THE PITTSBURGH FORMAT

For two days, Pittsburgh, one of the most comfortable cities in the US, was the centre of world politics. The leaders of the world's 19 largest economies (Australia, Argentina, Brazil, Britain, Germany, India, Indonesia, Italy, Canada, China, Korea, Mexico, Russia, Saudi Arabia, the United States, Turkey, France, South Africa and Japan) and of the European Union came here from New York, where the 64th session of the UN General Assembly had opened earlier. However, the main objective of the Pittsburgh summit was not to proclaim success, but to develop a strategy for overcoming the economic crisis, which is inevitably linked to the undertaking long-overdue reforms to the existing political world order.

The Pittsburgh forum was already the second G20 summit of 2009 and the third since the beginning of the crisis (the previous ones were held in Washington and London). The main interest in this summit stemmed from the fact that, regardless of how much we have been talking in recent months about the need to change the rules of the game in the world economy, in the light of the realities of the ongoing global crisis, there has actually been no progress. At the Washington summit, the leaders of the major countries limited themselves to voicing a joint declaration of intent. At the meeting in London, they reached specific agreements, in particular on the allocation of more than a trillion dollars to maintain the financial markets and world trade, ensure global control of hedge funds (private investment funds that are not available to a wide range of individuals) and to limit bank secrecy. And yet no decisive, strategic shift was observed. In anticipation of the Pittsburgh summit, French President Nicolas Sarkozy - one of the most ardent advocates of reform of the global economic system - even threatened to boycott the next G20 forum unless a policy decision was made to reduce bonuses for bankers, ensure the transparency of financial management and establish "norms to regulate international accounting relations which would not lead to crisis".

Russia, one of the countries most severely hit by the economic crisis, also expressed concern over delays in reforming the global economy. "We must agree quickly and reach agreements that will be binding on the 'Twenty' and all other countries, because we are interested in a new configuration of financial relations," said President Dmitriy Medvedev, ahead of the Pittsburgh summit.

The summit in Pittsburgh, in fact, has every chance of being a breakthrough, because the G20 camp, despite all the differences, is agreed on the most important issue - the need for greater regulation of global economic processes, in the interests of all states. Even the United States, accused by almost the whole world of fomenting the crisis and pursuing policies in the interests of financial magnates, has begun to advocate, under President Barack Obama, the implementation of measures that cannot be called anything other than socialist. The White House administration, which has initiated active state intervention in the economic sphere within the United States, also advocates the adoption of decisive measures to restore global economic balance, believing that "global economic growth will be weak if regulation in one area is not balanced by regulation in other areas". Speaking at a session of the UN General Assembly, President Obama acknowledged that the administration of his predecessor, Republican George W. Bush, ignored the interests of the rest of the world. Obama clearly stated that he is aware that the US is unable to solve global problems alone, and called for an era of cooperation.

And, I think, the decisions taken in Pittsburgh give reason to expect a long-awaited breakthrough. According to French government spokesman Luc Chatel, the G20 summit made it possible to "turn the page on the 20th century". "In view of the crisis and its impact, the G20 leaders made decisions that will serve to better regulate the economy. A few weeks ago we could not have even dreamt of such results from the summit in Pittsburgh," said the associate of the restless Sarkozy.

The main decision taken by the summit was to endorse the G20 format as the principal coordinating point for leading states (although the complete elimination of the G8 is still out of the question). The scope of the powers in the G20 will include not only the implementation of anti-crisis measures. The final communiqu? of the Pittsburgh summit emphasizes that the "Twenty" is not just a discussion club of world leaders and that, from now on, it will specialize in dealing with economic issues as "a real international institution". The G20 is becoming, in essence, the world's leading authority responsible for implementing the strategy to overcome the recession and coordinating the world's economic policies. In this role, the G20 format "is likely to be tested first next summer in Canada, where the G20 summit will start immediately following the G8 summit.

The second fundamental decision taken in Pittsburgh was to limit bankers' bonuses, a step stubbornly demanded by the EU from the onset of the crisis. The G20 leaders agreed that the excessive greed of top bank managers, which greatly increases risk in the world's economies, must be capped at state level. Accordingly, the payment of monetary bonuses will now be limited to a general percentage of net revenues. The G20 leaders also agreed that they would not suspend programmes of economic incentives until there is long-term stability in the global economy. In addition, an agreement was reached to work together to "raise standards in capital markets, commensurate with the degree of possible harm from the bankruptcy of financial companies." It is expected that by the end of 2010, the G20 will develop international rules to improve the quality and amount of bank capital.

The agreement to strengthen the position of developing countries in the Governing Council of the International Monetary Fund (IMF) and the World Bank (WB), reached by the Pittsburgh summit, will also be important. Voting rights for developing countries and transitional economies will be broadened in the World Bank by no less than 3 per cent, and in the IMF - by no less than 5 per cent. This decision shows that reforms to the global economy are directly linked to the formation of a multi-polar political world order. Countries of yesterday's "Third World" are taking greater roles in world affairs and, apparently, the first thing they are trying to do is to use the G20 format to promote their ideas for resolving the crisis and to lend new meaning to the world order. This initiative must be considered by the traditional movers and shakers of global politics, especially by a superpower like the US. Speaking at the UN recently, Barack Obama made some very symbolic statements, indicating, if not a radical revision of American foreign policy, at least some serious thinking in American ruling circles in this area. It is worth mentioning the statement by the president of the United States that "democracy cannot be imposed. Each country is building democracy in accordance with its own characteristics and traditions. There is no single, true way." The leader of a superpower which has been talking in recent decades about the Western and, above all, American model of democracy as the only possible way and which has based its relations with other states on this idea, now concedes that "the United States was sometimes too straightforward in its policy in this area," although Obama observed that the democratic principles which the United States seeks to establish, are universal for all countries in the world "and the United States of America will never cease its efforts to protect the right of people to determine their own fate."

With specific regard to the Pittsburgh summit, it should also be noted that, for all its industry, it did not find answers to all questions on the table. The decisions made do not constitute a clearly agreed strategy to overcome the current crisis or, moreover, prevent the recurrence of similar crises in the future. The proposed G20 anti-crisis draft is confined to an agreement not to suspend state support for the economy. The final communiqu? contains vague promises to increase the number of jobs, expand the access of the poorest strata to pure energy, overcome destabilizing fluctuations in the price of assets and loans etc. Nor did it resolve the burning question about withdrawing excess liquidity from the economy, despite the fact that experts have warned of the threat of inflation for several months. These and other problems will probably be the subject of detailed consideration at the next meeting of G20 leaders.

The latter are, apparently, aware that time is running out. The world is at a crossroads, and this is proved once again by the fact that, dissatisfied with the current situation, mankind is breathing down the neck of its political leaders. Anti-globalization rallies have become more frequent and they are increasing year by year, creating more and more inconvenience and anxiety for the organizers and participants of the meetings of the major powers.