attest — from Britain to Canada, to Russia, South Africa and beyond.

But it is getting better.

America's $14 trillion economy is "very likely out of recession," according to U.S. Federal Reserve Chairman Ben Bernanke. Europe's two biggest economies — Germany and France — are growing again. Emerging powers China and India have resumed their rapid rises, while South America's economic giant Brazil has escaped the crisis, too.

So as G20 leaders haggle over the topics at hand in Pittsburgh — weighing additional stimulus measures, improving oversight of the global financial system, addressing the excesses of executive pay, boosting international trade, slowing global climate change — the economic landscape has, thankfully, changed for the better.

But don't be fooled by the return of relative calm to the G20 bloc. There will be blood. A meltdown of this magnitude claims many victims.

The question now is who will suffer the most from a crisis that swept from the casino canyons of Wall Street, to the smoke-choked factories of Guangdong, to the snowy peaks of the Andes. And, more importantly, what can be done about it? We heard one troubling hint last week from World Bank president Robert Zoellick: the poor. The World Bank predicts an additional 89 million people will be thrown into extreme poverty by the end of next year, defined as those subsisting on less than $1.25 a day. “The poor and most vulnerable are at greatest risk from economic shocks —  families are pushed into poverty, health conditions deteriorate, school attendance declines and progress in other critical areas is stalled or reversed," Zoelick said upon release of the Sept. 16 report, which focused on the world's 43 poorest nations.

So why does this matter, you ask?

While low-income countries contribute less in terms of output than G20 nations, they play an increasingly important role in the global economy. And most have been severely damaged by the darkness of the past 12 months, as GlobalPost coverage of the meltdown has consistently shown.

Comments:

No Comments.

Login or Register to post comments

Recent on Commerce:

Teacher in a box: Outsourcing homework to India

Saritha Rai - India - November 20, 2009 16:28 ET

Need help with that term paper, young American? Meet Saswati Patnaik.

Back to the Azores: a brand-new world

Ken Shulman - Europe - November 20, 2009 10:25 ET

The reverse flow of migration to this small chain of Portuguese islands is a modern marvel.

Cuba tries to keep the lights on

Nick Miroff - Cuba - November 20, 2009 06:55 ET

Cuba gets plenty of oil from Venezuela. So why is it adopting "extreme measures" to avoid blackouts?

How can 39 million buffalo be wrong?

Jason Overdorf - India - November 19, 2009 06:30 ET

Indian farmers discover the beauty of mozzarella.

Analysis: Obama in China: It's about the money

Kathleen E. McLaughlin - China and its neighbors - November 18, 2009 10:57 ET

How, and why, Obama is treating the dragon differently.

Silicon Sweatshops: A promising model

Jonathan Adams and Kathleen E. McLaughlin - China and its neighbors - November 18, 2009 06:54 ET

There's no easy way to police supply chains in Asia. But one US high-tech firm and its Taiwan supplier are taking a creative approach that might just work.

Special report: Silicon Sweatshops

Jonathan Adams and Kathleen E. McLaughlin - China and its neighbors - November 17, 2009 15:05 ET

Despite strict "codes of conduct," labor rights violations are the norm at factories making the world's favorite high-tech gadgets.

What do you think about Silicon Sweatshops?

News Desk - China and its neighbors - November 17, 2009 15:04 ET

Are high-tech supply chains in Asia good business or exploitation? You decide.

Silicon Sweatshops: Shattered dreams

Jonathan Adams - China and its neighbors - November 17, 2009 07:24 ET

Migrant workers making gadgets at Taiwan's high-tech parks sign deals that make them modern-day indentured servants.

Silicon Sweatshops: The China connection

Kathleen E. McLaughlin and Jonathan Adams - China and its neighbors - November 17, 2009 07:22 ET

For migrant workers, an electronics factory job can be a ticket into China's booming middle class. But for many, it turns into a nightmare of poor working conditions and indifferent bosses.

Silicon Sweatshops: Disposable workforce

Jonathan Adams - China and its neighbors - November 17, 2009 07:22 ET

Laid-off Taiwanese workers accuse their firm of violating industry codes even when times were good.

Video: The Chinese on Obama

Josh Chin - China and its neighbors - November 16, 2009 19:16 ET

Japan’s downward spiral

Gavin Blair - Japan - November 16, 2009 18:17 ET

One in six Japanese are now poor. The new government has vowed to tackle the problem, but how?

Asia's pushback to big tobacco

Patrick Winn - Thailand - November 15, 2009 12:30 ET

The cigarette industry wants a bigger slice of Asia. Activists want them to butt out.

International visitors buoy US tourism industry

Susan E. Reed - Worldview - November 15, 2009 09:30 ET

Despite dreary economic times, a favorable exchange rate beckons foreign tourists to the majestic Grand Circle and beyond.

Obama in Japan: Reassuring an old friend

Justin McCurry in Tokyo - Japan - November 14, 2009 16:58 ET

America's first "pacific president" extends a hand. But it's not all smiles.

Obama in Beijing: What you will see. And won't see.

Kathleen E. McLaughlin - China and its neighbors - November 14, 2009 15:56 ET

In China, anything is possible. Nothing is easy.

How other US presidents handled the dragon

Kathleen E. McLaughlin - China and its neighbors - November 14, 2009 11:31 ET

From Nixon, to Ford, to Reagan, Clinton and both Bushes, dealing with China has never been simple.

On Location: Haryana — India's looming food crisis

Jason Overdorf - India - November 12, 2009 16:45 ET

Fat in Japan? You're breaking the law.

David Nakamura - Japan - November 11, 2009 08:40 ET

As the health care debate rages in the US, Tokyo lawmakers set a maximum waist size. Are you too fat for Japan?