Obama arrives in Canada for G-20 amid warnings on global financial crisis
Friday, June 25, 2010; 11:04 AM
TORONTO -- President Obama joined leaders of the world's major economies here Friday for summit meetings 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 riven 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.
As he departed for the summit Friday, President Obama told reporters on the White House South Lawn that he hoped to build on the progress of the two previous G-20 conclaves he has attended "by coordinating our efforts to promote economic growth, to pursue financial reform and to strengthen the global economy" in the wake of the financial crisis.
"This crisis proved, and events continue to affirm, that our national economies are inextricably linked," Obama said. "And just as economic turmoil in one place can quickly spread to another, safeguards in each of our nations can help protect all nations."
Saying he was "gratified" by progress toward enacting financial reform in the United States, Obama added that at this weekend's G-20 summit, "I'll work with other nations not only to coordinate our financial reform efforts, but to promote global economic growth while ensuring that each nation can pursue a path that is sustainable for its own public finances."
Preceding the G-20 gathering in Toronto, leaders of the Group of Eight industrialized nations are meeting Friday in Muskoka, Canada.
The global economic situation poses a challenge for 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.