G8 Summit gives world leaders much food for thought
The current global economic crisis, with runaway inflation, dominates 3-day annual summit of world-leaders.
The leaders of the world’s self-appointed steering committee, the G8 group of countries, commenced their annual summit this week in Japan. Previous summits including the last one held at Heiligendamm in Germany have proved contentious and have often been marred by anti-globalisation protests and civil violence.
This meeting was sparred the violence, perhaps only by its remote location on the island of Hokkaido. The leaders of Britain, United States, Canada, France, Japan, Germany, Italy and Russia, could perhaps feel the global pressure and public fear in the ambience of their surroundings.
Indeed, a year can prove a rather long-time, with the world changing much since the last summit.
At the head of current international concerns is the global economic downturn and rising inflation, threatening the onset of a damaging recession in US, Europe and beyond. In the advent of globalisation, the world has become exponentially smaller. With world markets intrinsically tied to one another, one economic downfall can have large ramifications throughout the world.
The US, with the world’s largest economy, is a prime example of this. The Federal Reserve has been desperately trying to ward off economic recession in the country. With a lack of money in circulation, particularly between banks lending to each other, this has led to a credit crunch that was immediately felt in the UK but also sent shivers across other dominant markets.
At the fulcrum of the current headache is without a doubt the runaway oil price. With oil prices reaching a record $140 a barrel, remarkably this means that prices have doubled since Heiligendamm a year ago. With a major reliance on fuels in the US and Europe, not to mention the fuel-thirst of fast developing economies such as India and China, the huge rise in oil prices has had a significant bearing on spending and economic confidence of the general public throughout the continents.
With prices threatening to reach $200 a barrel any time soon, there has been a major pressure on world leaders to work on ways to control prices and promote alternatives to carbon-fuels. Almost inevitably, OPEC have been pressured to increase supply of oil reserves, with Saudi Arabia, Iraq and other major oil producers benefiting greatly from the oil-surplus in their accounts.
More worrying than fuel perhaps, the price of rice and other grains has seen massive raises, threatening stability in Africa and Asia, and serving a massive blow to the much-publicised G8 commitment at tackling world poverty. Ban Ki-moon, the UN secretary general, claimed that high food prices are “turning back the clock on development gains”, under-pining fears of major powers.
Rising food prices has led to an increase in malnutrition in poorer countries and even in public protests by beleaguered citizens. There have been calls for doubling of food production in Africa, creating world stock-piles of food and increasing shipment of supplies to worst-affected areas.
However, often economic measures are beset by trade-offs. Lower oil prices, will undoubtedly run counter to reducing carbon dependency and tackling the greater issue of climate change.
In turn an energy crisis, may counter the drive against nuclear proliferation. The much touted need for bio-fuels, conversely results in less land for food production, which will only increase food prices.
The so-called richer countries are determined to prevent economic recession, seemingly over their aim of tackling rising inflation. This trade off is a corner-stone of the functioning of regional economies and the global economy, and the balancing act is at best delicate.
Nonetheless, when that “balancing act” from the G8 countries and other global powers has such wide-reaching implications, such as inducing potential hunger in Africa and Asia, then the tables are turned. However, commitments and mere talk by major powers to help more vulnerable nations is not new and not enough. Some have warned that even development goals for the poorer countries set three-years ago by the G8 are at risk.
The current food and fuel crisis is augmented by the all-frequent motion of reducing carbon emissions. The final day of the 3-day summit, was dominated by carbon emissions and global warming. In addition to the 8 majors, the worlds other biggest emitters were invited to the table for discussions. The Kyoto Protocol, which expires in 2012, has been marred by controversy, with the world’s largest emitter, the US, reluctant to commit to CO2 emission targets. Amidst pessimism and criticism at the lack of genuine action, the G8 have reaffirmed their common vision of reducing carbon emission by 50% by 2050.
Here comes further trade-offs and economic-mongering that makes agreements and global targets so difficult to set, China and India, the most worrisome of emerging countries in terms of carbon emissions, will unlikely go beyond even verbal commitments without a return of money or incentives from the West.
The stance of India and China is clear, they will not sign-up to an inequitable method of dealing with current atmospheric problems, which was largely caused by earlier industrialisation. Why should their own much-delayed developments suffer, just because the Western belly is now full of industrialisation and advancement?
The cyclic dilemma intensifies as the US is unlikely to commit to emissions targets, if rapidly emerging economies are left to develop at will.
Clearly, the next year is a delicate period for the G8 and other major countries. Not dealing with such economic shortfalls can conceivably lead to a much more serious global crisis across the world. Therefore, it is understandable why runaway fuel and food prices have dominated the global agenda.
Economic concerns masked other global political unease such as dealing with the controversial governments in North Korea, Iran and Zimbabwe.
This entire global economic conundrum, begs the question whether this current crisis could have been anticipated, avoided or at least in part mitigated?
Although the doubling of prices and food shortages has caught the majority of analysts and world leaders by surprise, key factors indicate that this was brewing and may yet dominate the world scene for decades to come.
The global population is largely expected to reach a remarkable 9 billion by mid-half of this century. The current booming population has created a tremendous pressure on the limited resources of the world. With a growing population come more mouths to feed, the need for more land and the need for more fuel.
This need by a booming population is exasperated with new significant and rapidly expanding economies in India and China. This pushes what were already stretched global reserves to breaking point and only worsens global warming onset by the global powers before their time.
As the world has grown, the fight for reserves has become more crucial. In turn, it has made the delicate balance of maintaining a world order ever more difficult and with increasingly graver consequences.
If the current world population, excepted to grow by almost 50%, is unable to sustain stability today, then the generation of tomorrow, which will suffer from even-more depleted natural resources, less land for agriculture and greater demand for food, may reach critical a breaking-point unless significant motions are set in the years to come.