G7 Summit in Japan: Talkfest or Concrete Actions?

In the wake of the Panama Papers and many other significant political events around the world , the 42nd G7 summit was held on May 26-27, 2016 at Ise-Shima in Japan. 

Was it – like often before – just another polite meet and greet of some of the most powerful political leaders in the world (including having taken family photos with everyone happily smiling like the one above)? Or, were there any tangible outcomes which would matter and make an impact? Any signs of strong leadership? 

A Colorful Agenda

The leaders of the seven G7 member states as well as representatives of the European Union (its president is a welcomed participant whereas in 2014 the G7 declared that a meaningful discussion was not possible any longer with Russia in the context of the G8) discussed topics spanning from dropping oil prices, the highly unpopular Transatlantic Trade and Investment Partnership (TTIP), global terrorism, the upcoming referendum on the United Kingdom′s membership of the European Union (“Brexit“), territorial disputes in the South China Sea (“Sunnylands Declaration“), the ongoing large-scale movements of migrants and refugees, the flare-ups of the Ebola virus epidemic in West Africa, the climate change (“Paris Agreement“), concerns over North Korea and Russia to discussing even Donald Trump and the promotion of women′s empowerment in various areas of life.

No doubt, these are some of the most pressing topics and challenges of our times. Saying that, can we really expect any precise results and actions when so many “hot“ topics are covered in just two days (and even taking into consideration the multiple, associated preparation meetings)?

So, what was discussed with which outcomes?

Main Topics and Results

Global Economy and Trade

The 32-page summit declaration addressed as a main concern the risk of a contraction of the global economy stimulated by a slowdown in emerging economies. The countries, however, were and still are of different opinion when evaluating options on how to accelerate growth. Japanese Prime Minister Shinzo Abe, for example, stressed the need for flexible fiscal policy to sustain economic recovery. Whereas German Chancellor Angela Merkel has been skeptical about public spending to boost growth. In the end, and at least showing public agreement (for whatever it might be worth), the G7 committed to market-based exchange rates, i.e. avoiding "competitive devaluation" of their currencies and as such opposing crazy exchange-rate moves. Regardless, the G7 clearly failed to endorse coordinated action on global growth. In consequence, their talks and statement will have little or no impact on reviving a struggling world economy.

Foreign Policy

The G7 leaders discussed foreign policy issues including counter-terrorism, the Middle East, Russia and Ukraine, North Korea, and China. Again, North Korea was demanded to fully comply with U.N. Security Council resolutions to stop nuclear tests and to avoid any "provocative actions". Russia was condemned for its "illegal annexation" of the Crimean peninsula from Ukraine. Concerns were also raised over the territorial disputes between China, Japan, and several other Asian nations concerning the East and South China Seas.
In regard to Britain's referendum on June 23 on whether to leave the European Union, a potential exit was considered as a serious risk to global growth. An assessment which by the way is supported by a very recent survey which had been carried out by Ipsos Mori for the Observer in which nearly nine out of 10 economists stated that an exit from the European Union would have have negative consequences for the UK economy.

Climate and Energy Policy

Given significant changes to the international energy landscape, including low oil prices and geopolitical uncertainty, ensuring energy security remains a pressing issue for the international community.
On climate change, the G7 said they aim to put into effect by the end of the year the Paris climate agreement (a new international framework to succeed the Kyoto Protocol), in which almost 200 nations agreed a sweeping plan to end global dependence on fossil fuels to limit rising temperatures. Again, no specific and binding actions were mentioned.

Health

The G7 leaders supported World Bank′s launch of the Pandemic Emergency Financing Facility (PEF) to protect the world against pandemics. During the Ebola crisis it became clear that there was no effective international system in place ready to respond quickly to the threat of a pandemic, which pose a serious risk to global health and economic security. Japan, as being a good host country leading by example, committed the first $50 million in funding toward the new initiative. Also for the first time – and that′s pretty remarkable - the group has spoken in favor of universal access to health care for everyone in the world. For the time being, a concrete plan and money are missing.

Migration and Refugees

Managing the refugee crisis is a critical development challenge given its protracted nature. Therefore "the G7 recognized the ongoing large scale movements of migrants and refugees as a global challenge which requires a global response," the participating countries declared in their statement. Although the G7 leaders continued "We commit to increase global assistance to meet immediate and long-term needs of refugees and other displaced persons as well as their host communities,“ (again) no concrete measures have been agreed upon.

Assessment And Final Thoughts

Although national leaders at the G7 summit – by traditionally looking for the smallest common denominator, did not reach an agreement on an economic growth program (and other key topics...), the meeting still was a relevant forum for chief decision-makers to exchange and to generally align; even when having disagreed on certain issues.

Saying that, in a world of ever-increasing speed and disruption the latest G7 summit may be viewed as another missed opportunity to get things moving faster and more effectively. Also – and especially - for the other half of global GDP that was not even represented at the meetings in Japan.

What do you think? Do we still need G7 summits in today′s times? If yes, should they be different? How would you address the world′s most pressing topics? Please join the conversation by leaving a comment below.

Best regards,

Andreas von der Heydt

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Andreas von der Heydt is the Head and Director of Kindle at Amazon in Germany. Before that he held various senior management positions at Amazon and L'Oréal. He's an Internet, marketing, startup, and leadership expert as well as a management coach, author, and keynote speaker. His latest book is about what makes a future leader. Andreas also founded Consumer Goods Club. He worked and lived in Europe, Australia, the U.S. and Asia. Andreas enjoys blogging as a private person here on LinkedIn about various exciting topics. All statements made, opinions expressed, etc. in his articles only reflect his personal opinion.

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photo: Reuters