A lost opportunity? Looks like it,
if the briefing about the planning is any guide.

The G20 (a talk-shop of finance
ministers and central bankers from rich, poor, emerging and past crisis
countries) is to meet in Melbourne in November. The meeting will be
chaired by the Treasurer, currently Peter Costello, and will be an opportunity
for the newly appointed successor to Reserve Bank governor, Ian Macfarlane, to
meet his (or her?) peers on Australian soil.

According to a must-read article by
David Uren in The Weekend Australian of 7-8 January 2006, the Treasurer is pushing a three-pronged agenda of
alleged Australian interests. These are:

1. winning agreement to increase
Asian and Latin American power in the IMF at the expense of European countries;

2. establishing principles to
improve resource and energy security for both buyers and sellers; and

3. getting the world financial
community to focus on the consequences of ageing populations for international
capital flows.

It is hard to understand why the
three issues identified by those who briefed David Uren are either the most
important issues in front of the world today or are the issues that
Australia ought to be pushing hardest
at this time.

1. The composition of the G20
ensures that only polite words will be endorsed on IMF reforms (the Europeans
present will not accept any real dilution in power, unless there is a quid quo
pro).

2. The focus on energy security is
perplexing, and potentially embarrassing.

3. The one thing we know about
international capital flows (in a floating exchange rate world) is that they
adapt instantly to new circumstances and need no government assistance or
intervention, so whatever the consequences of ageing (which by and large we
still don’t know), international capital flows will adjust automatically to
facilitate what has to change.

The key challenges for the world at
this time would appear to be somewhat different in our
eyes…

Read on at Henry
Thornton.