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The G-7 Ise-Shima Summit: What's at stake (Part 1)

Kashiko Island, center, located near other islands in Ago Bay in Shima, Mie Prefecture, is seen in this photo taken from a Mainichi Shimbun helicopter. (Mainichi)

On May 26 and 27, Japan will convene the G-7 Ise-Shima Summit in Mie Prefecture, assuming the presidency of the summit of industrialized nations for the sixth time. Participants are expected to jointly draft a prescription for issues ranging from an uncertain economic future to terrorist attacks that rocked the world, a refugee crisis and maritime security in the South China Sea, where tension lingers. Below, the Mainichi Shimbun takes a look at the summit venue and main topics expected to surface on the negotiation table.

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ISE-SHIMA

Japanese Prime Minister Shinzo Abe chose the Ise-Shima district as the venue for the G-7 summit out of a desire to put Japanese culture on display for a global audience. Mie Prefecture stepped forward as a candidate to host the summit at a late stage after prompting by the prime minister's office, and won out over other leading candidates.

"It's a very good location for people to come into contact with Japan's spirituality," Abe stated when announcing in June last year that the summit would be held in the Ise-Shima area. Abe regularly visits Ise Grand Shrine at the beginning of the year, and the shrine has strong connections with the Imperial Family.

In April 2007, during his first term as prime minister, Abe chose to hold the 2008 summit in the Hokkaido town of Toyako. He said he wanted to place an emphasis on regional areas. However, after his party experienced a devastating defeat in the 2007 House of Councillors election, he stepped down and Yasuo Fukuda, who took over as prime minister, chaired the summit. Holding a regional summit has thus been an ardent wish of Abe's, nine years in the making.

Hiroshima is also in the spotlight this year, as the Japanese and U.S. governments announced on May 10 that U.S. President Barack Obama would visit the A-bombed city on May 27, making him the first sitting president to do so. Hiroshima Mayor Kazumi Matsui welcomed this as a "bold decision based on reason and conscience." There is high international interest in the visit, and Abe will accompany Obama to Hiroshima, to underscore the aspirations of both Tokyo and Washington for nuclear disarmament and nonproliferation.

During the summit, however, many bilateral meetings are expected to take place. Abe plans to attend outreach gatherings with the heads of international organizations and the leaders of Asian countries invited to the summit, and it is likely that he will be on a tight schedule. The Japanese government is rushing ahead with negotiations to allow bilateral talks to commence before the summit begins on May 26 so that Abe can hold talks with as many leaders as possible and also go to Hiroshima. Even so, time will be limited, and an official from the Ministry of Foreign Affairs commented, "It will be a fairly complicated and elaborate schedule."

GLOBAL WARMING

In December last year, the 21st United Nations Climate Change Conference (COP 21) was held in Paris, and a new global agreement on measures against global warming, the Paris Agreement, was adopted. The Ise-Shima Summit is the first G-7 summit to be held since then.

One focus of the summit will be bringing the Paris Agreement into force at an early date. The question of how participants will present their determination to institute effective global warming countermeasures is also likely to gain attention. At the same time, it appears likely that global warming will be overshadowed by themes such as the world economy and terrorism.

During last year's G-7 summit, the leaders' declaration included numerical targets for the reduction of greenhouse gases at the strong wish of Germany, which presided over the summit, and this led to the adoption of the Paris Agreement.

Assuming the summit presidency this year, Japan needs to present an active stance on measures against global warming, and boost momentum toward quickly bringing the Paris Agreement into force.

THE GLOBAL ECONOMY

As factors including a rapid slowdown of the Chinese economy exert downward pressure on the global economy, observers will be watching to see whether the G-7 countries can coordinate on policies to prop up economic performance. Prime Minister Shinzo Abe, serving as chairman, plans to compile measures centering on government spending, but the participating countries have different levels of enthusiasm on the issue.

Financial markets have been upset with the price of oil falling below 30 dollars per barrel in January this year, amid strong concerns about adverse effects on the economies of emerging countries. The global economy outlook released by the International Monetary Fund in April this year predicted that the world economy would grow 3.2 percent overall in 2016, 0.2 points down from the prediction made in January.

The United States' real economic growth rate for the January-March quarter on an annualized basis registered a 0.5 percentage point increase from the previous period, slowing down significantly from the 1.4 percentage point increase the time before. Expansion of job opportunities has also peaked, and there are signs of decline in economic activity.

With an increasing perception that fiscal easing in Japan and Europe was running out of steam, the United States made a call at the G-20 summit of finance ministers and central bank governors in Washington in April to boost business conditions through fiscal action.

The G-7 countries are aligned on the position of raising the level of growth through a combination of public spending, structural reform and monetary policy. But they have different ideas on where to place their central focus. While Japan and the United States have sought stimulation of domestic demand through public spending, Germany and Britain, which have focused on fiscal discipline, have painted a path toward growth by promoting structural reform through regulatory easing and other such measures, remaining cautious about public spending.

The United States hopes to turn around unfavorable conditions for its exporters by halting the appreciation of the dollar, and thereby sustaining economic recovery. This, however, conflicts with the interests of Japan, which under the prime minister's "Abenomics" economic policy mix aims to restore corporate performance with a weak yen that benefits Japan's exporters.

As the economies of emerging countries slow down, the cohesiveness of the G-7 countries will be tested. The world will also be waiting to see if they can establish a clear direction and provide a driving force to the world economy.

(Click on the "Related" link above for Part 2)

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