Roundup: G8 leaders get down to world economy

Global imbalances and other world economic issues took center stage as leaders from the Group of Eight (G8) leading industrialized nations kicked off their first working session Thursday.

Under the theme of "Growth and Responsibility," the rich countries' club is seeking a response to the changing structure of the global economy, most notably the rising power of emerging economies.

Although the G8 countries, which account for 63 percent of world gross domestic product (GDP) and 50 percent of worldwide trade in goods, are still of great importance in the world economy, the newly rising economies are claiming their share of influence on the world stage.

Germany, who holds this year's G8 presidency, said on its official website that the theme lives up to the G8's special responsibility to help create stable and reliable conditions for the global economy, but this responsibility now must be shared by the larger emerging economies such as China, India and Brazil.

As globalization progresses, the G8 will become less and less able to bear the burden alone, it said.

During their first working session Thursday morning, the G8 leaders tried to work out strategies aimed at achieving balanced worldwide growth and reducing global imbalances.

The current account deficit in the United States, insufficient growth in Europe and Japan, and growing foreign exchange reserves in Asia were among the issues to be picked up.

On the one hand, as the world's largest economy, the United States is troubled by a huge trade deficit. On the other hand, emerging countries are registering a large surplus, helping their foreign exchange reserves mount.

Analysts said the enlarging imbalance would threaten the world economy, but it is rooted in various reasons and to unwind needs global efforts.

Climate change, which would affect the sustainability of world economic development, had become the most heated issue ahead of this year's G8 summit, but Germany's proposal to set a fixed carbon emission reduction target is not likely to be adopted as the United States has termed the proposal "unacceptable."

Relieving Africa from poverty has topped the G8 summit agenda in recent years, and this year is no exception. With globalization underway, the less developed continent cannot be left behind.

However, three days before the G8 summit started, the World Bank said in a statement that though the eight developed nations made a pledge at the Gleneagles summit in 2005 to double development aid by 2010, they are lagging far behind on fulfilling their commitments.

As part of an outreach program, leaders from Egypt, Algeria, Nigeria, Senegal and South Africa will join the G8 leaders to rally fresh support for Africa.

Unlike the previous year, German Chancellor Angela Merkel stressed that the eight countries will not simply provide assistance, but plan to establish partnerships with African countries.

In an attempt to promote "good governance" and local financial industries, the rich countries were pledging to help African nations boost their own economies.

However, analysts pointed out that Germany's "new approach" is tantamount to "old wine in new bottle," which may divert pressure on the developed countries to provide aid to poor countries.

Later Wednesday, leaders from the eight industrialized countries will also discuss hedge funds, which have expanded very fast in recent years and now total 1.5 trillion U.S. dollars.

Concerned about the financial risks posed by hedge funds, countries led by Germany have been increasingly alert. But Germany's effort to establish stricter regulation of hedge funds was set to fail due to opposition from the United States and Britain, where most of the funds are located.

In addition, with key members of the World Trade Organization present, the world leaders will also try to break the deadlock in the Doha Round talks of the World Trade Organization.

However, any breakthrough to conclude the long-dragging negotiations appears out of reach.

Source: Xinhua