G20 - Fears or Expectations?

(picture: Franklin D. Roosevelt at London Summit 1933)

The upcoming G20 meeting where 85% of the World’s GDP will be present will take place in London where a similar meeting took place in June 1933. The question remains if this G20 meeting will meet the same fate as the former London meeting or a step away from the brink of the sharp economic downturn.

In 1933 the meeting was organized by the League of Nations . The objectives of many Nations were to re-instate the currency link to the Gold Standard, which would secure that prices and wages would fall in parallel with a downturn, and the idea was that this would still enable foreign trade. The objective of some of the leaders – Mussolini, Hitler – was to demonstrate that nationalism and increased spending of re-armament would prove to be a way out of the crisis, while the country that was accused to put a torpedo to the London summit was USA. The new president, Franklin Roosevelt, had put his New Deal on the table back home, and this – very much like the present situation – resulted in a weakening of the Dollar because of huge deficit – in other words: US Govt paid to get out of the crisis by inflating it’s currency. This would be effectively stopped if the Gold Standard was to be reinstated. But it shouldn’t have been a surprise that FDR would work against the scheme – already in his inauguration speech, Roosevelt said:

"I shall spare no effort to restore world trade by international economic readjustment, but the emergency at home cannot wait on that accomplishment,"

This time around the agenda is almost the same - http://www.londonsummit.gov.uk/en/summit-aims/ - but with the added objective to re-start the World on a path towards sustainable growth.

The official UK website for the G20 meeting expresses the hope that the meeting will restore financial stability and avoid further recession. Not all the key players share the optimism – China has argued that it fears the pressure on the dollar value as they have ended up by pouring more than 1000 billion Dollars into US Treasury Bonds. Hence they recommend that Dollars will be replaced as a reserve currency by Special Drawing Rights issued by IMF based on a basket of currencies. Already before Obama put his trillion dollar deficit to the Congress, China expressed fears that the 682 Bn $ portfolio of US bonds would be devalued. . Before the G20 meeting, the comments from Wang Qishan – Vice premier China: http://www.londonsummit.gov.uk/en/global-update/cp-china/active-part - has been moderate, and maybe China has reached the conclusion, that if the Dollar is no longer the World’s currency for reserves, than nothing would prevent the Dollar from falling. So China is facing a catch 22 problem. EU also recommends to hold back the China SDR-scheme for a while.

At the same time tens of thousands protest against the G20 meeting . As people are being fired, the ‘end of capitalism’ is often heard in the crowds. What may be an even worse sign is some experts view that we may have seen the ‘end of globalisation’. See the views expressed by Harold James in this version of ‘What matetrs’. :

"The breakdown has created a political impasse. State rescues of entire banking systems are a necessary and inevitable response to the financial meltdown, but the consequence will be to try to limit banking to national units. Italian taxpayers will not want to see their money used to bail out remote eastern European debtors. The same political logic applies for fiscal stimulus packages, where voters will not want to see foreign producers in effect subsidized."

We may once more witness a situation where US will take the lead in what would this time become a new era of nationalism, disguised as regionalism. Already the rescue packages accepted by the US congress contains element of protectionism, ‘buy American’.

Others remain optimistic. See Recommendations – From Brookings - http://www.brookings.edu/reports/2009/0326_g20_summit.aspx or to quote from their list of recommendations also pointing to IMF as a potential key player: (See the full report from

http://www.brookings.edu/reports/2009/~/media/Files/rc/reports/2009/0326_g20_summit/0326_g20_summit_bradford_linn.pdf )

“At least a tripling of resources for the IMF from currently $250 billion to $750 billion through a combination of a generalized quota increase, a sizeable SDR ($250 billion) allocation, a further authorization to borrow under the so-called “New Arrangements to Borrow” (NAB) or ad hoc borrowings from selected surplus countries— following the commitment already by Japan to $100 billion—and other measures to make the IMF a major actor in the global financial system”

The fears in US and UK are that there may not be lenders enough in the World to finance the galloping public deficits. Some UK critics have calculated that if you add the nationalized banks’ debt, this will all add up all debts ever accepted by UK Governments from 1691 to 2008!

Or, as it was put in this article: Public Debts at Armageddon height: http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article5811186.ece

“With the debts of the nationalised and part-nationalised banks now on the public sector balance sheet, the ratio of public sector debt to GDP in the UK exceeds that of Italy and Japan. And it is set to grow much higher. On the basis of the planned levels of borrowing, it could exceed 65 per cent of GDP in 2010-11. And at that scale of indebtedness, the Armageddon scenario most feared by the Treasury - that there will be insufficient lenders to match the planned level of borrowing - begins to look a distinct possibility.”

The UK recession clearly deepens as UK Public deficit hits all time record – but this time around so does the recession in almost all other countries. This is what gives us the hope that the G20 meeting – even if it may not solve all problems – at least will prove to be the first step on a long journey towards more global commitment and cooperation – including a greater role for the 3^rd World countries. The Financial Ministers met 2 weeks ago and this statement was part of their end comminqué for the preparatory G20 meeting:

"Emerging and developing economies, including the poorest, should have greater voice and representation, and the next review of IMF quotas should be concluded by January 2011,”

Public Services 2.0 – EU Seminar Bruxelles March 16.

The DG INFSO organisation last week arranged a very interesting seminar focusing on the impact of web 2.0 in Government, in particular trying to bring the attendance to the top European politicians to the impact that the new 2.0 technologies could bring to the table.

The main organizers behind the event, led by David Osimo, clearly expressed that their objective is to use web 2.0 as a tool to formulate and expand Europe’s next ICT-strategy and in this way for the first time have the user community engaged in formulating the ‘post i2010’ strategy.

The formal kick off for the revision of the current i2010 strategy will take place in Malmö, Sweden in November, but David Osimo and his colleagues’ aims at setting up a web 2.0 Community already from mid May. The seminar held on March 16. was intended as a show case of what is already going on, best practices from NGO’s, private companies as well as some public cases.

The morning session contained a number of ‘grass root projects’ – typically NGO’s, private persons or small organizations that had developed web 2.0 sites and/or tools to solve specific societal issues: Jack Thurston demonstrated a transparency project on farm subsidies in Europe – Farmsubsidy - as the first results indicated an enormous skew in the sense that all the big land owners obtained the majority of all funds available. David Price, founder of Debategraph, showed an interesting graphical WiKi-tool useful in many public debates.

A very inspiring presentation was made by Emma Mulqueeny – Rewired State – showing a ‘hacker competition’ in UK:

“On Saturday March 7th 2009 Rewired State held "National Hack The Government Day" at the new Guardian offices in Kings Cross. 80 developers created working projects from public sector information between 10am to 6pm, and presenting them to government officials and the media in the evening, before heading to the pub.”

The results was amazing, the top solutions awarded was a complete re-write of the public sectors’ job search solution (Job Centre Pro Plus ) and a site called Fix My Site , where users can suggest changes in public sector web sites to make them easier to use.

James Munro is a director of PatientOpinion by now a sort of icon in the public 2.0 area, originally received a lot of critical statements from the National health Services in UK when patients began rating their experience at the hospitals, but by now a very natural symbiosis between the public and the citizens.

OnRoadMedia is an extremely interesting project aiming at providing social media solutions to educate and train marginalized youngsters, street children, immigrants and homeless. This is a true demonstration on the real value of web 2.0.

Simon Hampton from Google Europe presented an interesting project linking public transportation time tables across Europe to provide a GoogleTransit solution using mash up techniques.

During the lunch break a new movie on the value of web 2.0 and crowd sourcing was shown.

To quote from the film Us Now:

“In a world in which information is like air, what happens to power?

New technologies and a closely related culture of collaboration present radical new models of social organisation. This project brings together leading practitioners and thinkers in this field and asks them to determine the opportunity for government.
This website features all material being created during the making of the film.”

Afternoon session started with a block focusing on experiences with projects and programmes that could stimulate web 2.0 innovation.

Anna Maybank presented the Social Innovation Camp project – an NGO set up collecting all sorts of ideas and suggestions for web sites or web 2.0 solutions for social innovation. Last round was held in December, and after selecting the most promising ideas, the persons with the bright ideas were confronted with hard core developers and during a couple of days their ideas came to life.

Alberto Cottica from Italy presented the Kublai Project. The idea is to stimulate growth and creativity in the southern part of Italy by offering a collaborative design environment using meetings in second life and a sounding board community to discuss and possibly engage with the owners of the ideas. So in fact it is a combination of a number of web 2.0 techniques: crowd sourcing, second life, social networks, peer coaching.

Wim de Waele represents a Belgian organisation called IBBT - Institute for Broadband Technology and has worked with user driven innovation for some years. It seems to be a European ‘Media Lab’ (like MIT) – and seem to have launched a very substantial number of interesting projects marrying creative ideas with technology experts. Also arts and culture has been targeted, and recently also a project inviting open source programmers (Not only in Belgium but internationally) to participate in collaborative creative projects.

I presented the IBM experiences using the innovation jam-technology. Since 2001 IBM has improved and tested a large scale collaborative jam session technique involving potentially all IBMers on a World Wide scale. The technique has been used also for external projects like the UN Habitat Jam as a preparation for the UN global conference on Urban Dwelling in Vancouver in 2005. The most recent Jam was held in October 2008 engaging more than 90.000 individuals including representatives for more than 1.000 IBM customers. The focus areas were to identity new, innovative solutions, mobilisation of customers, new ways of dealing with the environmental and energy challenges and exploiting globalisation in product development and service delivery.

The final session dealt with Government representatives and their views and experiences using web 2.0. Richard Stirling from the UK Cabinet Office talked about the study he has recently finalized for the UK Government and the Power of Information Taskforce. He also gave a number of private/personal experiences and pointed out a number of areas where the exploitation of web 2.0 by government would be inevitable.

Davied Van Berlon from Netherlands discussed on the role of ‘Civil Servant 2.0’, the changes necessary not only in the technical World but much more the change of culture that is needed also in terms in attitude, ways of working. The Civil Servant 2.0 is a combination of blogs, wikis, social network between civil servants aimed at educating, discussion among peers and by including web 2.0 specialists empower the civil servants and inspiring them.

Jose Alonso is the chair of the eGov group in W3C/CTC. He described projects and ideas to open up the Governments huge collection of data to the general public. One example was the transparency project in Chile where data on all public procurement is on line. The underlying requirement for to open up public archives is of course is to use open document standards like XML, OpenOffice.

Yven Punis, Principal Scientist from JRC IPTS, the EU Research Centre studying web 2.0 finished the day off by a discussion on how the technology might be taken up during the next few years.

David Osimo summed up the day and by using the RSS feed from the conference site you should be able to participate in the formulation of EU’s next version of the ICT strategy when the call for crowd sourcing starts in May. Eventually all of the presentations will be available here as well.

(The conference managed to be on top of the twitter popularity roll for 3 hours when the presentations and discussions were being broadcasted in live video).