The Heiligendamm Process: Extending the G8-G5 Dialogue

July 10, 2009

Yesterday, in their joint declaration, G8 and G5 countries committed themselves to work together to address international governance challenges. To facilitate continued dialogue on issues such as investment, intellectual property and climate, the leaders announced an extension of the Heiligendamm Process – renaming it the Heiligendamm-L’Aquila Process (HAP) – the structured dialogue among the officials of the established industrialized countries  and the major emerging economies of the global South – China, India, Brazil, South Africa and Mexico.

In this exclusive video, Andrew F. Cooper interviews Ulrich Benterbusch, Director of the Heiligendamm Dialogue Process at the OECD. Since the 2007 Heiligendamm G8 Summit, Mr. Benterbusch has been the primary facilitator of this program that has allowed for confidence building and partnerships among G8 and G5 states, development of common policy towards critical global issues, as well as spill-over affects for the international financial institutions.

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The Latest on Currency: Lula Steps Up at G8

July 9, 2009

Lula2Gregory Chin
Senior Fellow, CIGI

On the eve of their meeting with the G8, the G5 group of major emerging economies – Brazil, China, India, Mexico and South Africa – discussed the use of their own currencies to settle trade accounts among themselves, Indian Foreign Secretary Shivshankar Menon told reporters. According to Menon, the suggestion to explore this possibility came from Brazilian President Luis Inacio Lula da Silva.

Menon wanted to clarify that this does not mean the G5 having a new currency or alternative reserve currency. China, Russia, Brazil, France, and to a lesser degree India had expressed an interest in the talks between G5 and G8 leaders due on Thursday including debate on seeking long-term alternatives to the US dollar as the global reserve currency. Brazil and China have, of course, already established arrangements to settle a portion of their trade in their own currencies.

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G5 Leaders Shifting the Balance

July 9, 2009

G5

Andrew F. Cooper
Associate Director and Distinguished Fellow, CIGI

While the BRIC group of states have grabbed a great deal of attention with their landmark leaders’ summit in Yekaterinburg, Russia, 15 June 2009, their expanded G5 alter ego has been a significant force at this week’s G8 Summit in L’Aquila.

Coined by Goldman-Sachs, the original BRIC investment acronym has moved from a laudatory account of the rise of 4 big economies (Brazil, Russia, India and China) to a geo-political reality. Such a shift indicates the extent to which we are moving into a more contested global order. In many ways, the BRIC countries are more interesting for their differences than their similarities. Brazil and India are robust democracies. Russia is a managed democracy. China is a one party state. India has a fast rising population. Russia is in serious demographic trouble with a sharply reduced life expectancy. Brazil and Russia are resource rich. India and China are resource dependent.

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Up Up and Away: Hu Leaves G8 Before it Begins

July 8, 2009

Hu

Gregory Chin
Senior Fellow, CIGI

Some air has just been let out of the G8 balloon. Chinese President Hu Jintao has left the G8 Summit in L’Aquila Italy, to return home to deal with domestic unrest in China’s far western autonomous region, Xinjiang – leaving him unable to attend the Day Two meetings between the G8 and the “G5” emerging economies. Hu has left behind Dai Bingguo, State Councilor to represent China’s top leader.

Dai Bingguo is no slouch inside the Party command. In addition to being the government executive that is most responsible for overseeing the country’s foreign affairs, Dai is the director of the office of the Party’s powerful Leading Small Group for Foreign Affairs, and the office of the Party’s Leading Group on National Security. He is a key official in the new Strategic and Economic Dialogue between the US and China, and a point person on China’s relations with Africa and the Arab world. Dai Bingguo is clearly a safe pair of hands both inside the Party and government hierarchy. Read the rest of this entry »


G8 L’Aquila: Deflecting a post-G8 Moment?

July 7, 2009

Growing antipathy in the G8 process, largely as a result of the successful operation of two G20 summits, has constrained the Italian hosts of the 2009 session to be held in L’Aquila this week. Various formations of multilateral meetings seem to be crowding out the traditional central decision-shaping role of the G8 club.

In this video, Gregory Chin interviews Dr. Paola Subacchi – Research Director, International Economics, Chatham House – to discuss the momentum of the G20 process, how the Italian presidency has managed this competition, and the possibility of a G2 condominium of power between the United States and China.

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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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The Global Power Game is Changing: Exit Strategy for G8?

July 4, 2009

Vanessa Rossi

Senior Research Fellow, International Economics, Chatham House

Ball games have always been a popular metaphor for managing global affairs. This suggests that the next decade may described as a Wimbledon epic in which the existing tennis champion and the young contender dominate the tournament for a generation.

As the US and China slug it out for the prize again and again, the semi-final losers, Europe and Japan, will have to sit and watch from the sidelines along with those not yet big enough to join the hard-hitters. When some more familial sporting activity is needed, then G20 can take to the pitch – but where does this leave G8? With NATO taking care of defence issues, what will Europe, North America and Japan aim to achieve with this additional forum? Is it simply being kept on life support for the duration of the current economic and financial crisis?

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