The G-20's New World

Optimism is the leitmotif surrounding the Group of 20 economic summit that opens Thursday in Pittsburgh. Yet certain concerns remain. A year ago, as the dramatic recession unfolded around the world, many were convinced we were heading for a repeat of the crash of 1929.

However, because of measures adopted at the G-20 summit in London in April, the worst threat to the global economy in decades was contained. After a 9% decline, global trade has rebounded, thanks to the G-20's injection of $250 billion in flexible, unconditional credit. Nearly 50 million jobs will be lost in 2009, but there are signs that the worst is past. The leaders of the G-20 also agreed to raise the International Monetary Fund's lending capacity to $750 billion to help countries, particularly developing nations, hit by the drastic cutback in foreign trade and credit. The scale of resources mobilized has been unprecedented. But even more significant was the quick and decisive show of collective will involved. The degree of trust thereby regained has helped keep the economy afloat during this period of great uncertainty and turbulence.