With the world teetering on the proverbial edge of the economic and financial cliff, the buzz in Washington late last month as the world's financial leaders gathered was that it was high time to change the system. The old format of a huddle of Group of Seven leaders followed by meetings of the International Monetary Fund and World Bank dominated by the United States and old Europe was well past its sell-by date. Not only did the leaders fail to make progress in tackling the crisis, but they failed to agree on how to put into effect the agreements made with great fanfare in London only weeks earlier. British Prime Minister Gordon Brown had proudly presided over promises to reform the global economy and pull it back from the brink of a depression. But in Washington, so many of the promises made in London proved to be hot air. More depressing, virtually all the leaders in Washington were looking at a global crisis through narrow national, and sometimes nationalistic, spectacles, which risks turning a crisis into a global catastrophe. In London, leaders of the Group of 20 had agreed to create US$1 trillion in new resources to combat the crisis. The meeting supposedly heralded changes in the international financial architecture, with China and India taking their seats at the top table. Sceptics had questioned how much of the funds would be new money and how much of it would go to the most needed places. But in Washington, it became unclear whether the US$1 trillion would materialise at all. The London deal included promises of a US$500 billion boost of the IMF's resources, to be used in emerging economies, plus a US$250 billion increase in the fund's special drawing rights. Neither deal was finalised in Washington. Plans to allow the IMF to sell some of its gold holdings and to use the US$5.2 billion in profits to help the world's poorest countries also failed to reach agreement. As it stands, the very poorest and most vulnerable countries will get a mere US$24 billion or 2.4 per cent of the US$1 trillion boost if and when it materialises. US Treasury Secretary Timothy Geithner proposed the number of seats on the IMF's main committee should be trimmed from 24 to 20 but ran into headlong opposition from European countries unwilling to lose their privileged seats. The US idea was to create a new, more representative and more powerful group within the IMF that would supplant the G7 and be the more natural focus of global financial decision-making. The finance minister of Belgium, a tiny country of 10.4 million people, point-blank opposed reform of the committee, declaring: 'I think that for the moment the representation around the table is attractive. The European countries are having to finance the Fund very strongly.' Belgium has 2.09 per cent of the IMF votes, less than China's 3.66 per cent but more than India's 1.89 per cent. This global crisis is still being tackled on a national rather than international level. Politicians facing elections have been busy looking for 'green shoots' of recovery. But this is short-sighted when the concentration should be on how to sort out the long-term health of the global economy. The IMF is as gloomy about the state of the world's economy as it has ever been and expects a 'long and severe' recession and sluggish recovery. It raised to US$4.4 trillion the sum of write-downs banks and others will have to make. Even this is a trifle compared with the 'refinancing gap' of the banks, which will be US$25.6 trillion by late 2011, the IMF estimates. Robert Zoellick, the president of the World Bank, underlined the gap between promises and action when he pointed out that at the G20 all the leaders had pledged the importance of free trade, but in less than three weeks, 'nine G20 countries have taken or are considering 23 measures that restrict trade at the expense of other countries. Some have lifted restrictions with one hand and imposed them with the other.'