- The Washington Times - Friday, November 14, 2008

There may be as many agendas as there are chairs at the table when President Bush convenes this Saturday’s summit of leaders of the world’s major industrial and developing economies to deal with the fallout from the world financial crisis.

Leaders from the Group of 20 nations are likely to agree that governments around the world must do more to stimulate their economies and keep their markets open to trade and investment.

But President Bush — with President-elect Barack Obama looking over his shoulder — is resisting calls from French President Nicolas Sarkozy and other European leaders for more intrusive government regulation of the market and calls from China, Russia and other “emerging markets” for an overhaul of the major international financial institutions such as the International Monetary Fund and World Bank.

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Mr. Sarkozy, a prime mover behind the summit, has insisted that the G-20 leaders must “rewrite the rule of the game.” British Prime Minister Gordon Brown, who is pushing a plan for international regulators to oversee the globe’s 30 biggest financial firms, called the crisis that inspired the summit “the birth pangs of a new global order.”

Emerging economic superpowers Brazil, Russia, India and China — the so-called BRIC bloc — say they are victims of a crisis caused by market and regulatory failures in U.S. and European housing and banking markets and are demanding a bigger say in the debates in the leading international financial institutions.

The BRIC countries do not intend to be “mere coffee drinkers” at the Washington summit, Brazilian Finance Minister Guido Mantega said last week.

Analysts said Mr. Bush’s opposition to more radical moves and his lame-duck status make it unlikely that the daylong summit will produce major breakthroughs.

“There is no doubt that the European expectations are much too high,” said Steven Schrage, a specialist in international business issues at the Center for Strategic and International Studies.

See related stories: G-20 takes the spotlight amid crisis; G-20 to weigh global banking oversight and D.C. is ground zero for summit, protests, rockers

Said Robert Weissman, executive director of Essential Action, an advocacy group that tracks development issues, “It’s a fantasy to suppose that the Europeans or anyone can impose a global financial regulatory system on the Americans. That’s just not going to happen.”

Mr. Bush himself has studiously played down what this weekend’s gathering can accomplish. He agreed to host the summit only after heavy lobbying from Mr. Sarkozy and rejected the idea of holding the meeting in New York. Administration officials describe the summit as the first of many such gatherings, with its main purpose to establish “working groups” to identify and debate ideas for reforms.

In a Wall Street speech Thursday, Mr. Bush gave an unapologetic defense of capitalism, open trade and free markets.

“The answer is not to try to reinvent that system,” he said. “It would be a terrible mistake to allow a few months of crisis to undermine 60 years of success.”

The leaders will gather for a White House dinner Friday night before Saturday’s summit to be held at the National Building Museum.

For some of the invitees, including Russian President Dmitry Medvedev and Japanese Prime Minister Tara Aso, it will be their first trip to Washington since taking office. Numerous side meetings with Bush administration officials and advisers to Mr. Obama are expected.

Arkady Dvorkovich, economic adviser to Mr. Medvedev, confirmed Thursday that the Russian delegation would be meeting with representatives from Mr. Obama’s economic team while in Washington.

With the major industrial nations either stalled or sliding into recession, the G-20 leaders will be under pressure to present a united front and announce at least a few concrete actions, analysts say.

One likely outcome: a pledge from the assembled participants to coordinate and expand national stimulus programs to head off a global recession.

See related story: Group of 20 to take spotlight amid crisis

But with stock markets plunging around the world and with problems in the financial sector now spreading to such critical sectors as auto manufacturers, Mr. Schrage said the time is not right for more ambitious reforms.

“Having some broad restructuring at this point would kind of be like calling the fire chiefs together in the middle of a five-alarm fire and trying to restructure the fire department,” he said.

Some have tried to bill the summit as “Bretton Woods II,” modeled on the 1944 gathering at a New Hampshire resort that set the terms for the postwar economic, monetary and regulatory system for decades to come. But organizers took three years laying the groundwork for the first Bretton Woods summit, and the United States and Britain at the time could largely dictate the outcome.

This weekend’s summit was put together in a matter of weeks, and the interests of far more players will have to be taken into account.

IMF Managing Director Dominique Strauss-Kahn told the Financial Times that expectations for the summit “should not be oversold.”

“A lot of people are talking about Bretton Woods II. The words sound nice, but we are not going to create a new international treaty,” he said.

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