President Obama will announce Friday that the once elite club of rich industrial nations known as the Group of 7 will be permanently replaced as a global forum for economic policy by the much broader Group of 20 that includes China, Brazil, India and other fast-growing developing countries, administration officials said Thursday.

The move highlights the growing economic importance of Asia and some Latin American countries, particularly since the United States and many European countries have found their banking systems crippled by an economic crisis originating in excesses in the American mortgage market.

For more than three decades, the main economic group was the Group of 7 — the United States, Britain, Canada, France, Germany, Italy and Japan. During the Clinton years, Russia was gradually added, not because of the size of its economy, but to help integrate it with the West. Administration officials said the group would still meet twice a year to discuss security issues. But for practical purposes, the smaller group will become more like a dinner club that defers to the broader group on the economic issues that have dominated summit meetings for nearly three decades. The development, as Mr. Obama was hosting a summit meeting here for leaders of the Group of 20 — 19 countries and the European Union — also highlighted the lingering disparity between the elite group of mostly Western powers and the mass of poorer nations. For all of Mr. Obama’s talk about greater inclusiveness for countries like Brazil and China, the meeting in Pittsburgh remains dominated by the financial crisis that began in the United States and has preoccupied the old boys’ club.

The issue that many developing countries feel much more strongly about — knocking down barriers to trade, especially in politically sensitive sectors like agriculture — is barely likely to be part of the official discussions.

Rather, the packed agenda includes proposals to raise capital requirements for financial institutions, rein in executive compensation and reduce imbalances between shop-till-you-drop countries like the United States and export behemoths like China, Germany and Japan.

Even as Mr. Obama participated in his first Group of 8 meeting in July in L’Aquila, Italy, he seemed to have doubts about its suitability as a forum for solving the world’s problems. At the time, his aides characterized the session as merely a way station between Group of 20 meetings.

“We view this meeting and this discussion as a midpoint between the London G-20 summit and the Pittsburgh G-20 summit,” said Mike Froman, the president’s chief negotiator.

(via New York Times)

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Panelists on a discussion about efforts to fight global warming ahead of a key Copenhagen summit in December said it’s crucial for the G-20 take steps toward breaking gridlock over how emissions reductions will be financed.

At issue is how developed nations will compensate developing nations for their efforts to help cut greenhouse gas emissions. The Copenhagen summit is seen as a last best chance to implement a new treaty to replace the Kyoto Protocol, which expires in 2012.

“Without an adequate finance package in place by Copenhagen, there is no deal,” Alden Meyer, Director of Strategy and Policy for the Union of Concerned Scientists, said in a Thursday discussion organized by the U.S. Climate Action Network.

Speakers said they hoped leaders of the G-20 countries would give their finance ministers clear direction on setting up financing. David Waskow, Climate Change Program Director for Oxfam America said he hopes leaders instruct their governments to “seize the moment” on climate change.

“What needs to emerge here is a clear commitment, and a sense of energy and purpose on the way to Copenhagen,” Waskow said.

But Meyer said that “the finance ministers frankly haven’t done their homework” up to this point. Speakers were discouraged by the amount of progress so far and said G-20 leaders must establish a timeline and process to reach an agreement by Copenhagen.

Kumi Naidoo, chair of the Global Campaign for Climate Action, said that “everything is up for a fight in the next couple weeks,” and that it is too soon to throw in the towel.

(via G-20 Dispatches – WSJ)

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Optimism is the leitmotif surrounding the upcoming Pittsburgh Summit. Yet certain concerns remain. A year ago, as the dramatic recession unfolded around the world, many were convinced we were heading for a repeat of the Crash of 1929.

Due to measures adopted at the G-20 Summit in London last April, the worst threat in decades to the global economy was contained.

After a 9 percent reduction, global trade has rebounded, thanks to the injection of U.S.$250 billion in flexible, unconditional credit. Nearly 50 million jobs will be lost in 2009, but there are signs that the worst is past. Another U.S.$750 billion went to stimulate demand and stabilize the current accounts of many — particularly developing — countries hit by the drastic cutback in foreign trade and credit.

Read more at: http://www.huffingtonpost.com/luiz-inacio-lula-da-silva/g-20-pittsburgh-summit-re_b_295978.html

(image from wikicommons)

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