5 Things to Watch for at the G-20
As 35 leaders are convening at the G-20 summit in Pittsburgh, there are five main issues to watch. Here they are:
1) The Obama administration will propose "sustainable and balanced growth" coming out of the recession, telling big exporters, primarily China, not to count on Americans to go into hock while they import foreign goods, coinciding with the United States's longtime effort to persuade China to switch from an export-driven to a consumer-driven economy, and to let its currency appreciate. A second aspect of the growth strategy is what it will signal about the intention of the major economic powers to lessen government's role in the market. But not much specifics are expected on when the U.S. will raise interest rates, cut federal spending or reprivatize the American banking system.
2) Speaking of China, trade will be a big and perhaps contentious issue, because the Chinese are still furious over Obama's recent imposition of tariffs on Chinese tires and the implicit threat that such tariffs could be slapped on other products if China does not let the value of its currency, the renminbi, rise more than it has against the dollar. Obama has yet to convince global economic powers that he really is in favor of free trade. He's yet to convince business interests in the United States either. Look for pressure on him in Pittsburgh and how he responds to it.
3) Global warming is another big issue, only a few months away from the big United Nations conference on that subject in Copenhagen. Europeans are dismayed that the American legislation — stalled by the health care debate — appears likely to include a package of protectionist measures to help American industries compete against Chinese and Indian products, if those two countries don't sign on to a global warming pact. The world leaders also have to reassure poor countries that they will get the financing and development assistance to convert to low-carbon economies. That will come with a big price tag, just as everyone is trying to wind down from the crisis.
4) A deep rift has opened between the Europeans and the Americans over financial regulation, and it will be interesting to see how they resolve or paper over it. The Europeans want strict limits on compensation of banking executives. The Obama administration is resisting their call for pay caps and wants requirements on the minimum amount of capital each bank has to have in relation to its assets and liabilities, along with other limits on their activities.
5) The issue most dear to many participants, but not to us civilians, is the future global financial architecture. Should the G-20 become a permanent steering committee for the global economy, replacing the old G-8? Should the International Monetary Fund and the World Bank be given new responsibilities and be forced to give greater governing power to the emerging new economies, especially China, India and Brazil? Look for some questions to be answered in Pittsburgh.
It will definitely be interesting watching Mr. Obama showing world leaders the sites and sounds of Pittsburgh — which, truth to tell, is a city of many charms and much history. But it is unlikely to serve as more than a three-river diversion from the flood of problems facing him at home. Meanwhile, the world leaders are no doubt waiting for Obama to emerge as a leader of real stature, more than a tour guide to a steel city with a great past and an uncertain future.
Read the full article here.
1) The Obama administration will propose "sustainable and balanced growth" coming out of the recession, telling big exporters, primarily China, not to count on Americans to go into hock while they import foreign goods, coinciding with the United States's longtime effort to persuade China to switch from an export-driven to a consumer-driven economy, and to let its currency appreciate. A second aspect of the growth strategy is what it will signal about the intention of the major economic powers to lessen government's role in the market. But not much specifics are expected on when the U.S. will raise interest rates, cut federal spending or reprivatize the American banking system.
2) Speaking of China, trade will be a big and perhaps contentious issue, because the Chinese are still furious over Obama's recent imposition of tariffs on Chinese tires and the implicit threat that such tariffs could be slapped on other products if China does not let the value of its currency, the renminbi, rise more than it has against the dollar. Obama has yet to convince global economic powers that he really is in favor of free trade. He's yet to convince business interests in the United States either. Look for pressure on him in Pittsburgh and how he responds to it.
3) Global warming is another big issue, only a few months away from the big United Nations conference on that subject in Copenhagen. Europeans are dismayed that the American legislation — stalled by the health care debate — appears likely to include a package of protectionist measures to help American industries compete against Chinese and Indian products, if those two countries don't sign on to a global warming pact. The world leaders also have to reassure poor countries that they will get the financing and development assistance to convert to low-carbon economies. That will come with a big price tag, just as everyone is trying to wind down from the crisis.
4) A deep rift has opened between the Europeans and the Americans over financial regulation, and it will be interesting to see how they resolve or paper over it. The Europeans want strict limits on compensation of banking executives. The Obama administration is resisting their call for pay caps and wants requirements on the minimum amount of capital each bank has to have in relation to its assets and liabilities, along with other limits on their activities.
5) The issue most dear to many participants, but not to us civilians, is the future global financial architecture. Should the G-20 become a permanent steering committee for the global economy, replacing the old G-8? Should the International Monetary Fund and the World Bank be given new responsibilities and be forced to give greater governing power to the emerging new economies, especially China, India and Brazil? Look for some questions to be answered in Pittsburgh.
It will definitely be interesting watching Mr. Obama showing world leaders the sites and sounds of Pittsburgh — which, truth to tell, is a city of many charms and much history. But it is unlikely to serve as more than a three-river diversion from the flood of problems facing him at home. Meanwhile, the world leaders are no doubt waiting for Obama to emerge as a leader of real stature, more than a tour guide to a steel city with a great past and an uncertain future.
Read the full article here.
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