Business, Finance & Economics

G20 to act as global economy caretakers

Updated:

PITTSBURGH — The Group of 20 will take on a more pronounced role in the global economy as leaders work together to keep the steady but slow economic recovery on track and prevent a similiar meltdown from occurring again.

The group, which accounts for 90 percent of the world's economic output, will leave emergency economic support in place until a recovery is secured and said it would establish tougher rules on bank capital by 2012, according to a draft communique obtained by Reuters.

The agreements appear to give rising powers such as China more clout in exchange for their commitment to help rebalance the world economy. Leaders will also announce that the G20, which includes China, Brazil, India and other fast-growing developing countries, will become the permanent council for international economic cooperation, eclipsing the Group of Eight.

The summit is entering its final day, following numerous protests around the city on Thursday. The final version of the communique will be issued Friday evening.

There are no official figures yet available on how many arrests were made of demonstrators trying to disrupt the G20 meeting but some preliminary media reports put the number at close to 20. Police mobilized in various Pittsburgh neighborhoods to dispel the demonstrations, most of which were taking place without permits and ranged from the anti-capitalist march to the anarchist gathering to those in favor of legalizing marijuana. Media reports and video footage documented altercations between protesters and police, some of which involved pepper gas and the firing of rubber bullets.

Usually the world leaders are protected from the protests, and that was true again this time, though one shortlived protest made its way to Oakland, a Pittsburgh neighborhood where Russian President Dmitry Medvedev had been invited Thursday afternoon to receive questions. Not far from where the Russian premier was making his appearance, he and other world leaders later gathered for dinner at the Phipps conservatory.

In Oakland, Medvedev was experiencing the other certainty, aside from protests, associated with G20 summits: fielding tough questions.

In his hour-long visit at the University of Pittsburgh, Medvedev was receiving an unexpectedly tough grilling from, not reporters, but a group fluent in his language and the politics of his country. Medvedev took questions from several dozen students who are from Russia studying at the university or are U.S. students taking part in its Russian and European Studies program.

They got right to the heart of things when the Russian president arrived an hour late amid tight security. The room was hot, the questioners restless and the Kremlin-accredited media looked on with wonder.

The students wanted to know just what the Russian president had said in New York about imposing sanctions on Iran if the country did not back down on its nuclear ambitions. The press widely interpreted his remarks at the United Nations to mean Russia agreed with the U.S. that there was the possibility that toughening sanctions might be necessary.

Not much was cleared up.

“I have this feeling as though I am still in the meeting with Barack Obama,” Medvedev joked.Then he proceeded to “clarify” that what he meant was that “when all instruments have failed, one can use international sanctions. Sometimes it’s a must.” But he also said positive incentives to encourage Iran to be open and transparent were preferable and: “I do not think sanctions are the best way to get results.”

The students pressed on. What would future relations be between Russia and Georgia in the wake of the war that erupted in 2008 between Russia and the former Soviet republic of Georgia?

Medvedev said there was no dispute with the Georgian people and that there have been years of shared traditions and friendship between the countries. But he didn’t deviate from the Russian script when he said the “period of aggression” could only be blamed on Georgian president President Mikheil Saakashvili.

“I will not deal with President Saakashvili because he committed a crime against his own people,” he said. Things must have been a tad uncomfortable when both were in New York at United Nations-related sessions.

He had kinder words for Obama who recently made the controversial decision to scrap the missile defense shield in Europe, a position that is radically different from the previous Bush administration. “I’m very comfortable in communications with the president of the United States. We are people of one generation with him,” said Medvedev. He and Obama shared the same legal profession and he even was reading articles that were written by Obama when the American president was editor of the Harvard Law Review. He suggested he would have paid more attention to them had he known the outcome of their careers.

He took a swipe at the Bush administration when he said Obama “doesn’t preach as a mentor.” He suggested Obama has made bold decisions that reverse positions taken in the Bush administration, though he insisted the change in plans on the missile defense system “is not pro-Russian. It is pro-American.”

Just as times have changed dramatically in Washington, the Russian leader said the direction of his country has changed since one of his predecessors, Nikita Khrushchev, was in Pittsburgh at the University 50 years ago — a time before he or many of the people in the University Commons Room were born.

“I wouldn’t say we are politically close and that I share many of his views,” he said.

His answer to one very direct question about what he considered to be the most important thing in life proved the point when he answered, “Love. What can be more important than love?”

Hard to imagine Nikita Khrushchev saying that.