Tokyo: The lacklustre global economy should take centre stage as world leaders gather in Japan this week, but with no agreement likely on igniting growth, Barack Obama’s visit to the atomic-bombed city of Hiroshima looks set to capture the limelight.
A gathering Chinese slowdown, weak oil prices and the looming threat of Britain’s exit from the European Union will provide the backdrop for the meeting of the Group of Seven.
Waiting in the wings for the club of rich democracies is the familiar litany of problems: Islamist terrorism, the disintegrating states of the Middle East and Europe’s refugee crisis.
Each member of the G7 will bring their own issues and their own solutions to the gathering at Ise-Shima, 300 kilometres (200 miles) southwest of Tokyo.
But differences on how to breathe life into the world economy whether to boost spending, as favoured by hosts Japan, or to follow Germany’s prescription and cut debt mean a unified response is unlikely to emerge.
“The reality is the global economy is weak, uncertain and unbalanced,” said Matthew Goodman, senior adviser for Asian economics at the Center for Strategic and International Studies.
“And so that’s their really top issue how to get growth going.”
A weekend meeting of G7 finance and central bank chiefs in Japan could only agree that individual nations should act in their own best interest, highlighting the difficulties they face in forging policy consensus.
Japanese Prime Minister Shinzo Abe, the summit host, has struggled to jump-start his own economy after more than three years in office.
That’s despite a kit of unconventional policy tools including unprecedented easing and a negative interest rate that has also been tried by the European Central Bank.
Abe reached out to European peers to join together in increasing fiscal spending as a way to boost growth only to get the cold shoulder from Germany and Britain, who favour austerity.
The gathering will find easier consensus in geopolitical issues, such as the fight against Islamist terrorism.
That charge will be led by France’s President Francois Hollande, whose country was the victim of a series of deadly jihadist attacks last year.
Finance ministers last weekend agreed to boost cooperation in cracking down on the financial networks that support extremists.
German Chancellor Angela Merkel is likely to push for concerted action to stem the tide of refugees fleeing conflict in Africa and the Middle East.
“These are problems that can only be solved by the international community together,” a German government source said. “It’s a collective responsibility.”
But the limitations of the exclusive club the US, Britain, Germany, France, Italy, Canada and Japan will once again be laid bare.
Members blackballed Russia in 2014 after its annexation of Crimea and the world’s second-largest economy China has never been invited to join.
Mitsuru Fukuda, a political scientist at Nihon University in Tokyo, said the summit risks highlighting the limits to its influence.
“There are so many issues that cannot be solved without the participation of China and Russia,” he said. The gathering is the G7 swan song for Barack Obama, who leaves office in January.
Regardless of what comes out of the meetings, the summit will be marked in the history books because of his planned visit Friday to Hiroshima, where American servicemen launched the world’s first nuclear attack on August 6, 1945.
Obama has already ruled out any kind of apology, which would be highly contentious in the US, but the sight of a sitting US president in front of the shattered building near the bomb’s ground zero will be heavy with symbolism.
AFP