Amid rising tensions in Asia, Europe and the Middle East, the high-profile annual G-7 summit of the world's rich countries held in Japan's quiet Ise-Shima town on May 26-27, 2016, rhetoric apart, "didn't deliver much," observers said at the end of the meeting.
While the G-7 in its final statement said "global growth is our urgent priority", it did nothing more than endorsing what has been variously described as 'pick-and-mix' approach rather than to seriously address the real problems that have refused to go away since the global financial crisis cropped up in 2008.
In fact, as reported by international news agencies from Ise-Shima, 300 kilometres southwest from Tokyo, Japanese Prime Minister Shinzo Abe argued that the global economy faced the risk of a "crisis", and compared the situation with that in 2008 when Japan last hosted the summit - months before the collapse of Lehman Brothers.
Bloomberg News, however, pointed out in a report that Abe's observation was questioned by West Germany's Angela Merkel who was supported by the IMF chief Christine Lagarde. Taking the hint, Abe later rephrased his statement while talking to reporters: "We shared a strong sense of crisis." This seems to suggest that they were more interested in 'pick-and-mix' approach than attacking the real problem head on.
Incidentally, Merkel's refusal to accept Abe's observation on global economic "crisis" boomeranged on herself only three days later on May 31 when Reuters reported from Bonn that Germany 'has slipped out of the top most competitive economies in the world, falling two places to 12 from last year'. It quoted a study conducted by the Swiss business school IMD on the issue.
Reuters quoted IMD Director Arturo Bris as saying that the study, based on a worldwide survey of 5,400 managers assessing 342 criteria, showed that a diminished assessment of Germany's government and economy's performance were the main reason for the drop. "The biggest danger for Germany is self-satisfaction. If it rejects that, it will get back into the top ten," he said.
Hong Kong came top in the survey this year and was followed by Switzerland and the United States.
DIFFERENT ECONOMIC VIEWS: The patchy, pick-and-mix attitude of the G-7 leaders at the conference was noted by economists who either attended the meeting or were kept informed by relevant quarters. They were, to say the least, unimpressed. Senior Global Research Economist at the research house Capital Economics, Andrew Kenningham, thus summed up: "We know there are different views on fiscal policy but the statement simply concludes that fiscal policy should be implemented 'flexibly' in order to 'promote growth'". "That really says, nothing at all," he added.
Apart from China (South China Sea) and Russia (Ukraine and Syria), two other issues dominated the text of the statement. These were the so-called 'Brexit' or UK's exit from the EU and the influx of refugees from the war-torn Middle East that has really created havoc in Europe and threaten to destabilise the social fabric there. They thought in unison that the 'Brexit' would reverse the trend towards greater global trade and investment and the jobs they create and a serious risk to growth.
British Prime Minister David Cameron, who is against leaving EU, told a press conference that "the communiqué is very clear about the economic dangers and economic risks" of Brexit.
However, the grouping - the US, Germany, Japan, Britain, Italy, France and Canada - found an easy common ground on the refugee problem, quickly agreeing that it was 'a worldwide problem'. The statement categorically said: "The G-7 recognises the ongoing large-scale movements of migrants and refugees as a global challenge which requires global response."
About 1.3 million refugees sought asylum in the European Union - they were mostly from conflict-ridden Syria and Iraq - more than a third of them in Germany. No doubt, it is a gigantic problem of global proportion and needed attention from all concerned. But none in the Group attempted to find out geopolitical compulsions behind this sudden refugee explosion in a region which was stable for decades in the past. Instead, Merkel informed newsmen that the G-7 had decided to dedicate its attention this year "especially to Iraq" - one of the chief sources of the tide of migrants fleeing conflict and seeking refuge in Europe.
It was not discussed at the G-7 meeting that the current refugee influx from the Middle was directly caused by prolonged conflicts in the region as a result of direct political interference of the US and its Western allies. Apparently it never occurred to them that these conflicts were in essence the offshoot of Israel's occupation of Palestinian territories that was promoted and sustained by the US and its allies since the end of WWII.
SABRE-RATTLING AND RISING TENSIONS: The G-7 partners discussed a lot about China (and Russia) without actually naming China and as such without participating in the meeting of the foreign ministers, Beijing became the focus of target shooting mostly for the US and Japan and somewhat less by others. Curiously, it reflected America's Asia pivot declaration targeting China and its statements on sovereignty over large part of South China Sea creating a conflicting situation. Washington argued that it is in the interest of world trade and maritime safety in a region where trillions of dollars worth of cargoes pass through annually.
The G-7 foreign ministers had urged all states to refrain from "such actions as land reclamations and building outposts on South China Sea for military purposes." This, of course, directly refers to China's activities in some of the disputed islands in the region, but it did not mention that Beijing had been telling the world that such land reclaiming in some of the islets was initiated and completed by the Philippines decades ago and the western powers, the US included, did not say anything. But all hell broke loose when the Chinese began doing it in the last couple of years.
On its part, China assured its neighbours that whatever they were doing was to ensure the safe passage of maritime cargo and not to create any hindrance to it. While the nations with dispute with China may have become suspicious about the Chinese actions, the US Asia pivot declaration and subsequent intervention of its naval forces in the Asia-Pacific region has certainly generated more tensions in the region. This seems to have placed G-7 and China in a somewhat conflicting mode. Besides, the US efforts to strengthening its already considerable military presence in the region and its heightened military cooperation with Japan, the Philippines and Taiwan are not helping the situation either.
Russia is no longer part of the group as the US had abandoned the G-8 in March 2014 because of Kremlin's role in Ukraine. While the G-7 member-countries lampooned Russia and its president Putin, they fired a broadside across China's bows over its policy concerning South China Sea without mentioning it by name.
As every action has an equal and opposite reaction, the G-7 statement angered China and Beijing called its top diplomats from the groups' capitals for consultations. Chinese foreign ministry spokesman Hua Chunying said this G-7 summit organised by Japan and it is "hyping up the South China Sea issue and the exaggeration of tensions is not beneficial to stability in the South China Sea." Brunei, Malaysia, Vietnam, Taiwan and the Philippines have territorial disputes with China in the South China Sea while Japan and China are involved in a separate dispute in the East China Sea.
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