G-20 Summit Makes Room For New Heavyweights
LIANE HANSEN, host:
This week, the city of Pittsburgh plays host to some two dozen world leaders. It's time for the Group of 20 Summit meeting of industrial and emerging nations.
These global meetings are usually dominated by traditional economic powers: United States, Japan and Western Europe. This time, the emerging power houses want to play a bigger role. Roben Farzad is going to raise the curtain on the G-20 Summit. The senior writer for Business Week is a frequent guest on our show. He's in the studios of member station WCVE in Richmond, Virginia. Welcome back, Roben.
ROBEN FARZAD (Senior Writer, Business Week) Hi, Liane. How are you?
HANSEN: I'm well, thank you. Tell us who wants a bigger role, a louder voice and why.
Mr. FARZAD: The developing world wants to get its fill. To butcher the cliche: emerging economies - Brazil, Russia, India, China, Indonesia - they have seen capital flow to them disproportionately over the past few years. And now, they're looking to cash in that capital and to put their mouths where the money is.
HANSEN: Mm-hmm. They have the fiscal stability that some of the traditional powers don't. So, are they likely to get what they want? Or will there be push-backs from the United States and the other larger nations?
Mr. FARZAD: I think the large nations realize that these emerging economies have emerged to a certain extent, but certainly there's a lot of back and forth and there are chips that you can play. The United States wants to throw in elements of more cooperation from developing countries on curtailing global warming. The Western European countries, France especially, wants to see the United States rein in investment banker compensation.
Everybody seems to bring an agenda. And additionally, I think everybody is looking for unanimity on the message of economic recovery. Exit strategy is something you're hearing a lot out of this, even more so than Iraq in 2005, in that you have had unprecedented monetary and fiscal stimulus the world over for the past year. And how are we going to get out this now that we're seeing hesitating signs of recovery? So rhetoric is an important part, as well.
HANSEN: In terms of tighter regulation and executive compensation in the financial industry, President Obama really took the industry to task when he spoke earlier this week. Do you think the G-20 will take up those issues?
Mr. FARZAD: The G-20, this is where you're seeing tension between Europe and the United States, because ultimately this brings up an issue of sovereignty. I mean, look, no one has anything against overpaid bankers, especially in light of Wall Street accepting all this taxpayer money. The problem is when the Obama administration has to go home, when Senators have to go home and explain this to their constituents, it looks like a breach of sovereignty.
And you have to be careful how much of that influence are you going to cede to an international multilateral power. And in the end, I think the Obama administration would rather have much more autonomy over global compensation of bankers and appointing a compensation czar, than I think ceding that to an international body.
HANSEN: Roben Farzad is a senior writer for Business Week and he joined us from member station WCVE in Richmond, Virginia. Thanks, Roben.
Mr. FARZAD: Liane, it's my pleasure.
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