Finding a way to put global economy back on track

A CERTAIN angst permeates the global economy as it wanders aimlessly between fits of optimism and pessimism. Markets are up one day and down the next, economic data looks good one day and then bad the next, currencies gyrate for no obvious reason and volatility is everywhere.

This lack of direction was all too evident at the G-20 (Group of Twenty major economies) finance ministers' meeting in Turkey at the weekend. They paid lip service to the need for growth-oriented policies, structural reform, fiscal prudence and good financial helmsmanship. But there was little conviction in any of it.

There is a sense of impotence in the face of impending doom. Such gloom was justified during the 2007-2008 global financial crisis because the G-7 (Group of Seven major advanced economies) was the only forum for action then and was so compromised by its own financial excesses that it was seen as the cause of the problem, not the solution. The G-20 emerged into the limelight the following year as a seeming saviour of the world, consisting as it does of "dynamic" emerging as well as "tired" advanced economies. Led by China, emerging economies assumed responsibility for global growth, in fact if not by intention. Then, quite suddenly things started to go wrong and by this year emerging economies came to be seen as a drag on growth rather than as a dynamo. But why has everything changed, even to the point where global recession or even economic depression is being talked of by some?