Mainland in line for broader G7 in wake of Brazil crisis
Pressure was building last night for a global economic summit that would go beyond the annual meeting of Group of Seven leaders and would involve key developing countries, including the mainland, India and Brazil.
As world leaders gathered at the annual World Economic Forum (WEF) yesterday, senior officials said the recent float of the Brazilian real and fears that the yuan might be devalued had made it even more important that a high-level forum be convened aimed at trying to stem economic crises and to limit the effects of market turmoil.
Goldman Sachs International chairman Peter Sutherland, formerly director-general of the World Trade Organisation, said he would personally be pushing for much wider meeting of global leaders than at present provided by the G7.
'I am going to argue for the fact that the annual G7 summit is an inadequate response to global change,' said Mr Sutherland, who is one of three co-chairman of the WEF annual meeting this year.
'There should be a global summit . . . the argument is that the G7 cannot be expected to set the direction of the world economy alone.' The G7, which groups the United States, Canada, Japan, Britain, France, Germany and Italy, has traditionally been regarded as the premier grouping, with sufficient economic muscle to set the agenda for global economic issues.
However, some countries are now arguing that, as the trend towards globalisation takes hold, with increasingly more countries inter-dependent for economic and trade links, world economic issues need to be discussed in a wider forum.
The mainland, Brazil and India are three of the largest developing countries in the world and are seen as potential economic powers.
Mr Sutherland claimed he had seen growing support for his proposals, and he hoped to garner more at the forum's five-day meeting, which began yesterday.
The mainland has not yet been formally approached on the issue, but some officials suggested that Chief Executive Tung Chee-hwa might be approached to sound out Beijing.
Singapore Senior Minister Lee Kuan Yew and Malaysian Prime Minister Mahathir Mohamad, who are also attending the Davos meeting, are expected to be approached to form an Asean grouping that might be included in the summit.
Some countries are known to be opposed to the idea, as such a large grouping might find it difficult to find consensus at a summit that would last no longer than a week.
The proposal has also been criticised because the expectations of such a grouping might become unrealistically high.
However, supporters of the proposals believe that, with the increasing damage to economies as a result of contagion and market turmoil, many countries will become increasingly prepared to find a consensus on issues and hammer out solutions to limit further damage.