The G8 and the Global Food Security Crisis

July 9, 2009

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Jennifer Clapp
CIGI Chair and Professor, Balsillie School of International Affairs, University of Waterloo

Food security is on the agenda as the G8 leaders meet this week in L’Aquila, Italy. It is an appropriate moment to be addressing this important issue, as the FAO recently announced that the number of undernourished people on this planet has now surpassed 1 billion. This is an historic high for the number of people experiencing severe hunger.

It is extremely troubling that global hunger is on the rise despite the fact that food prices on international markets are lower today than they were last year at this time, when the G8 leaders last met. When looking at the factors contributing to this situation, it becomes clear there are multiple complex causes to the current food situation, many of which have sources in rich countries. These problems have been exacerbated by the current economic crisis as it spreads from North to South.


China’s Currency Challenge

July 5, 2009

Gregory Chin
Senior Fellow, CIGI

Statements from the Chinese representatives that it would be “normal” for currency issues to be discussed at the G8 Summit has set off a reaction from the established members of the Club. Japanese representatives have retorted that the currency issue is a side issue that can be discussed at ‘side meetings’ of the emerging economies, holding tight to the view that ‘only one currency is needed’ – blocking the issue from the agenda.

Regardless of whether or not the currency issue is ultimately put on the agenda at L’Aquila, the reality is that the currency challenge has become a systemic issue that is demanding the attention of the truly global powers. The “G7”, like it or not, will be meeting this year, in an atmosphere of global uncertainty, as leaders from Russia, Brazil, China, and other countries, have expressed concerns about the value and stability of the U.S. dollar, and the world economy’s dependence on the dollar as the reserve currency. What makes the currency question an issue of systemic relevancy is that Chinese authorities have undertaken a series of measures that indicate that Beijing is interested in gradually expanding the role of the Chinese renminbi (RMB) as an international currency.

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Colliding Domestic Interests and the G8

July 5, 2009

Ruth Davis
Junior Research Fellow, International Economics, Chatham House

How much does anyone expect from the G8 Summit next week? The G20 London Summit was a relative success largely because there was an overwhelming awareness of the intensity of the financial and economic crisis: it was crucial to send a signal of confidence to the global economy. The Summit was seen as a tool to turn sentiment around and to make a convincing case that IMF support would help vulnerable economies avoid financial, social and political disaster. However, the G8 Summit is not perceived as having the same strategic importance.

There is a danger the appetite for multilateral concessions and deal-making has dried up as leaders concentrate on their own domestic agendas. Angela Merkel, Taro Aso and Gordon Brown all face elections within the coming year, making new commitments difficult and also implying a lack of appetite for discussing the still high risks posed by the economic and financial situation.

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G8 and International Development

July 4, 2009

On the third day of meetings at L’Aquila next week, more than 20 African leaders have been invited to participate in discussions with G8 countries on development assistance. The global economic crisis has changed the financial circumstances of the leading industrialized nations, and their continued support for aid is put in doubt.

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It takes Three to Tango

June 30, 2009

Max Watson
Associate Fellow, Chatham House and Fellow of Wolfson College, Oxford

Aggressive fiscal and monetary policies – and widespread bank intervention – have stabilised the global economy. But it is far from clear that policy-makers have an exit strategy, or a new growth model to exit to. This is not just a challenge for the US and China: the upcoming G8 at L’Aquila should focus sharply on Europe’s crucial role.  

The IMF’s last WEO paints a worrisome picture of the medium-term outlook. Global growth recovers, but imbalances (between 2009 and 2014) are barely changed. China’s surplus just continues, as does that of newly industrialised Asia, while the US continues to run a current account deficit of 3 percent of GDP. But if that means a recovery driven substantially by US domestic demand and Chinese exports, the risks are obvious. With the euro area adjusting very slowly, and with China keeping a strong competitive edge, then US policy-makers may repeatedly defer any monetary and fiscal exit strategy. And protectionist pressures are likely to mount.

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Key Questions for the G8 L’Aquila Summit

June 23, 2009

 

Leaders of the world’s major economies are meeting from 8-10 July 2009 in L’Aquila, Italy, for the annual G8 summit. Reporting live from the G8 Media Centre, this blog will be a ‘watching brief’ on the summit process, tracking the critical discussions that will take place on and around the official agenda.

The L’Aquila summit will be the first meeting of the G8 leaders since the collapse of the global economy. Until now, “the 8”have been engaged in the upgraded G20 summit process. This poses a challenge for this year’s G8 summit – how does G8 differentiate itself from the G20 track? Staple G8 items such as climate change and African development have been announced as priorities for the Italian Summit. One day at the three-day Summit has been allocated for the G8 to discuss critical issues with the major emerging economies, including matters of the global economy. This Summit will also give added emphasis to shared security concerns. However, recent events such as North Korean nuclear-related missle testing and the political demonstrations in Iran are likely to enter the discussions.

Some of the “G5” emerging powers have played important roles in the globally coordinated response to the ongoing global economic crisis, thus emphasizing their growing prominence in world affairs. The underlying tension between the G8 and G20 highlights the significance of the culmination of the three-year “Heiligendamm Dialogue Process” (HP), the structured dialogue between G8 countries and the major emerging economies of the South (China, India, Brazil, Mexico and South Africa). The HP final report will be delivered at L’Aquila.

From now until the conclusion of the summit, this blog will examine the evolving agenda and main discussions at and around the Italian Summit. Our expert analysts will offer commentary live from the G8 Media Centre. This blog will examine key questions on the relevancy of the G8 summit, centering on the following areas:

1. Who is taking the G8 seriously?

Should we care about the G8 Summit? Which issues are the media giving priority coverage at the summit? How have non-state actors approached the G8? Will protests and demonstrations command more public attention than the G8 discussions? If so, why? Will external events (war, terrorism, disasters) draw attention away from the planned agenda?

2. Will the G8 succeed in tackling such an ambitious agenda?

Have shifts in the reality of the global economic order affected the G8’s ability to deliver? Has the current global economic crisis affected the ability of “the 8” to deliver on their development assistance commitments for African countries? What should be expected of the outreach meetings African leaders? Will the G8’s Major Economies Forum compete or complement the Copenhagen climate negotiations?

3. How will the G8 differentiate itself from the G20?

Which countries and leaders are attending? How is the G8 performing in terms of of its efficiency and legitimacy? If the G20 Summit process continues to gain momentum, what impact does the future hold for the G8? Should the G8 be reinvented? What are some of the options for G8 reform?

4. Which countries are demonstrating leadership?

Which countries appear to taking the lead on which issues at this Summit? How large a group of invited guests will be in attendance at L’Aquila? What is the role for these non-members in the substantive discussions? Has the G8 lost its original comparative advantage – its role as an intimate forum for problem solving on critical issues?

5. What will be the outcome of the final report of the Heiligendamm Process?

Have the HP Working Groups made sufficient progress in enhancing dialogue among and between the G8 and G5? What types of recommendatins may appear in the HP Final Report? Will Italy’s proposal of a ‘G14 for a day’ establish a lasting precedent for future Summits? How should Canada respond as it assumes the G8 Presidency in 2010? 

This blog is a joint production of CIGI and Chatham House, within the Study Group on Global Economic Governance, taking stock of developments surrounding the G8 summit and offer insight into the significant shift in global economic power. A set of video commentaries will be produced by our G8 insiders and cross-posted on the website of CBC’s The National, Canada’s premiere daily news program.

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Disclaimer: This blog is solely intended to spur discussion, while the opinions expressed are those of the author(s) and do not necessarily reflect the views of CIGI, Chatham House or their respective Boards of Directors.