G8 Summit 2009

G8 GATHERING

From the desk of MD

THERE seems something grimly appropriate about this year’s G8 summit being held in L’Aquila, the epicentre of the deadly earthquake felt in April. The eight world leaders gathered for the next three days in the ruined Italian city have an awful lot of rebuilding to do.

High on the summit’s agenda will be a redesign of the rules under which the global economy functions in order to minimise a repeat of last year’s financial meltdown. Russia and China have signalled their intention to push for an agreement on an alternative to the dollar as a global reserve currency, particularly as they fear that their vast accumulations of US assets are at great risk of losing yet more considerable value. China’s attendance at G8 is mutually as an observer, but with events unfolding at home – ethnic tensions in Xinjiang as bad now as they have been for decades – Chinese monitoring of proceedings at G8 may well be short lived.

But, such discussions might well provoke the U.S. to raise, again, its long-standing complaint about China’s policy of manipulating its currency to keep its exports cheap, something which was a significant factor in destabilising the global economy, last autumn. Fiendishly complex and politically sensitive these issues might be, G8 does seem an appropriate place by which such grievances be aired.

32nd G-8 summit to focus on climate change, global economy and world hunger.

Talks on a new global regulatory framework for banks might now be made more fruitful given that most of the governments represented have been badly affected by the implosion of their financial sectors. There is already a general agreement that commercial banks need to be forced to hold more capital in good times to prevent them from needing costly public bailouts when times are bad. A commitment from the G8 participants requiring their domestic banks to do so would send a useful signal to the global financial community that the days of recklessness and mismanagement are coming to an end.

Another huge pressing task at hand is the response to accelerating climate change, particularly as both G7 and the London G20 summits, earlier this year, were consumed largely with the global financial crisis. At the end of the year in Copenhagen, world governments will need to come together in designing a successor to the Kyoto protocol. What better time, then, in putting some of those pieces of that agreement in place. A commitment, for instance, from the world’s largest economies to reduce their global emissions by 80 per cent by 2050 would increase the chances of a much needed breakthrough deal in December. Developing nations will be looking to see that mature economies are fully prepared in taking a lead on this.

G8 also gathers amidst the rubble of their own grandiose aid promises for the developing world. As Action Aid has announced, more than half of the money promised in Japan, last year, has not yet been delivered. The targets set at Gleneagles in 2005, too, look unlikely to be met. Italy, this year’s G8 host, has been particularly flagrant in ignoring its pledges.

Such failures generally exemplify the credibility problem of the G8. Far too often the group’s overly optimistic resolutions and promises of aid have either been forgotten or discarded altogether. A communiqué needs to be delivered that is more than just warm words and good intentions. Real solutions to real problems are needed on a diverse range of topics.

 

© Mark Dowe 2009: all rights protected

mark.dowe@googlemail.com