President Obama's first stroll in the manicured fields of international economic diplomacy has been a success. The mere fact that 20 governments met in London, instead of seven or eight as it used to be, can be considered progress. However, beyond the rituals that surround these summits, the governments of the principal economies are now committed to apply anti-cyclical economic policies, against what is now recognized as the deepest slowdown in the world economy, since the end of the Second World War.
The latest estimates released by the multilateral financial institutions, before the G20 Summit, confirm that the world economy has fallen into a generalized recession, since the last quarter of 2008. The World Bank estimates that this year the world economy will contract by 1.7 percent and that a weak recovery may start in 2010.
Against this bleak outlook, the heads of state and government of the world's economic powers agreed to inject $1.1 trillion into the world economy, increasing the resources of the International Monetary Fund, now committed to apply counter cyclical policies. Additionally, there will be more lending by the multilateral development banks, such as the World Bank and the regional banks, including the Interamerican Development Bank, more trade finance and aid to the poorest developing countries. Other agreements dealt with the prevention of future financial crises, through more regulation of private financial institutions and tax havens, fighting protectionism and supporting the Doha Round of trade liberalization.
Briefly, at the London meeting of the G20, the participants acknowledged that more international cooperation is required to confront the world recession.
Isaac Cohen is the former director of the Washington Office of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). He is a commentator on economic and financial issues for CNN en Espanol TV and radio.
