ISAS Insights

The consensus that developed among the governments of all major economies in 2008-09 at the time of the economic depression has dissipated leading to tensions among several of them. These are centered mostly on the issue of the value of their currencies. The replacement of consensus at the series of Group of Twenty (G20) meetings in 2009 with discord at the annual meetings of the International Monetary Fund (IMF) in early October 2010 has produced considerable uncertainty in the markets. The dispute over currency valuation has been exacerbated by political wrangling in the United States (US) leading up to the mid-term elections in November 2010. There is expectation that the G20 summit scheduled to be held in Seoul, South Korea may produce more concrete results than the earlier Washington meeting. At Seoul, some concerns of South Asia - in particular the voice it has in multilateral institutions such as the IMF and the World Bank - may also get addressed.