November 10, 2010 10:27
G20 member countries are divided by a host of key issues ahead of a summit in Seoul starting on Thursday, the Financial Times says.
Gideon Rachman, a columnist for the paper, said the G20 are splitting along "seven major axes that divide the world." In his assessment one such axis is "surplus versus deficit countries," pitting the U.S., which has a huge trade deficit and wants trade imbalances artificially controlled, against China and Germany, which have big trade surpluses and say they are the results of global competition and should not be controlled. There is the divide of "manipulators vs. manipulated." The U.S. accuses China of manipulating its currency by deliberately undervaluing the yuan to spur exports, and India agrees, but China claims the U.S. is guilty of manipulating market conditions by printing dollars, and Germany has recently voiced support.
"Tighteners vs. splurgers" is another divide. At the height of the financial crisis the U.S. and the U.K. supported pump-priming through deficit spending, but Germany was against it. Now, even the U.K. has shifted to fiscal tightening mode. And under "democracies vs. autocracies," Rachman points out that of the G20, China and Saudi Arabia are the two unambiguously undemocratic countries. "West vs. the rest" pits the old G7 of western countries and Japan against emerging countries and former colonies on issues such as global warming.
Then there is "interventionists vs. souverainistes," with the U.S. and China both against any form of authority above their national government, while the EU supports a new international order. And finally there is "big vs small," in the sense that the 170 countries that are not part of the G20 question the inclusiveness of the group.
"As the leaders of the world's biggest powers gather ... their Korean hosts talk hopefully of the organization as a 'steering committee of the world.' But there are so many different hands grabbing for the steering wheel that the G20 will be lucky to survive without a serious accident," Rachman writes.
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