"The old order changeth, yielding place to new,The world must move on, as there is no formula for success. The enterprise is much greater than that.
And God fulfils Himself in many ways,
Lest one good custom should corrupt the world."
[Morte d'Arthur - Tennyson]
The world is facing "the first truly global financial crisis", the prime minister has told leaders.
Gordon Brown said institutions such as the World Bank and United Nations need reform to tackle the double threat of economic turmoil and climate change.
He is hosting the two-day gathering in Watford attended by delegates including ex-US president Bill Clinton and Australian PM Kevin Rudd.
Topics including climate change and development will be on the agenda.
South African President Thabo Mbeki, New Zealand Prime Minister Helen Clark and EU representatives are also taking part.
Mr Brown and Mr Mbeki are due to hold one-to-one talks at some point on Saturday, with the election in Zimbabwe likely to feature heavily in discussions.
Arriving at the summit, Mr Mbeki said the international community should await the results of last Saturday's poll.
"It's time to wait and see the outcome of the election results. If there's a re-run of [the] presidential election, let's see what comes up with that," he said.
"I think that's the correct way to go."
The UK prime minister has already spoken to the leaders of Ghana and Liberia about the situation in Zimbabwe.
'Early warning system'
Speaking at the start of the Progressive Governance conference of centre-left leaders and politicians, Mr Brown said that the old institutions established in the aftermath of World War II were now unable to cope.
"We now have to reshape our global rules and global institutions for this new era," he said.
"We are facing a global financial crisis which is probably the first truly global financial crisis of the modern world.
"We have to reform our global financial institutions. It is absolutely clear that the national supervision that we have is inadequate and we need a global agreement."
The prime minister said the International Monetary Fund (IMF) needed complete re-structuring so it could act as an "early warning system" for the international economy.
He said the World Bank should help developing nations move towards cleaner economic development.
Mr Brown also suggested there should be an international reserve force of volunteers ready to help rebuild countries such as Rwanda and Bosnia following global crises.
RIO DE JANEIRO: For a while the world was flat. Now it's upside down.
To understand it, invert your thinking. See the developed world as depending on the developing world, rather than the other way round. Understand that two-thirds of global economic growth last year came from emerging countries, whose economies will expand about 6.7 percent in 2008, against 1.3 percent for the United States, Japan and Euro zone states.
The sharp rise in prices for energy, commodities, metals and minerals produced mainly in the developing world explains part of this shift. That has created the balance of payments surpluses fueling dollar-dripping sovereign wealth funds in countries like China. They amuse themselves picking up a stake in BP here, a chunk of Morgan Stanley there, and why not a sliver of Total.
We of the developed-world Paleolithic species are fair game for the upstarts now, our predator role exhausted. The U.S. and Europe may soon need all the charity they can get.
To place this inversion in focus, it helps to be in Brazil, where winter (so to speak) arrives with the Northern Hemisphere summer, and economic optimism, as exuberant as the vegetation, increases at the same brisk clip as U.S. foreclosures.
Huge offshore oil finds, a sugarcane ethanol boom, vast reserves of unused arable land, mineral wealth and abundant fresh water contribute to Brazilian buoyancy. But natural resources are only part of the story. As in China and India, an expanding internal market is bolstering growth. So is increasing corporate sophistication and global ambition.
At the annual National Forum, a gathering of business leaders, I felt like a first-world pipsqueak as leaders of the national energy company Petrobas (bigger than BP, Shell and Total) and Companhia Vale do Rio Doce, or CVRD (the world's second largest mining company), reeled off head-turning statistics.
Petrobras, which has spearheaded Brazil's push to self-sufficiency from heavy dependence on imported oil 30 years ago, will more than double oil production to 4.2 million barrels a day in 2015 from 1.9 million barrels today.
"With the latest discoveries, the South Atlantic will become a huge oil producer," predicted José Sergio Gabrielli de Azvedo, its chief executive.
Roger Agnelli of CVRD waved away the United States ("It's full of debt") to focus on the company's ambitions in Asia. It was imperative to be there, he said, because that's where growth, capital and ambition are. China, he noted, will account for 55 percent of iron ore consumption, 31.6 percent of nickel, and 42 percent of aluminum by 2012. Case closed.
Like many other big emerging-market corporations, CVRD has been on a buying-spree. It's not just sovereign wealth funds that are acquiring first-world companies these days. It's the new giants of the NAN (Newly Acquisitive Nations).
Emerging-market mergers and acquisitions are up 17 percent this year to $218 billion, while for the rest of the world they're down 43 percent to $991 billion, according to Thomson Reuters.
The 2007 Unctad World Investment Report said developing-world direct foreign investment totaled $193 billion in 2006, compared to a 1990s annual average of $54 billion. The U.S. 2006 figure was $216.6 billion.
CVRD bought Canada's Inco, a nickel miner, for $17 billion in 2006. It came close to acquiring the Anglo-Swiss miner Xstrata for $90 billion this year. Just last week, India's Vedanta Resources reached a $2.6 billion deal to buy U.S. copper miner, Asarco. That deal is being challenged by Grupo Mexico, creating a Latin-American-Asian fight for a U.S. company.
If you have trouble getting your mind around that, try standing on your head.
That's also a good position from which to view India's Tata Motors agreeing to buy Land Rover and Jaguar from Ford for $2.3 billion, or Tata Steel's acquisition last year of the Anglo-Dutch Corus Group steel company for $12 billion.
Globalization is now a two-way street; in fact it's an Indian street with traffic weaving in all directions.
"In an inverted world, not only have developing economies become dominant forces in global exports in the space of a few years, but their companies are becoming major players in the global economy, challenging the incumbents that dominated the international scene in the 20th century," said Claudio Frischtak, a Brazilian economist and consultant.
A shift in economic power is underway whose implications the developed world has not grasped. Of course the G-8 and the permanent membership of the UN Security Council need to be expanded to reflect this change. The 21st century can't be handled with 20th-century institutions.
That's obvious. Less obvious is how the United States, which underwrites global security at vast expense, begins to share this burden, so that the new multi-polarity of wealth is reflected in a multi-polarity of security commitments.
President George W Bush has invited world leaders to gather in the US by the end of the year to discuss reform of the global financial system.
The summit would be the first of a series announced after talks between Mr Bush, French President Nicolas Sarkozy and EU Commission chief Manuel Barroso.
But the agenda is unclear and differences are already emerging.
Mr Bush said any plan must not undermine free markets. Mr Sarkozy said "hateful practices" must be abandoned.
Before he arrived at Camp David, the US presidential retreat in the state of Maryland, the French leader warned the world could not "continue to run the economy of the 21st Century with instruments of the economy of the 20th Century".
Calls for action
After the meeting, Mr Bush said: "It is essential that we work together because we are in this crisis together."
|| Together we will work to modernise
and strengthen our nations'
financial systems so we can help ensure this crisis doesn't happen
US President George W Bush
He went on to invite world leaders to an economic summit after the US election in November, to discuss responses to the current financial crisis.
"Together we will work to modernise and strengthen our nations' financial systems so we can help ensure this crisis doesn't happen again," he added.
But Mr Bush said any plan to rethink financial mechanisms should "preserve the foundations of democratic capitalism" and include "a commitment to free markets, free enterprise and free trade".
Mr Sarkozy said the crisis could offer a "great opportunity" to build the capitalism of the future and leave behind the "hateful practices" of the past.
|| We cannot continue along the same
lines because the same problems will trigger the same disasters
French President Nicolas Sarkozy
"We cannot continue along the same lines because the same problems will trigger the same disasters," he warned.
Mr Sarkozy said the hedge funds, tax havens and financial institutions operating without supervision should all be re-thought.
"This is no longer acceptable," he added. "This sort of capitalism is a betrayal of the sort of capitalism we believe in."
European Commission President Manuel Barroso, who also took part in the talks, said: "We need a new global financial order."
Details of the summits are still to be worked out, but White House spokesman Tony Fratto said the first was likely to be held in November.
He added that Mr Sarkozy had recommended New York as a location. UN Secretary General Ban Ki-moon has proposed using the organisation's headquarters there as a venue.
That summit would seek to "review progress being made to address the current crisis and to seek agreement on principles of reform needed to avoid a repetition," the leaders said in their statement.
"Later summits would be designed to implement agreement on specific steps to be taken to meet those principles," it added. Other world leaders are to be consulted over the plan.
Correspondents say such meetings would echo the Bretton Woods conference of 44 nations after World War II, which established many of the institutions and monetary systems that are now under threat.