After weeks of preparations and hours of brainstorming and a White House state dinner hosted by President Bush, the world is as close to a real ‘solution’ to the current crisis as it had been weeks ago when the markets started to unravel. Of course, the heads of state from nearly two dozen nations have agreed to continue working together to bring stability back to the global financial system.

President Bush says the US and other nations have agreed “we need to improve our regulation and to ensure that markets, firms, and financial products are subject to proper regulation and oversight.”

However, they put off difficult decisions about how to overhaul financial regulations until next year.  Which simply means the current economic mess will be left to the next administration of Barack Obama to clear.  The next leader of the world’s largest economy will have to make all the painful and predictably unpopular choices when he takes over on January 20 next year. 

So notwithstanding the grandiose rhetoric and pious intentions before and after the meeting in Washington, the G-20 summit may have achieved little to kick-start the world economy.  Many of the measures suggested by the summit like stricter oversight and regulation of markets, firms and financial products are already in place, or are supposed to have been in place. The call for “greater transparency and accountability” is very noble. But most countries have already been working on this front.  Even the massive stimulus and bailout packages that the US, UK and many other countries including the UAE have advocated and introduced in recent weeks have failed to resuscitate the markets.

European leaders led by French President Nicolas Sarkozy who played a pivotal role in convening the meeting in Washington had promised a summit that would not only arrest the current freefall of markets around the world but prevent future disasters.  

Many had hoped that the G-20 summit would break new ground and aggressively challenge the strongly antiregulatory, free-market precepts that have dominated the US policy in recent years.

In the end, it was little more than a very expensive photo op and a chance for the world leaders to touch the base as it were since this unprecedented economic crisis hit us all.   

There were no takers for the proposed new regulatory structures, which have been championed by Sarkozy and backed by others. British Prime Minister Brown’s call for a larger coordinated global stimulus package also fell on deaf ears. So perhaps it’s only apt that the depressed markets including those in the UAE responded to the Washington summit with great dismay. 

Looks like this wave of doom and gloom will stay with us until the end of this year or the end of Bush presidency.  It’s essentially a crisis of confidence in global leadership.  And the pall of gloom may lift only when there’s a change of guard in Washington.