G20 aftermath

This is the first in a series of posts related to G20. I hope to provoke some discussion here, so if you read this and feel heated by my comments, use email to blow your arguments on me, it's a genuine offer.

Today my crazy Polish friend Martyna went with her Turkish equivalent to Seoul to protest against G20. As we had some issues to discuss I called her and caught her on the spot in action screaming Stop G20 and so on. I just remember that I told her to have some mercy, cause after all, these guys do also care for the world. Martyna replied "Funny said".

Hmmm, good question, asked I myself, do they?
Here in Korea everyone is so crazy about it because it helps Korean nation branding and advertises the city globally. Just like tourism increased after the FIFA WC 2002 it will boost now cause everyone would like to see COEX.

Nevertheless leaders had come to Seoul for 2 days, or say 24hrs to discuss some hot issues. Prior to this event Korea held two semi successful conference events: G20 Development Conference and Bridge20 held in recent weeks.

As part of Nation Branding Korea is trying to build it's public diplomacy by sharing her development path as the growth model for other nations. But also Korea had taken a role of advocacy of African nations and therefore their representatives had been present.

So they talked about currencies, trade inequalities, and other stuff. So they agreed on the issues about trade inequalities between developing and developed countries. As to the heated currency issue one of the journalists on Deutsche Welle had put it: "They actually talk about it, do you think it's already some advance in the process?"

As part of the Seoul statement they want to put more responsibilities on China for the global banking system, that is their solution.

Several months ago I volunteered to do the coverage for the 1st Polish Radio Channel on the event. My boss replied: "No need, they will talk a bit, smile to the camera and so it will be". Apparently he was right. Actually I feel pity for all these protesters because it's November and rather freezing outside. It all seems like barking at the wrong tree.

There are things which are not even talked on G20 meetings, and these are speculations and short term forex games which tend to do a lot of mess in the global finance world.

I messed up the 3rd session of G20 Development Conference with a very inconvenient question. Suddenly during a very sleepy panel on food crisis and sustainable development I got suddenly very awake when I heard that wheat price rise and rice price rise in 2007 - 2008 had been due to oil price rise. Well to my best knowledge no it had not. It was a result of sudden fund allocation by Goldman Sachs and Lehman Brothers when they got to conclusion that they actually miss some hard cash in their safe boxes which they won't get from ill-managed housing loans so why not take it from food commodities?

I have smiled nicely and asked "We may face one underestimated issue here... - here I went on explaining the issue of speculation and continued - how possibly can G20 restore transparency on food commodity market, what can be done about food commodity bonds?" There was a moment of awkward silence and the speaker said " Well there is no evidence that the food commodity price rise had been a result of speculation"... in that moment I had seen movement in the ballroom, that is when everyone got really awake looking at me with this expression "Are they nuts?"

I smiled to the very end, nicely thanked the panelists for their answers and headed to the lobby for a cup of coffee. On the way Mr Cozendey from Foreign Office of Brasil, their economic expert said to me "Well, are you happy with their answers?" I denied. He replied stating as follows " And you are right, there are quantities of $ flying on food commodity speculation and it's exchange rate is linked to it in bigger extent than with anything else".

Some people may ask me why don't I come with solutions instead of critisism?
Oh I do, here they are: let ill-managed banks go bankrupt, don't bail them out. The blank space left by one business is almost immediately taken by the other one. The one which may offer something better to the market and it applies to banks just as much as to anything else. I can understand a bailout for some coal mine employing 80% of population of some area, but a bank??? Give me a break!

And I have my argument to back this up. Goldman Sachs received first bailout, and what did it do? It played on currencies in Middle and Eastern Europe almost directly causing financial and political trouble in Ukraine, Hungary, and Baltic States. They also tried to play on Zloty and our Fed made the intervention movement.

Is this what you are supposed to do with money taken straight from pockets of hardworking American commoners? Spread the financial crisis globally, spread the turmoil and smile to the photo afterwards?

These are my thoughts regarding G20.