G-20 Toronto: A Breeze of Progress

The town of Huntsville, especially during a Canadian summer, is normally known for its low-key residents decked out in cut-off jeans tossing another hot dog on the backyard patio grill - and smilingly offering it to a visitor.

During the June 26-27th weekend, however, this once obscure, now better known town played host to dozens of world leaders who gathered there for the annual G-20 summit of major world economies. It co-hosted the event along side Toronto, a successful city popular for its ethnic mix, civility and economic activity on the shore of sparkling Lake Ontario.

The agenda was ambitious. It spanned issues that included the pressing need among the leading Western countries to reduce their national debt loads to foster job growth; increased aid to the Third World; China’s intentions on whether it will revalue its yuan currency to benefit its exporting trading partner; etc. In addition, one expert insists that the parlay convinced the rising super power that the Anglo-American capitalist model is doomed.

Politically, it was also a chance for Japan’s new prime minister to introduce himself. He is still the manager of the world’s second largest economy, although some analysts predict that the island’s rising super power neighbour will exceed it this year. Other leaders who boosted their name recognition hailed from India -- and South Korea.

Overall, experts insist that the confab was certainly not a failure; however, it merely mimicked Canada’s gentle mid-year breeze as a mild force for change rather than blowing like the powerful north wind farther north. Some won, others came to a draw or left disappointed, as at most sprawling international events where goals broadly overlap -- but differences exist -- in agendas and personalities, which also explains the protesters and arrests. Business and Technology writer Robert L. Scott offers readers this exclusive, detailed review.

Winners and Losers

The famed Reuters news agency cut through all the rhetoric, promises and ceremony when it offered a sober analysis of the summit’s victors or otherwise.

On its final day, an official statement said that the participants’ priority was boosting the wishy-washy Western economic recovery after the downturn of 2008 and preventing deeper deficits, but without hindering growth and job creation. As for specific outcomes:

Canada’s 50-50 Result

Canada’s conservative Prime Minister Steven Harper argued that his country’s banks escaped the world financial crisis without government bailouts. He opposed a global tax on banks to create financial rescue packages for those carrying toxic or non performing debt burdens. The G-20 only mentioned the tax idea -- giving him a win. Harper also won support for his concrete deficit and debt reduction numbers. However, the Canadian public and commentators hit Harper over the whopping $1 billion price tag for security.

The United States: Obama as Half Winner

President Barack Obama started the summit with much prestige. Just before it started, the Congress agreed to pass a bill promoting the most far reaching financial rules in 70 years, which Obama championed. But he achieved little during his northern neighbour’s gathering. He conceded to the Europeans, whose debt crisis and plunging currencies caused them to value budget austerity. Obama feared that it would undermine the US’s fledgling recovery. He also rejected many provisions in the Doha round of trade liberalization talks and called for their reform when more Americans fear that globalization is shipping their jobs overseeas. Obama met little substantive opposition.

China Touts its Own Beijing Model:

What an ironic twist from China. Before the summit, it finally de-pegged its yuan currency relative to the greenback so the latter strengthened about 5% against the dollar, apparently giving into world demands for a revalued currency that would make imports cheaper. But in Canada, Chinese officials successfully scotched the final communique’s praise for this action. They feared that the compliments would only create pressure for more revisions. This is a sign that Beijing will continue to stick to its weaker yuan policy that has underpinned its export surges.

Indian scholar Brahma Chellaney, author of the international best seller “Asian Juggernaut: The Rise of China, India and Japan,” is a professor of strategic studies at the Center for Policy Research in Delhi. His analysis is that after the G-20 summit, the Chinese will tout their own development model with greater confidence. They perceive the Anglo-American capitalist model’s decline and especially the end of USdominance.

After all, Beijing’s officials and policy wonks observe -- often smilingly -- that for years, the so called Washington Consensus that London and world financial institutions, e.g. the International Monetary Fund (IMF) and World Bank (WB) endorsed was Western orthodoxy. It called upon economies to liberalize, deregulate, privatize, get the state out of the way, cut taxes, ensure “fiscal responsibility” through higher interest rates to deter frivolous borrowing, over capacity, speculation, etc.

However, when the two Western powers encountered distress in 2008, they abandoned their own “hands off” advice in favor of governmental bail outs of failing industries such as Detroit car makers and greater regulation of the money markets.

Chellaney adds that the 2008 global crisis mortally wounded the U.S., or so believes China. The former’s budget deficit forces it to sell treasury bonds to -- of all countries -- communist China so that Washington has liquidity. With China propping up America, although the latter is technically the world’s sole superpower, the balance of power and leverage overall has shifted to China. It can even politicize the situation, claims Chellaney, for instance using its power to neutralize USsupport for Taiwanese independence, claiming the South China Sea as its core -- exclusionary -- interest, etc. Overall, China concludes that its own Beijing Consensus strategy of an autocratic state directing a limited market is better, thinks Chellaney. That framework has conferred robust growth and stability such that the global crisis barely dented it.

As Chellaney was quoted as saying in the Scotsman, “Despite perpetual talk of an overheating economy, China’s exports and retail sales are soaring, and its foreign-exchange reserves now approach 2.5 trillion dollars, even as America’s fiscal and trade deficits remain alarming.”

The Other Asian Rising Star: India

It is a sign of the times that the Canadian meeting witnessed the presence of two Asian stars, i.e. China and India.

Harper and his Indian prime ministerial equal, Manmohan Singh, talked on the summit’s sidelines about increasing bilateral business ties and Indo-Canadian relations overall.

“Canada and India are developing the tremendous potential and our relationship is rapidly expanding with commercial, cultural and educational ties. We look forward to working with prime minister Singh to further capitalize on our shared strengths,” Harper later said.

India exercised its soft power, too. Summit participants praised Singh for his vision and skill in promoting almost 9 percent economic growth in India and even compared the turbaned Sikh to bald, Hindu Mahatma Gandhi. Bollywood star Akshay Kumar accepted Harper’s invitation to be the guest of honor and was a hit.

Japan: Stagnating Sumo Economy

As for Tokyo, it opposed the global bank tax before arriving, so welcomed its partners declaring it merely optional. Japan maintains that its national deposit insurance scheme is a substitute. However, experts say that it will fail to honor the developed countries’ pledge to cut deficits by 50 percent over three years and stabilize or reduce government debt-to-GDPratios by 2016. Yes, the communique welcomed Japan’s recent fiscal reform and growth plans; however, it referenced its “circumstances,” meaning its comparatively very shaky finances.

Japan Prime Minister Naoto Kan was warmly welcomed. Many noted that he is the fifth national leader in three years, however. Experts say that such weak, transient leadership hinders the struggling sumo economy from recovery and from playing a wider global politico-strategic role, too. It looks like Japan is a fading star.

South Korea’s Lee Wins as Next Host

In a sense, South Korea President Lee Myung-bak was in a smaller spotlight because he will host the dignitaries at the Seoul G-20 summit slated for November in Seoul. In Canada, he laid the ground work when he insisted that South Korea will coordinate the effort among members to create a global financial safety net at that latter parlay. He underscored that many developing, smaller nations suffer from the impact of volatile currency fluctuations and claimed that Korea will speak for them. Before the Seoul summit, Lee will host 100 global CEOs to explore methods to boost private investment, global trade and corporate responsibility.

On the sidelines, Lee garnered his colleague leaders for support in condemning North Korea’s deadly attack on the Cheonan, a South Korean naval corvette, that killed 48 sailors in March. President Obama and Japan’s Kan most dramatically stood shoulder to shoulder with Lee. The two Northeast Asian leaders also pledged to have a “future oriented relationship” this year, which marks the 100th anniversary of Japan’s colonization of Korea. Protesters With a Different Vision

They shouted “We are people, too!” as one slogan to communicate their rejection of the G-20 summit and more generally the policies of major economies.

This collection of anti-capitalist groups; trade unions; community, civic, student, environmental and women’s organizations charged that the summit participants favor corporate profits over socio-economic equality; that they exploit workers, especially in low wage countries where many multinationals produce value added goods; and threaten the environment.

After resorting to violence in Toronto that stunned the host nation and its guests, up to 900 protesters were arrested, embarrassing host Harper and denting Canada’s squeaky clean image. Asupport march then ensued in Montreal on July 1, Canada’s national day, under the auspicies of the Anti-Capitalist Convergence to criticize the Toronto police’s alleged heavy handedness. Some sported tins cans around their necks, soliciting donations to pay the legal bills of their Toronto allies.

One unionist, Francis Lagace, claimed that “Those people were arrested without knowing why. They were detained in horrendous conditions ... This is a clear violation of human rights in Canada.” But Danie Royer, an ACCspokeswoman, admitted that after spending between 24 and 48 hours in jail, most detainees were released without charge.

Every G-20 economic confab sees such feverish protests -- and often violence. It is a testament to how the G-20 summit, which centralizes world leaders and policy making decisions, has become the main venue for left wing agi-tators. It remains to be seen whether China, with its growth above all, damn the corruption, worker and ecology strategy also draws their ire. If so, how will the prickly dictatorship -- determined to win respect -- handle voices that it cannot control?