The G20 Summit for the year 2012 was held in Mexico from June 18 to June 19. The apparent agenda of this summit was to represent ‘developing’ countries in both vision and policy. What was basically discussed then? How to resolve the Euro zone crises; how to resuscitate the deploring condition of deeply debt European countries; how to lambast each other’s policies and how to collect funds for International Monetary Fund.
The G20 summit helped IMF to raise US $456 billion dollar which would act as a firewall to support the struggling Euro zone economy. The BRICS made a huge presence by contributing $60 billion, out of which $10 billion came from India.
This meeting was an occasion where heads of different countries met to discuss the condition of the troubled ones and help them out with some solution. But often these solutions are enforced upon them in order to obtain quick results without having the knowledge of the ground realities. This time these heads discussed about the ongoing bloodshed in Syria and what steps should be taken to stop it.
The show was stolen by a country which is on the verge of bankruptcy and seeks monetary help from others for its survival. Yes, Greece. The worrying part is that it does not guarantee to pay back the loan within a pre-defined time period and demands absolutely low interest rate. Some heads agree to this while some are sceptic. These sceptics are the ones who will fetch them a handsome amount of money later, better known as ‘bailout package’.
The intriguing thing is that once a country is given a bailout, there is another waiting in line. The second community in line after Greece is Spain. The line will soon be joined by Italy, France, Portugal and so on. The problem with these countries is that the moment the government will introduce severe austerity measures, the people will turn against them which will ultimately result in protests and riots. These acts force the head of the nation to cut down austerity measures. It will make the unemployment rate soar higher, leading to recession. This will further complicate the situation and will bring instability in these countries. In times like these, other countries have to help bring them up.
There was a huge criticism in India when PM Manmohan Singh announced $10 billion dollar donation to IMF. But this can be well explained by a small example. Suppose you live in a society and there is a fire in the society in which one house is burnt completely and the other house has suffered losses. Now, a community is formed and the people decide to contribute for the welfare of the burnt house. They come to your house and ask for some donation. Though denying isn’t an offence by rule, but you are a part of the society so you can’t deny. Irrespective of the problems you face in your own house, you need to contribute at least a small amount. And, this must be done to maintain the social image!!
Aniruddh Naik
Image Source [http://www.flickr.com/photos/donkeyhotey/7189329382/sizes/l/in/photostream/]
