The G-20 meeting which took place in Washington, D C on Saturday was, as we guessed, only a prelude to a more substantive decision-making meeting soon after the new Obama administration has settled in.

This event is scheduled for April, but in our view it will have to be brought forward, given the fact that so much could happen between now and April, in a still very volatile global financial situation.

The significance of the G-20 meeting is threefold. First, it signals an end to the antiquated international governance system embedded in the International Monetary Fund (IMF), the World Bank and the World Trade Organisation (WTO). Decision-making in the three has been monopolised by the outdated hegemony of the Western powers.

The G-8 - consisting of the USA, some EU countries, Japan and Canada - has traditionally made the major decisions about the global financial system, but that has been superseded by the G-20 which reflects global realities by including China and the largest developing economies, ie Brazil and India, among others. It took a global economic crisis, unprecedented in scope and depth since the Great Depression, to democratise global governance.

Second, the G-20 convened at the level of heads of government for the first time, having previously been a forum of finance ministers. This is an indication of the magnitude and severity of the financial crisis. We are witnessing what British Prime Minister Gordon Brown aptly described as the birth pangs of a new global order.

Third, it recognised that the global financial markets are not self-correcting and that the US, even with the G-8 in tandem, cannot control or regulate these markets. Their agreement for co-ordinated, comprehensive and sustained intervention is necessary. If concerted action is to succeed it must fully involve the new economic powers. Wisely, they have set the technicians to prepare details for the proposed follow-up summit on strengthened national and multilateral arrangements for regulation and surveillance, enhanced co-operation for cross-border crisis prevention and management and reform of the IMF and World Bank.

It was acknowledged that the IMF's resource is inadequate to meet the demands of the potential borrowers that will no longer be confined to developing countries. Reform of the governance of the IMF and World Bank will formally give more voting representation to the BRIC (Brazil, Russia, India and China) and developing countries.

We are aware that specifics on policy and quantum of resources for stimulus packages would have to await the presence of President Obama and because preparation time was too short in an atmosphere of fire-fighting.

In the interim, however, an important question that begs for urgent answer is what will be done to help the majority of countries that had no seat at the table, the over 100 small and poor developing countries whose economies are the most vulnerable to unfavourable external developments? They simply cannot wait for the multiplier effect of the G-20 to percolate through the world economy, nor do they have the resources to do their own fiscal expansion.

Credit is due to the G-20 for agreeing to review the adequacy of the resources of the multilateral financial institutions and regional development banks. But it will be six months before they make that decision. Instead, they should have immediately increased resources for short-term liquidity needs.

The fear factor

Feeding the multitude

DANGEROUS PETS