Future of Globalized Economy Is Issue as World Leaders Meet
After a spring of extraordinary diplomatic rancor, world leaders gathering this weekend in Evian, France, for the annual economic summit are facing rising concerns about their broad commitment to a globalized economy.</br></br>The summit isn't expected to lead to any significant economic accords. Rather, it will be watched to see if the leaders of the world's largest economies, who had split badly over the Iraq war, can come together symbolically. That could make a difference to markets, who worry that the divisions of foreign affairs and military strategy would spread into the economic sphere.</br></br>The world economy already faces a variety of concerns ranging from the falling dollar to the spread of deflation in Asia and the threat of it in Europe and North America. A continuing split between the U.S. and Britain on the one hand, and France, Germany and Italy on the other would undermine confidence that those governments could put together a unified economic strategy. One clue to look for: Whether the summit participants agree how the rebuilding of postwar Iraq should proceed now that United Nations sanctions have been lifted.</br></br>"There was a tendency in the '90s to feel that globalization would very likely continue," said Robert Rubin, the former U.S. treasury secretary in the Clinton administration and now a Citigroup executive. "But there is obviously a much greater backlash than expected and more uncertainty about it moving forward."</br></br>In some ways, the world is similar to when economic summits began 28 years ago. During the first summit in November 1975 in Rambouillet, France, trade-liberalization talks had collapsed; India had exploded a nuclear bomb the year before, heightening fears of nuclear proliferation; and the dollar was falling after the U.S. abandoned the gold standard several years earlier.