When the Group of Seven leaders meet in Ise-Shima, Mie Prefecture, on Thursday for the two-day summit meeting, the global leaders will spend much of their time discussing wide-ranging issues from terrorism and the refugee crisis to China, which has been asserting its military power in the South China and East China seas. Additionally, a great deal of time and focus will likely be centered on how to prop up the decelerating global economy, which was triggered by slowdowns in emerging economies and plunging oil prices.
Prime Minister Shinzo Abe, who chairs the meetings, will be tested for his leadership in bringing together the other six countries, as each member state has slightly different views on how to address the global economy and when China, the world's second-largest economy, is not a member of the G7.
"There is an increasing risk of economic slowdown and growing economic volatility," noted Abe during a press conference in London earlier this month. "The biggest challenge for the Ise-Shima summit would be how the group of seven countries can coordinate to counter against it."
First proposed by former French President Valery Giscard d'Estaing in 1975, the Group of Seven summits have provided a rare opportunity for global leaders to sit and talk about pressing global issues. Historically, the economy dominated the conference, especially because there was no mechanism to coordinate economic policies among the global powers.
Japan has been the member since the inception and so far hosted five summits, with the last meeting in Japan taking place eight years ago in Toyako, Hokkaido.
As this year's chairperson, Abe has been spending much political capital to help ensure he hosts a successful summit meeting, earlier this month traveling to Europe, where he met with Italian Prime Minister Matteo Renzi, French President Francois Hollande, German Chancellor Angela Merkel, as well as British Prime Minister David Cameron, to lay the groundwork for the meeting. He also met with European Council President Donald Tusk and European Commission President Jean-Claude Juncker earlier this month during his European tour.
At the summit Abe hopes to pitch economic measures that mimic his three arrows of economic policies — fiscal and monetary policies and structural reform — with an emphasis on a bold public spending measure to shore up the global economy. The prime minister secured clear support for fiscal stimulus from France and Italy during his European trip. Yet a rift over increasing government spending remains among Japan, the U.K. and Germany.
During talks with Merkel, Abe suggested that each country should boost their stimulus spending. Yet the German chancellor, who is known for fiscal discipline, hinted that Germany is already doing enough and said domestic consumption has been whetted by the massive inflow of refugees. She was noncommittal in prioritizing aggressive fiscal spending, while emphasizing the importance of simultaneous implementation of fiscal stimulus, structural reforms and monetary policy.
Cameron also echoed Merkel and emphasized the importance of structural reform. While noting the need for G7 countries to coordinate for global economic growth, Cameron said a balanced approach to implement three arrows by reflecting the situations of each country.
Despite these differences, during a Diet session last week, Abe said that the G7 countries agree on the need for fiscal stimulus and noted that the G7 does not decide things by majority vote.
Japanese government officials also expressed optimism. Masatsugu Asakawa, vice minister of finance for international affairs at the Finance Ministry, told the Nikkei Shimbun last week that coordination among the major powers means each country can mix policies depending on its situation.
The global leaders are also likely to discuss issues involving corruption, following the release of the Panama Papers, which showed that the rich, famous and powerful have been hiding their assets in tax havens. During the recent anti-corruption summit in London this month, Cameron called for global efforts to fight corruption and Downing Street said it plans to expose the names of foreign property owners.
Yet G7 leaders are also tasked to differentiate themselves from the Group of 20, an international meeting for the leaders and central bank governors from 20 economies, including China, India and Brazil. China will be the chair of this year’s G20 meeting, and the group has similar positions on addressing the global economy.
At a February meeting in Shanghai, the G20 finance ministers and central bankers said that they would use “all policy tools” — monetary, fiscal and structural policies — to shore up the global economy. They also warned against countries that do not comply with the OECD standards on tax transparency at a meeting in Washington D.C. in April.
On the diplomatic and security front, the G7 will work on an action plan against terrorism, which was promised during the G7 Foreign Ministers’ Meeting last month in Hiroshima, following heinous terror attacks in France and Belgium. Japanese media reported that the plan is likely to call on sharing information from Interpol, using airline reservation information, as well as cracking down on terrorism financing.
The leaders are also expected to talk about Syria and the refugee crisis. Ahead of the summit meeting, Japan announced that it would receive 150 Syrian exchange students over the next five years starting in 2017. Tokyo apparently made that pledge to dodge criticism that Japan accepts too few refugees and asylum seekers as its standards are too high. The group of seven educational ministers last week also adopted the “Kurashiki Declaration,” in which the countries pledged to step up their efforts in providing education for refugee children and those who are in dire poverty.
Additionally, Abe also hopes to address the issues of North Korea and China as this is the first time in eight years that the summit will be hosted in Asia. In the years since the last summit, China has been beefing up its military arsenal and has been conducting reclamation projects in the South China Sea. North Korea also has escalated tensions by conducting more nuclear tests and launching missiles despite continuous international calls against them.
However, the European G7 members would appear to prefer to not provoke China as they have strong economic ties with the world’s second-largest economy. Also, Beijing does not directly pose a threat to them at this time. The communique is likely to follow last year’s by mentioning the maritime security issue in the East and South China seas without naming China.
Japan is also expected to bring up maritime security at the outreach meeting during the summit. Tokyo invited non-G7 countries to participate in the outreach meeting, including Asian countries such as Laos, Vietnam, Indonesia, Bangladesh, Sri Lanka, as well as Oceana’s Papua New Guinea.
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