Summit does little on economic woes

With the Group of 8 having wrapped up its summit Wednesday, it won’t be long before workers take apart the large eco-building constructed here with recyclable material for the hordes of journalists covering the annual session. Soon it will be as if the building never existed.

Many may feel the same way about this year’s G-8 meeting.

President Bush and leaders of seven of the other wealthiest nations face a triple whammy of economic woes: a global credit crunch, soaring food prices and spiraling oil costs.

But in three days of tackling a range of other issues -- among them global warming, aid to Africa and Zimbabwe’s election violence -- there was little in the way of fresh initiatives on how to get the world’s economy back on track.

“I’m not sure what economic benefits will be gained from” the summit, said Melanie Bowler of Moody’s Economy.com in London.

Like many economists, she looks at G-8 summits more as a “meeting place of the minds” than as a gathering where concrete steps are necessarily taken. Still, after reading the G-8’s declaration on the world economy, which expressed confidence in long-term growth, she was struck by the fact that it barely referred to the credit crunch and didn’t even mention the U.S. dollar, which many see as an important factor in the global economic woes.

The largest visible accomplishment at this year’s G-8 was the group’s agreement on halving greenhouse gas emissions by 2050, including first-time support from Bush for a long-term target for combating global warming. Yet they didn’t get heads of major developing countries such as China and India to buy into it, leaving the hard negotiating for later.

Before leaving the plush and heavily secured mountaintop resort where the G-8 leaders met for three days, Bush declared that the agreement represented “significant progress,” although environmental groups sharply disagreed.

Some observers said that at the least, the G-8’s action would help propel efforts toward an international treaty on reducing carbon gases, which certainly would have huge repercussions for the global economy. But that won’t give any near-term relief to people around the world struggling with inflation, rising joblessness and declining wealth from sagging stock markets.

The G-8 consists of the Group of 7 leading industrialized nations and Russia. Though the G-8’s influence has waned as economic fortunes have shifted east, its members -- the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia -- still account for about 60% of the world’s economy.

In one declaration this week, the G-8 said it had “strong concerns” about the price of oil, which has doubled since the 2007 summit.

Japanese Prime Minister Yasuo Fukuda, when asked what significant actions were taken in response, mentioned the G-8’s recommendation to set up a forum to focus on energy efficiency and technologies. The group also called for “concerted efforts” to address supply-and-demand pressures, and for increased transparency of the commodity futures market, where many believe speculators are driving up the cost of crude.

But if the G-8 didn’t do much on oil, that’s partly because the most important players in the petroleum market -- namely, the members of OPEC that control supply -- weren’t at the table. Some of the countries behind the fast-growing demand for oil were invited to the summit, notably China and India, but their leaders made only a relatively brief appearance.

Philip Clapp, deputy managing director of the Pew Environment Group in Washington, who has attended G-8 summits over the last decade, pointed to another reason the leaders at this year’s meeting “didn’t accomplish a lot in terms of concrete steps.” Many of them are new to the G-8, struggling with a low popularity rating at home, or both.

“It’s hard for leaders like that to make tough decisions and set aggressive goals,” Clapp said. He noted that previous gatherings had yielded more tangible results, for example in 2005 when leaders pledged $50 billion in new assistance for Africa, a commitment that was reaffirmed this year after criticisms that the payments were well behind schedule.

Still, Clapp sees a lot of value in the annual event.

“It’s the only setting in which leaders of the world’s biggest countries spend three days together face to face,” he said.

Jun Takase, who has been following G-8 summits for the last 20 years, was more generous in grading this year’s performance. The political science professor at Japan’s Nagoya University of Foreign Studies gave the group a B, in part because of its response to the food crisis.

Takase gave credit for $10 billion that the G-8 had committed since early this year to support food aid and boost farm output.

“That’s a lot of money in a very short time,” he said, adding that he was also pleased the G-8 appointed a task force to monitor its commitments on food.

Other summit observers complained that the G-8 leaders left out important elements of the food crisis, such as biofuel and its effect on grain prices and farm subsidies in their home countries.

Takase acknowledged these shortcomings. But then again, he didn’t have high expectations of the summit, which he says should be seen for what it is: leaders from a group of major countries willing to come together to address the most important issues of the day.

“It is better than unilateralism,” he said.

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don.lee@latimes.com