A map with the article on the Group of 20 summit in Toronto incorrectly depicted England as one of the G-20 countries. The United Kingdom, which consists of England, Scotland, Wales and Northern Ireland, is a member of the group (the U.K. is sometimes informally referred to as Britain). In addition, because of typographical errors, the map's introductory text referred to "European Union ASEAN nations" in some editions and "the European Union Asian" in others. The intended reference was to the European Union and the Association of Southeast Asian Nations, or ASEAN.
G-20 leaders arrive in Toronto rived by national interests
Friday, June 25, 2010
TORONTO -- Leaders of the world's major economies began gathering here Thursday amid warnings that their failure to cooperate on core financial and economic issues could cost the world tens of millions of jobs.
After crafting a common response to the financial crisis in the fall of 2008 -- one that saw countries from Communist-governed China to conservative Canada pull in the same direction -- members of the Group of 20 arrive this time rived by newly asserted national interests. Many are at odds over details such as how fast and far some countries should cut public spending, and how strict new capital requirements should be for the world's major banks.
Any broader political agenda -- whether climate change or nuclear proliferation -- has been largely set aside.
The situation poses a challenge for President Obama's commitment to multilateralism, and it prompted the International Monetary Fund to warn of the high price tag if the world's major economies don't find common ground. In a report being distributed to the G-20 leaders, the IMF concludes that the difference between well- and poorly coordinated policies could be as much as $4 trillion in economic output and perhaps 30 million jobs worldwide over the next few years.
"That is the strongest argument for common standards," said Canada's finance minister, James M. Flaherty. "I think we can get there with a lot more work. It is complicated."
"The G-20 was kind of the thing that was at hand in a moment of crisis," said Charles Freeman, a China scholar at the Center for Strategic and International Studies. "It's not necessarily the natural board of directors of the global economy, let alone global social welfare. It just happened to be the tourniquet that was there when the bleeding was going."
It is indeed an unwieldy group, representing 90 percent of the world's economy but spanning the political sensibilities of Saudi Arabia's oil monarchy, China's opaque blend of communist politics and market capitalism, and increasingly assertive and economically important nations such as Brazil and India -- a tough forum to debate issues such as North Korea's weapons program.
There are observers from other African and Asian groups, as well as from the IMF, the World Bank, the European Union and other organizations -- a conclave so large and sensitive it has required the conversion of downtown Toronto into a fenced and heavily armed camp.
Obama's support for the group as the premier forum for discussing world economics speaks to the president's philosophy of global decision making, and answered criticism that the Group of Eight industrialized and mostly Western nations had become too exclusive a club. The smaller group will have its own one-day meeting Friday in northern Ontario.
Heading into Toronto, the larger forum has arguably helped smooth over some trouble spots. China's recent decision to allow its currency to increase in value avoided a potential argument not just with the United States but also with G-20 members Brazil and India, whose economies are also affected by China's policies. Major European countries agreed to divulge more information on the state of their banks -- a step the United States, the IMF and others probably would have pushed for at the Toronto meeting as an important part of financial reform.
But the expectation set at earlier meetings of a newly unified world leadership has been tempered. The stimulus programs put in place helped the world economy start growing again, but recent events have split the group into different camps when it comes to what should happen next.
Just as a recovery seemed to be taking hold, the crisis over government debt in Europe raised the risk of another round of recession. European governments have now embarked on a tough round of budget cutting -- including some, such as Germany, that Obama and others argue should ramp up spending to ensure growth continues as their neighbors scale back. Heading into the meetings, German Chancellor Angela Merkel rebuffed suggestions from Obama and others that her country's austerity efforts and continued large trade surpluses could spark a new downturn.