I’m struggling to identify any agreement of real political or commercial significance that was struck during the 2-day Brisbane G20 summit in mid-November. Yes – a chunky 800-page communiqué was released as the various Heads of Government flew from Australia’s east coast. It consisted, though, of little apart from grand words and vague aspirations, with almost no costings, let alone information on sources of actual finance.
The leaders of the G20 nations – accounting for around four-fifths of the world economy – want an additional 2pc of growth by 2018, we were told. Beyond the simple mention of “investment, trade and competition”, there were few details on how this extra growth would be achieved.
In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order following World War Two. The US was already the world’s commercial powerhouse, having eclipsed the British Empire several decades earlier. America was also on course to be among the victors of “Europe’s conflict”, even though its economy was largely unscathed by war. As such, Bretton Woods was US-dominated and produced a settlement largely on US terms.
Seventy years ago this week, that fateful summit ended. Its close marked the moment the dollar’s unquestionable supremacy was secured. Since then, global commerce has been conducted largely in dollars and leading economies have held the greenback as their primary reserve currency. The same system remains in tact today, with the lion’s share of commercial settlements worldwide still clearing the US banking system – even if the parties involved have nothing to do with the States.