The Group of 20, or G-20, is a coalition made up of the countries that make up 85% of the world economy. In light of the ongoing crisis, this year’s G-20 conference is especially important. It could result in globally coordinated bailout action, new power for the IMF, and new global regulations.
However, if personal and political dramas continue to play out the way they have been, the G-20 summit could accomplish nothing at all (see this Reuters article for details of the issues). Here are 5 global presidents whose actions during the G-20 could weigh heavily on the world’s economic future:
1. Taro Aso, Japanese PM
Belief: Strong fiscal action is needed for recovery. Stimulate government spending to get the economy back on its feet.
Stance: Paternal. Long-suffering Japan knows better than everyone else how recovery works. Other countries, like the US and Germany, are still in economic-recovery diapers. Japan should be the new global stimulus leader.
Why to watch him: Japan usually isn’t this visible in the global conversation. Will Aso get his way, or assume new global status? Time will tell.
2. Nicolas Sarkozy, French President
Belief: Public spending will lead to unsustainable recovery. An internationally coordinated stimulus is a bad idea because countries like France already carry heavy debt. Instead, up regulation on international tax havens and financial companies, and let the private sector heal itself. He also has a China problem. According to the Financial Times, Sarkozy says that “Chinese opposition to the blacklisting of unco-operative tax havens was now the major sticking point for France.”
Stance: Spastic. Sarkozy said he’ll walk away from the table if the group’s action doesn’t satisfy him. He fancies himself the next Charles de Gaulle.
Why to watch him: Sarkozy may offer the most entertainment value of all the leaders involved this year. He is also a strong voice for continental Europe, which doesn’t want to spend its way out of the crisis, and may block expensive initiatives.
3. Barack Obama, US President
Belief: To get people spending money again, the government has to create and spend more money. So should the world.
Stance: Kumbaya. Obama wants everyone to agree and get along, so that appropriate action can be taken; a.k.a, spending.
Why to watch him: He may be diplomatic, but will he actually help accomplish anything?
4. Hu Jintao, PRC President
Belief: Protectionism will sink the global ship even further. The G-20 must encourage global trade. A different global currency–not the dollar–would also be a nice touch.
Stance: Frustrated. Looming increased protectionism would put even more of a damper on China’s economy. Moreoever, the United States is devaluing China’s $740 billion in US dollar reserves by enthusiastically printing more money.
Why to watch him: His country has most of our money.
5. Dmitry Medvedev, Russian President
Belief: Russia will cooperate with whoever benefits Russia. It recently agreed to a nuclear disarmament pact with the United States, but pals around with China on the topic of creating a new global currency.
Stance: Schmoozy. Medvedev wants to swing deals that will benefit Russia in the medium term, but his alignments are issue-based, not universal. Russia will stand on its own.
Why to watch him: Russia is a powerful nation. If Medvedev aligns himself with causes outside of the US interest, watch out.