Jean H. Lee
SEOUL, South Korea — A strong sense of pessimism shrouded the start of an economic summit of rich and emerging economies Thursday, with President Barack Obama and fellow world leaders arriving in Seoul sharply divided over currency and trade policies.
The Group of 20 summit, held for the first time in Asia, has become the centerpiece of international efforts to revive the global economy and prevent future financial meltdowns.
Hopes had been high that the Group of 20 – encompassing rich nations such as Germany and the U.S. as well as growing giants such as China and Brazil – could be the world forum for hashing out an economic way forward from financial crisis.
But agreement appeared elusive as the summit began, divided between those such as United States that want to get China to allow its currency rise and those irate over U.S. Federal Reserve plans to pump $600 billion of new money into the sluggish American economy, effectively devaluing the dollar.
Obama told fellow leaders that the U.S. cannot remain a profligate consumer using borrowed money and needs other countries to pull their weight to fix the world economy.
“The most important thing that the United States can do for the world economy is to grow, because we continue to be the world’s largest market and a huge engine for all other countries to grow,” Obama said at a news conference.
Brazil’s president, Luiz Inacio Lula da Silva, warned that such policies would “bankrupt” the world.
“If the rich countries are not consuming and want to grow its economy on exports, the world goes bankrupt because there would be no one to buy,” he told reporters. “Everybody would like to sell.”
Concerns about trade gaps, protectionism and a currency war threatened to overtake momentum for forming global solutions to the financial crisis created at last year’s London summit.
So far, officials can’t even agree on the agenda, much less a draft statement. Government ministers and senior G-20 officials have labored for days without success to come up with a substantive joint statement to be issued Friday, G-20 summit spokesman Kim Yoon-kyung said.