THIS WORLD of OURS – August 2010

THIS WORLD of OURS

By Bob Harwood

G8 And G20—Summits In Transition

 

G8 vs G20: The G8 and G20 bring world leaders together on issues calling for their coordinated action. In more intimate settings new leaders get to know their peers and established relationships are renewed. But what was actually accomplished at this June’s Summits? G8 leaders committed to a substantial fund, augmented by a generous donation from the Bill and Melinda Gates Foundation, to address Third World family and maternal health. The G8 in Huntsville’s quiet cottage country experienced minimal disruption from well behaved protestors espousing their causes.

The wisdom of staging the G20 in the heart of Toronto is now being questioned. Security costs exceeding one billion dollars failed to prevent violence and rampant property damage led by hooded anarchists deliberately mingling with peaceful protestors. Riot police made 1000 arrests. The many held in jail overnight inevitably included non violent protestors caught up in the confusion. Continuing media debate risks obscuring the real work of the Summit.

The Global Economy: Leaders brought different priorities to the G20, now the premium forum for economic cooperation. Canada had added credibility as the country least impacted by the recession because of its stronger financial system. European powers mired in debt are making drastic cuts in social programs and budgets and championed a universal bank tax to hedge against future public bail outs.

America with a still fragile economy leaves the door open to further stimulus before committing to major deficit reduction but is moving forward with major reforms of its financial sector. Canada predictably opposed a universal bank tax. The G20 did reach general agreement on a goal to halve deficits by 2013 and stop increasing total debt as a percentage of GDP by 2016. But each country will determine how best to do so in its own circumstances. Enhancing financial regulation was also left for to individual approaches but in due course some international standard will be essential in our now interdependent world.

To break the logjam on the Doha Round of international trade negotiations there was agreement on placing more items on the agenda of the November follow up meeting to facilitate compromises and eliminate restrictions to free trade.

Climate Change: Host Canada had been reluctant to debate this topic in June after being stigmatized at the recent Copenhagen Climate Conference for its tar sands image and for per capita emissions among the highest in the world. And BP tar balls accumulating on Gulf of Mexico beaches have only added to the heat. But, pressed by the UN Secretary General and President Calderon of Mexico who will be hosting a Climate Change Conference in November, there was a renewed pledge for G20 countries to phase out inefficient fossil fuel subsidies in the medium term.Tax breaks to oil and coal companies and fuel subsidies for consumers must also be eliminated by 2020.

Grading the Summits: I will reserve judgment until we see if the second session of the G20 in Korea in November turns these generalities into measurable, time tabled commitments. This may be facilitated if present economic jitters settle down by that time. But some progress has been made. And the more broadly representative G20 is clearly and correctly replacing the exclusive Club of Eight. New voices are being heard and a new dynamic is emerging as China’s influence gains parity with that of America. Living as we do in an interdependent world we must act accordingly.

Ojo Del Lago
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