THE G20 SUMMIT - WILL BE CLOSELY WATCHED
The G20 summit will begin tomorrow in Osaka, Japan. A two-day event, more than the meet itself, it is “side” meetings of the top leaders which will be more interesting.
With the morning newspapers around the world carrying the tragic picture of the drowned father and less than two-year old daughter, it would be too hard to shake this image off when Trump talks about "sustainable development."
The G20 has happened so many times under the shadow of bigger crisis and in that context, more than exchanging missiles or threats, it is good that there is the platform of G20 to at least exchange views. Just getting these leaders to talk to each other is in itself a big thing today.
Ahead of Trump’s meet with Modi, he has already said that India must withdraw tariffs from US goods and in that context, it would interesting to see how this “talk” between the two progresses.
But the spotlight will be on Chinese President Xi Jinping and Trump – they will hold talks in the midst of the ongoing full-blown trade war. Though both have agreed on a tentative truce as of now, it would be interesting to see how the meet between the two leaders of the biggest economies of the world goes.
Actually, all meets with Trump will be watched as he seems to have one spat or the other with most leaders - Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin.
Though there are few who have questioned the very utility of this G20 meet, there is enough evidence to show that this one meet does make a difference. When the G20 met in 2008, in the wake of the financial crisis, it was at this meet that the leaders of USA, UK and Europe together coined the term “quantitative easing” and later met once again to take this QE ahead. Infact it was after this 2008 meet that the G20 decided that the meet will become an annual affair and not the one in two-years kind of thing.
Post the 2008 G20 meet, in 2009 meet in London, the assembled leaders committed to fiscal stimulus packages worth a combined US$5 trillion in response to the 2008 global financial crisis. Central banks, like the Reserve Bank of Australia, also committed to aggressively cut interest rates.
The G20 does have an impact but it depends on the country, the policy area and whether there was an international economic crisis. In fact Ben Bernake in an interview stated that it does influence the thought process of Central Banks.
Yet, many a times, what does get achieved is behind the scenes, cut off from the main theme of the summit. Like this year, the theme of the G20 meet is to ensure global sustainable development. You think, the world will be interested in this when there is a trade war looming large and a growing sense of protectionist attitude taking over?
For the hosting nation, it is a matter of great pride to have leaders of 19 nations to come calling, all at the same time. Next year, the summit is scheduled to be held in Saudi Arabia. Wonder when India will get that honour?