|
 |
|
ANNUAL GATHERING: Leaders participate in a working session during the G8 Summit at the Camp David presidential retreat in Maryland, the United States, on May 19 (CFP) |
Leaders of the Group of Eight (G8) major industrial countries got together again. As in the past three years, they discussed economic problems and the European debt crisis at this year's summit, held from May 18 to 19 in Camp David, the United States, and failed again to find a workable and united opinion on how to deal with the stubborn situation.
Critics said even when G8 leaders tried to avoid a fruitless meeting by issuing a new plan to guarantee Africa's food security, their declaration sounded like an empty promise.
This year's G8 Summit was held at a troublesome time for Europe. Greece faces a political deadlock brought on by its debt crisis and the austerity measures forced on it by the EU. Foreign investors are cutting their holdings of Italian and Spanish government bonds, putting even more stress on an already reeling euro zone. The host, U.S. President Barack Obama, set low expectations for the summit because of these difficulties. The summit indeed ended with few results.
According to a declaration issued at the meeting, leaders of the G8 agreed that bolstering economic growth and job creation was critical to global economic recovery. But they made no agreement on how to engineer such an economic revival.
Yao Ling, an expert on European studies with the Chinese Academy of International Trade and Cooperation, said the declaration expressed the shared concern of the eight nations on the current situation in Europe but made only meaningless suggestions.
For example, the declaration said the G8 affirmed their interest in Greece remaining in the euro zone while "respecting its commitments." G8 leaders also committed to taking "all necessary steps to strengthen and reinvigorate our economies and combat financial stresses," but acknowledged that right measures differ from country to country.
"We cannot see any practical changes from the summit yet," Yao said. She added the situation will depend on the coming Greek general election in June, and the economic policy of the new government.
Zhang Jian, a researcher with the China Institutes of Contemporary International Relations, described the declaration as a "worthless paper." But he is fairly optimistic about the euro zone's future. He pointed out that all Western nations, including the United States, would like to see a stable Greece stay in the euro zone because of their common interests.
Greece will not quit the euro zone, said Xiang Songzuo, chief economist of the Agricultural Bank of China. He explained that while the Greeks threaten to pull out, they actually are trying to get more help from the EU or cut off 40 billion euros ($50.3 billion) to 60 billion euros ($75.4 billion) of Greece's sovereign debt by playing this game.
Xiang said EU leaders are also worrying about the consequences of Greece leaving the euro zone because of possible contagious effects. If Greece defaults, it will break all loan agreements with its European neighbors. The contagion could spread to other euro zone members such as Portugal, Spain and Italy. Greek people would rather stay inside the euro zone, because once the country leaves, it will face immediate inflation, Xiang said.
Xiang added G8 leaders understand that if Greece leaves the euro zone, it will cause more problems than keeping Greece in. According to Xiang, the EU may need to pay 60 billion euros to keep Greece inside the euro zone. But if Greece pulls out, the possible consequences will cost at least 300 billion euros ($377.2 billion). Besides, such a pullout will impact the integration of Europe and create a political cost, which is hard to measure with money.
All observers said the EU still has a big economic challenge. For example, Greece's GDP in the first quarter of 2012 decreased 6.2 percent compared to the same period in 2011, and its unemployment rate stood at 21.7 percent. Spain's unemployment rate is 23 percent overall, and 48 percent among the country's young people.
Xiang pointed out if Europe's economic situation does not stop deteriorating, the United States will follow to see a high unemployment rate. To Obama, this might cost him his second term as president.
EU members have struggled to form a united stance to realize economic growth because of their different situations. France's new President Francois Hollande has argued for more stimulus measures for embattled euro-zone countries, albeit stimulus of a more temperate nature, while other countries, such as Germany, favor more austerity.
Xiang warned that China must be prepared for decreasing demand from Europe. He predicted it might take 10 years for the EU to recover from the current economic crisis, so China needs to realize economic transformation as soon as possible.
This year's G8 Summit was different because of its special focus on Africa. Several African presidents were invited to participate in the meeting. Obama declared on May 18 that the G8 was going to start a new plan on Africa's food security. Expressing welcome to the plan, observers commented that the G8 leaders must remember acting is more important than speaking.
The new plan included at least $6 billion in assistance and investment to Africa targeted at guaranteeing Africa's food security and dealing with famine in the Horn of Africa. Obama said the new plan, attracting both governments and private enterprises, will focus more on increasing technological input to Africa.
Currently, many African nations face food shortages. Last year, the Horn of Africa was hit by a severe drought that affected more than 120 million people. According to a UN report released on May 15, Sub-Saharan Africa is still in urgent need of economic growth, as 15 of the world's least developed countries are in this area. About a quarter of the 856 million people in the area are malnourished.
Ding Shengjun, a senior research fellow with the Academy of the State Administration of Grain, said Africa is important to global recovery. Without seeing sustainable economic growth in Africa, the global economy can be dragged down, he warned.
"We welcome developed countries' commitments to assisting Africa, but we would like to keep a low expectation to their promises," Ding said. "The bigger the expectation is, the bigger coming disappointment might be."
He said although developed countries have made many promises to aid Africa, they are rarely fulfilled. For example, the G8 promised to invest $20 billion to ensure global food security at their 2009 summit, but only a small part of the promised money was spent. Besides, some developed countries continued their high agriculture subsidies, putting great pressure on African farmers.
Ding added that Western influences are important reasons for serious food security problems in Africa. Many Africans live in a primitive one-crop economy based on a single crop such as coffee and sisal because of Western nations' past colonial policies. After many African nations became independent in the 20th century, they chose Western-style industrialization and ignored agricultural development. Many African countries import grain from other countries, said Ding, and when the export prices of their native products decrease, these African countries have no money to import food.
Ding believes Africa has the potential to fulfill its own food demand. He suggested African countries should place strategic significance on agriculture. He pointed out that some of these countries have good land and water resources as well as favorable climate conditions. According to the UN report, the Sub-Saharan region contains 60 percent of arable land on Earth.
Ding said developed countries should meet their commitments instead of just making empty promises. They should transfer their advanced agricultural technologies to African countries in addition to providing urgent assistance to them.
In recent years, China has helped African countries to plant rice and corn, and conducted many training courses to enhance the competence of African agricultural technicians, he said.
"External investment and assistance are important, but increasing these countries' ability to pursue agricultural development on their own is even more crucial," Ding concluded.
Email us at: dingying@bjreview.com | 
