The G8 summit

A world of troubles to tackle

The G8 leaders, meeting in Japan, have many challenges but few tools

THE leaders of the G8 group of rich countries kicked off three days of annual summitry hosted by Japan in Toyako on the northern island of Hokkaido on Monday July 7th. The remoteness of the venue—a bubble-era resort hotel overlooking Lake Toya—and an overwhelming police presence around the summit and Japan’s main cities appear to have prevented the scale of anti-globalisation protests and street violence that have disrupted recent gatherings of the world’s self-appointed steering group, including last year’s summit at Heiligendamm in Germany. But even without the protests, the leaders of Britain, France, Germany, Italy, Canada, the United States, Japan and Russia, half of them new to their job, will be aware of how much the world has changed since Heiligendamm.

At last year’s summit the price of oil was at less than half today’s $140 a barrel. The world price of rice and other grains gave few signs of doubling, threatening political stability in Africa and Asia and mocking earlier G8 commitments to reducing global poverty. Meanwhile, mention then of structured investment vehicles or Northern Rock to a G8 leader would have been met with a blank stare.

Pricey oil, the food crisis and the credit crunch: the new challenges either have their roots beyond the G8, or have quickly raced across borders. Either way, they highlight how the G8’s supposed goals work increasingly at cross-purposes. The call for lower fuel prices stands at odds with energy efficiency, cutting carbon dependence and tackling climate change—as does the drive against nuclear proliferation. Emphasising biofuels means less land for food production, leading to higher prices and hungry bellies. The desire of rich countries to avoid recession raises questions about their resolve to nip inflation. The rich-country club (plus Russia), representing a minority of the world’s population, appears ill-equipped for the challenges.

As host, Japan’s prime minister, Yasuo Fukuda, is determined to make the best of the contradictions. The summit’s opening day addresses poverty and higher food prices in Africa, with seven African national leaders invited. Japanese officials, among others, have floated the idea of a grain stockpile that might act as a buffer against volatile prices. Britain’s prime minister, Gordon Brown, proposes a doubling of food production in Africa. But talk is cheap: non-government organisations give warning that even development goals agreed by the G8 just three years ago at Gleneagles in Scotland appear to be slipping. The head of the Asian Development Bank points out that food is not solely an African challenge: over 1 billion Asians spend some three-fifths of their income on food.

On the summit’s second day, the G8 leaders huddle informally, but on the third the “outreach” championed by Japan continues with China, India, Brazil, Mexico, Indonesia, Australia South Africa and South Korea all invited to discuss carbon emissions and global warming. That brings together the world’s biggest emitters, but few concrete decisions are likely: after all, a deal to replace the Kyoto protocol, which expires in 2012, is not due until a UN conference in Copenhagen at the end of 2009. Still, China and India might agree to make bigger verbal commitments to cutting emissions—provided the West makes money and technology available.

Until now, these two giants have argued that big cuts were an inequitable way to deal with a carbon-dioxide concentration in the atmosphere that was not of their making, but because of earlier industrialisation. Yet the United States is reluctant to adopt emissions targets without commitments from the newest industrialisers. Ahead of the summit George Bush promised to be “constructive” on climate change. If there is any sign of progress on this matter, some G8 leaders may push for something firmer than the Heiligendamm promise to “consider seriously” cutting emissions by half by 2050.

These, then, are the global challenges that the G8’s leaders will attempt to address (while also finding time to condemn Zimbabwe’s Robert Mugabe and gauge progress on North Korea’s denuclearisation). If only electorates were behind them. President Nicolas Sarkozy of France has yet to regain the popularity and authority that propelled him to office. Mr Bush, unpopular at home, is nearing the end of his term. Mr Fukuda will probably not be around in a year’s time, with Mr Brown’s future only a little less assured. Popular restiveness against national leaders, even if it is not allowed to show itself in Toyako, puts the G8’s goals in even greater question.

Romney, McCain's `Logical' Choice, Must Overcome Primary Animus

July 7 (Bloomberg) -- The prerequisites for John McCain's running mate are clear: a Washington outsider with solid economic credentials who isn't associated with President George W. Bush, can fill the vice-presidential attack-dog role, help win Western and Midwestern states and cut into Democrat Barack Obama's fundraising advantage.

One candidate fits the bill: former Massachusetts Governor Mitt Romney.

The challenge would be in overcoming the animus that set in between Romney and the presumptive Republican nominee during the party's primaries.

Romney, 61, has ``no shortage of strengths,'' said Dan Schnur, who was McCain's communications director in 2000.

At the same time, though, ``McCain is a very visceral politician; he has very strong reactions both to people who he personally likes and dislikes,'' Schnur said. ``It was pretty apparent during the primary that he and Governor Romney did not hold each other in very high regard.''

Romney had a successful career as a private-equity executive, has never lived in Washington or held national public office, and his ties to the Mormon community and the business world give him access to donors.

Mormon Support

In addition, he was born in Michigan where his father was governor, and beat McCain by nine percentage points in the state's primary this year. Romney also has strong support in Western states such as Nevada, where his fellow Mormons made up a quarter of the voters in the state's January Republican primary, according to exit polls.

During the primary, Romney proved he was capable of going on the attack, a skill that is required of vice presidential candidates. McCain felt the sting of that aggressive streak before the Jan. 15 Michigan primary, when Romney characterized his comments about the state's job losses as a demonstration of ``pessimism about Michigan's future.''

On substance, Romney is strong in areas where Arizona Senator McCain is weak, in particular the economy. McCain, 71, said in December that he doesn't understand economics ``as well as I should'' and his lack of comfort is apparent on the stump.

Private-Equity Background

When asked in April about reversing his support for a federal home-mortgage bailout, he reached for a sheet of talking points. By contrast, Romney has a master's of business administration from Harvard University, ran the 2002 Salt Lake City Olympics, and made a vast fortune as co-founder of the Boston-based private-equity firm Bain Capital LLC.

A report last week in Politico.com that Romney could raise $50 million in 60 days is also feeding speculation that he is at the top of McCain's list.

Ron Kaufman, a political director in President George H.W. Bush's administration and a Romney campaign adviser, said the former Massachusetts governor is getting a close look as the economy displaces the war in Iraq as the most pressing concern for Americans.

``It's more about gas prices than fundraising and it's more about the economy not doing so well than anything else,'' Kaufman said. ``The most logical person in anyone's mind is Mitt Romney.''

For the moment, however, it is unclear whether these assets would be enough to overcome the residual bad feeling from a bitterly contested primary.

`Didn't Do Good'

``He beat the daylights out of us and certainly out of McCain,'' said Ed Rollins, the campaign chairman for former Arkansas Governor Mike Huckabee, who also ran for the Republican nomination. ``He spent the most money, attacked everybody more and at the end didn't do good.''

Romney also brings negatives, including his Mormon religion, which some of the evangelicals who form a core Republican constituency describe as a cult and a disqualifier for their support. They also have condemned what they regard as his shifting positions on issues such as gay rights and abortion.

``There's a lot of stuff out there that won't stand scrutiny,'' Rollins said.

That weakness plays into one of the biggest vulnerabilities of McCain, who is trying to mend fences with the Christian right after years of frayed relations. Last month, he met with the evangelist Billy Graham and a group of prominent Ohio Christian leaders.

Oversaw Layoffs

Schnur said Romney's apparent advantage on the economy may have a down side. During his unsuccessful 1994 run against incumbent Democrat Ted Kennedy for a Massachusetts Senate seat, Romney was criticized for overseeing layoffs while working at Bain.

``The Democrats could have a heyday talking about downsizing and lay-offs,'' Schnur said. ``It's the type of thing that in a difficult economic climate could be a real problem.''

Still, Romney is battle-tested and well-known, and has support in the fiscal-conservative wing of the Republican Party.

Neither McCain nor Romney have publicly discussed the possibility of a shared ticket. In May, however, the former Massachusetts governor was a guest at McCain's ranch in Sedona, Arizona, along with potential vice presidential nominees such as Florida Governor Charlie Crist and Louisiana Governor Bobby Jindal.

McCain's second-tier advisers have been arguing for Romney ``for a long time,'' said Vin Weber, who was Romney's policy chairman on the campaign. For the moment, though, ``I still don't see any evidence we have anyone'' in McCain's inner circle making the case.