Connect to share and comment

G20: The two sides of the global economy

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

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.