The important thing about the G-20 communique is that substantial damage has not come about. The countries agreed to talk tough on tax havens and hedge funds, which had nothing to do with the crisis. Barring this, populist ideas are absent. There is no significant attack on the basic principles of financial capitalism, as was sought by some European countries and many experts. We are not going to turn into an age of governments interfering heavily in markets. In a few areas, the G-20 has made concrete progress. The IMF and other multilateral institutions have more firepower. This will help them launch bigger programmes to help more countries. It is likely that the quota system—where an American heads the World Bank, and a European heads the IMF—will give way to meritocratic appointments. Also likely is that the IMF’s power structure will be changed over time. China’s $40 billion is predicated on this. India took the view that contributions should match rights accorded currently. That bureaucratically correct position missed the intangibles that would have come from offering some cash, given the extraordinary context of the summit. Promises of more money for the IMF and future reform are important areas of progress, both because many countries now might like to use help from the Fund and in terms of reducing the incentive to build up reserves, which was one element that led to the crisis. This last point, of course, requires intensive discussions between the US and China in the short term.
In many areas, the G-20 document says nice things, but promises little action. This reflects the inevitable constraints of negotiations that lasted one day. Hopefully, in coming days, these nice phrases will be translated into action. Finally, there are a few areas where even phrases could not be agreed upon. Exchange rate manipulation is one of these. The world economy must view exchange rates dimly. G-20 countries might have discussed this, but were perhaps unable to reach a consensus on it. As for links to Indian debates, there is little in the G-20 communique that directly affects India. But if proponents