Los Cabos - The scene at the just-concluded Group of 20
summit held in this seaside resort would have been unthinkable a decade ago:
hundreds of dignitaries gathered in opulent Mexican hotels and convention halls
to hammer out an economic bailout for Europe.
Meanwhile, the leaders of Brazil and China kicked in tens of
billions of dollars to the International Monetary Fund (IMF) to rescue
downtrodden Spain and Greece.
Although the gathering didn't produce a solution for the
ailing eurozone, it did outline the globe's new balance of power. Developing
countries projected optimism and wealth over the summit's two days, while
European and US leaders struggled just to stay solvent.
A lot has clearly changed since the 1990s, when Asian and
Latin American economies were slogging through recessions while
Washington-based power brokers ordered up the very kind of austerity-minded
prescriptions now sparking street protests in Europe.
Even during recent economic crises in the US and Europe,
China has been posting annual growth rates topping 8%.
Countries with booming Chinese trade, such as Argentina and
Ethiopia, have similarly seen their economies thrive. China's economy surpassed
Japan's over the past year to become the world's second biggest; Brazil's
overtook the UK's to take sixth place.
"It is a different picture and reflects the fact that
(developing) economies are not only the largest and fastest growing economies
but are among the biggest economies in the world," said Uri Dadush,
director of the international economics programme at the Carnegie Endowment for
"Clearly, neither the Americans nor the Europeans are
in any position to tell the biggest economies what to do."
Mexican President Felipe Calderon cut to the point while
speaking to reporters on Tuesday afternoon as he noted developing world
contributions to the IMF for a possible European bailout.
Although the countries still have lower standards of living,
their economies are growing and many have amassed large foreign reserves.
China had pledged $43bn to the fund, while India, Mexico,
Brazil and Russia each chipped in $10bn.
The United States, Calderon drily noted, was not giving a
single penny, due to "serious restrictions of a legal and political
In other words, coughing up billions to save Europe was
impossible for deadlocked US politicians, especially in an election year and as
the country struggled with its own budget deficits, economic analysts said.
University of Maryland economist Phillip Swagel, a former
treasury department official in the George W Bush administration, said
developing countries' new economic power was already translating into growing
In fact, the Brics countries representing Brazil, Russia,
India, China and South Africa were the ones making demands on Europe during the
summit, saying they should be given a bigger role in the governance of the IMF
if they were going to send billions to the fund.
Europeans have traditionally led the organisation since its
founding nearly seven decades ago.
"With their resources comes a greater say," Swagel
said. "It's a big change. We were once telling Asian counties what to
The power shift was clear in the air-conditioned hallways
and balmy outdoor lounges of the G20 where dignitaries and reporters mingled.
News crews from Ethiopia and China filled press conferences,
while Brazilian and Russian leaders drew the most attention.
heads of state stepped before TV cameras to thank China for helping out while
promising that their countries would do better.
Heloisa Castro, a Washington-based reporter for the
Brazilian network Record TV, said Brazilians were energised by their new
prominence, after so many decades of suffering dreadful busts and booms.
Still, she said, they had no right to preach solutions to
Europe, a point President Dilma Rousseff made to an international gaggle of
reporters on Tuesday.
Preventing European and US turmoil from dragging down Brazil
was the order of the day, Castro said, as economic growth in some developing
countries has slowed sharply this year.
"I think it's very curious that now, we who have been
through all these IMF adjustment programmes in the past with their draconian
conditions, we now are seeing European countries go through the same
thing," Castro said.
"But if the economies in Europe and the US go down, we
all suffer. We can't only live with the Brics countries."