BY PREETI UPADHYAYA
When G-8 leaders convene in Camp David several pivotal world dynamics will underpin their agenda. The state of the economy and the shifting global power structure will be present in every conversation and issues at the heart of the U.S. – European Union relationship will guide the agenda.
The G-8 leaders will focus on details of the slow global economic recovery, and industrialized nations’ role in aiding Arab Spring countries. Other probable topics include nuclear nonproliferation, climate change, food and energy security and development issues.
These issues will be discussed in the context of the global economy undergoing swift and dramatic change. G-8 leaders must grapple with orchestrating a recovery from a deep global recession that has called into question whether the capitalist model is the best for global economic success.
Meanwhile, China and India continue to gain momentum as strategic and economic powers. Additionally, differences are emerging in the strategic priorities of the United States and the European Union. While the United States increasingly looks to Asia for its strategic partners, the EU continues to focus on the Middle East and North America.
These key dynamics are the backdrop that brings together leaders from The United States, France, Germany, Italy, Japan, the United Kingdom, Canada and Russia.
At the same time, the so-called BRIC countries – Brazil, Russia, India, China (sometimes South Africa is included in this grouping) – are leading the global economic transformation, says Professor Patricia Werhane, chair of business ethics at DePaul University. She compares the growth of these emerging markets, compared to the G-8 countries, to the perennial story of the tortoise and the hare.
“With the G-8 countries there is too much emphasis on the short term. BRICs are like the tortoise, moving slowly but steadily along while the G-8 countries are like the hare racing towards the finish line,” says Werhane.
She explains that BRICs are where global economic growth is centered because these countries have overall less debt and more small- to medium-sized enterprise startups. She points to the example of Chile as a small country with high economic growth, low unemployment and low public debt.
While the G-8 member countries ought to be paying a lot more attention to this macro shift in the global economy, Werhane said, they’re likely to sidestep the issue because of the pressing need for an economic recovery that is to dominate the meeting’s agenda.
The tenuous economic situation in Europe has implications far and beyond the countries directly affected, one expert said.
“China has a major stake in the EU simply due to its trade volume,” says Professor Jay Chandran, department chair of International Business at Northwood University. The EU crisis, he explained, has negatively affected China’s exports to the region. “There’s a fear among more pessimistic economists that if the EU crisis worsens, oil prices will collapse, causing the Russian ruble to weaken,” he says.
The EuroZone crisis is also calling attention to the leadership of global financial institutions such as the World Bank and International Monetary Fund.
European leaders are now looking to the BRICs for economic support of the recovery, but this support is sure to come at a compromise over the traditionally western leadership of the World Bank and IMF.
“The BRICs would want a trade concession or a European deal to end the ‘gentlemen’s agreement’ about governing the World Bank and IMF,” says Professor Martin Edwards, who teaches international relations at Seton Hall University.
While economic issues are more than likely to dominate the G-8’s agenda, a range of other topics fall in the realm of the G-8’s interests and priorities, and might be discussed. They include:
* Global security, especially in Afghanistan and Arab Spring countries. Werhane says Afghanistan might be highlighted because all G-8 countries except Japan will overlap with NATO on this issue.
“Even Japan has a stake in Afghanistan due to its geographical proximity,” she explained.
* The Deauville Partnership. Participants meeting in Paris in late April agreed on actions to support democratization in Egypt and Tunisia, after those countries ousted their autocratic leaders.
They focused on four areas for effective governance, thought to be essential for economic growth and prosperity: open government and anticorruption, asset recovery, the policy environment for small and medium-sized enterprises, and international exchanges.
* Climate Change. With the populations of developing countries steadily on the rise, there is a pressing need for global investment in green technology. However, the topic of climate change is one that is often overlooked, largely because G-8 countries are slow to claim responsibility for contributing to greenhouse gas emissions and other environmental problems.
Werhane says that G-8 leaders generally delegate the issue of climate change to scientists, and often brush off the subject as an academic matter rather than one of political significance.
* Nuclear safety. The future of nuclear power has been called into question after Japan’s tragic Fukushima earthquake. This has focused more attention on the world’s energy supply as a whole as many countries with long-standing nuclear programs consider the risks and benefits associated with that form of energy.