Oil prices, the weak dollar and the emergence of China as possible risk factors form the bulk of the agenda of the two-day Group of Seven summit that has begun in London.
But inequalities of wealth will also come into focus as financial leaders from Brazil, Russia, India and China – emergent market economies known collectively as BRICs, their acronym – join the talks for the first time. The G7 combined with Russia account for around two thirds of the world’s GDP. But they form barely one in seven of the world’s 6.2 billion inhabitants. The weak dollar and the huge US deficits are widely seen as a threat to the world economy, expected to grow nearly four percent this year. But US Federal Reserve chairman Alan Greenspan was upbeat. “Besides market pressures which appear poised to stabilise, and over the long run possibly to decrease the US current account deficit and its attendant financing requirements, some forces in the domestic US economy seem about to head in the same direction.” Efforts to stabilise the dollar are seen as crucial, but the summit will also be looking closely at China’s economic situation and ways to reform its dollar-pegged currency. China’s economy clocked 9.5 percent growth last year and could be in danger of overheating. Beijing is coming under growing pressure to revalue the yuan against the dollar. The summit is also likely to call on major oil-consuming countries, including China and India, to introduce energy-saving measures. And Britain is calling for moves to boost development in Africa.