Crisis Parallels: what G7 leaders discussed on the first day of the summit

On Thursday in the Japanese city of Shem ended the first day of the summit of the G7 countries. For the third consecutive time the leaders of the major world powers meet without Russia, who left the group after the Ukrainian crisis. Japan, as the hostess of the event, outlined in advance the desired agenda: the main topics of the summit this year were the role of investment in the restart of economic growth and security in the Asia-Pacific region. During the first session, the leaders exchanged views on a business dinner. By Friday, the leaders of the “seven” must formulate a final communique.

All in 2008

On the first day of the Prime Minister of Japan Shinzo Abe made his guests to the presentation, which compared the current economic situation in the world with what it was eight years ago during the previous global financial crisis. The Prime Minister drew his colleagues ‘ attention to new growth pre-crisis trends in the global economy and on the number of dangerous coincidences.

For example, the price index for raw materials in 2008 and in 2015 fell by the same amount in 55%. The state of the economy of emerging powers on key indicators (growth, investment, exports and GDP) are also largely consistent with what was in the mid 2000-ies, writes with reference to presentation the Financial Times.

Abe used to love to spend the scariest historical analogies. For example, in January 2014, speaking at the summit in Davos, Switzerland, the politician recalled the centenary of the outbreak of the First world war. The rivalry between the German and British empires in the early twentieth century vaguely similar to the current economic and political friction Japan with China, said the Prime Minister.

To overcome the problems in the economy, the world powers needed to stimulate growth, e.g. by investing in infrastructure projects, said Abe now. In his opinion, desired spending on it should be at least $200 billion in Japan Itself already engaged in a project to create 20 thousand jobs and the training of specialists in the countries of the “third world”, the value of which reaches $6 billion.

Presentation made on world leaders desired effect, and call Abe to stimulate economic growth by increasing government spending was met with skepticism, says the FT: his doubts about the proposed Japanese Prime Minister program viskazali the heads of the governments of great Britain and Germany, which maintain a policy of fiscal austerity. Abe is unlikely to succeed “export” the experience of its policy to inject money into the economy, argued ahead of the meeting, head of the economy Department and the policy of Japan IMEMO Vitaly Shvydko. The task of the Japanese Prime Minister, according to the expert, is only protecting its position in the face of colleagues.

However, at the meeting with journalists, Abe drew attention to the unity of the leaders of the G7. “We took into account that in that time we have failed to respond adequately to the crisis, because we initially did not attach importance to risk, — said the Prime Minister. — Now, after comprehensive discussions, we recognized the serious risks that threaten the world economy”.

On Friday it is expected the publication of the agreements in the format of “Economic initiatives of ISA-Shem”, the name of the conference venue. According to Japanese news Agency Nikkei, the program definitely will include early offers Abe to stimulate demand, and specific steps to boost global economic growth the leaders of the “seven” will discuss again.

Caution about China

On Friday, it is expected and the joint statement of leaders on the issue of the expansion of the people’s Republic of China in the East China and South China seas.

Japan is concerned about the military preparations of China in the South China sea, where Beijing disputes over the waters with the countries of South-East Asia, and in the East China sea. China claims the Senkaku Islands, which technically belong to Japan. Since 2003, China has been producing oil from offshore platforms directly from the Maritime borders of Japan.

On the proposal of Japan, the expansion of China became the main political theme of the summit. Edition The Japan Times reports that in their final communique, the G7 leaders “expressed concern” about the situation in the region. However, China explicitly stated statement will not, emphasise the sources.

Communiqué may partially repeat the statement of the foreign Ministers of the countries “the seven” on Maritime security, adopted in mid-April in the eve of the summit. In that document also discussed the construction of artificial Islands in the South China sea. The past few years, China is creating artificial Islands on the reefs waterlogged place, placing there naval bases and airfields. Name China the statement also has not sounded.

Before the start of the G7 summit, the official Beijing expressed its disagreement with the discussion of Maritime security in the Asia-Pacific region. “Whatever the content of the meetings, as long as its members took a principled and honest position and not allow double standards, — said Tuesday the Minister of foreign Affairs of China Wang I. In particular, it is important for leaders not to take actions that could provoke regional tensions”. State news Agency of China “Xinhua” spoke more harshly: “The “seven” in order not to look outdated, and do not undermine global stability, it is necessary to do their work and not point the finger at others, fueling conflicts,” wrote the state Agency.