G-20 Summit: Today, the world comes calling on Pittsburgh


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The limos will roll past Flagstaff Hill tonight as the leaders of nations representing 85 percent of the world's wealth officially open the Pittsburgh Summit, the long-awaited gathering of the G-20.

In separate dinners at the Phipps Conservatory, the heads of government and their finance ministers will begin their discussions of the world's economy, assessing their previous efforts to heal it at summits in Washington and London over the past year.

Tomorrow, the conversations shift to the David L. Lawrence Convention Center, amid the tightest security Pittsburgh has ever experienced.

The high-profile meetings are the culmination of negotiations across the globe that have taken place to shape its agenda and those of related forums on trade, climate change and the rules of the road for finance in a post-crisis world.

"We all know that when the circus comes to town, that is only the visible part of an ongoing process," Anthony Swallwood, first counselor of the European Union's Washington delegation, said during a pre-summit stop in Pittsburgh last week. Just as those meeting paved the way for the Pittsburgh session, the talks tonight and tomorrow will serve as a prelude -- whether catalyst or impediment remains to be seen -- to pending international talks on issues including trade and climate change.

As has become traditional in such gatherings, the world leaders were greeted with demonstrations ranging from the whimsical to the confrontational.

Protests began at mid-morning with a daring stunt by a team from Greenpeace, the environmental organization known for sometimes confrontational tactics.

Two squads of Greenpeace activists attempted to simultaneously rappel down the sides of the Fort Pitt and West End bridges. Police managed to nab the five activists on the Fort Pitt Bridge, but eight protesters managed to unfurl an 80-by-30-foot banner proclaiming "Danger: Environmental Destruction Ahead," while dangling above the Ohio River for several hours.

As police waited them out, the group hovered over the waters as city River Rescue and Coast Guard vessels circled below.

By early afternoon, the team members, described as expert climbers by Greenpeace spokesmen, climbed back up and were all arrested, along with a ninth member who remained on the bridge to assure police that the activists were peaceful, were experienced climbers and were equipped to pull themselves back up on the bridge at the end of the protest.

"They went up on their own. It's safer that way," said Damon Moglen, global warming director for Greenpeace. All 14 demonstrators were taken to the Allegheny County Jail.

But Greenpeace was stymied in later attempts throughout the day to unfurl other banners from atop city structures. A plan to drop a banner at The Warhol Museum ended when a crew arrived to find National Guard troops inspecting the site and a phalanx of state police in a nearby side street.

A similar attempt to put a banner across the Rachel Carson Bridge also ended without success.

A bicycle ride by Critical Mass, a group that occasionally takes over Downtown streets on weekend rides, brought a disappointing turnout, with city bicycle police outnumbering the protesters.

Stronger stuff is anticipated today when a yet-to-be-determined number of protesters gather at Arsenal Park in Lawrenceville for an unpermitted march Downtown toward the David L. Lawrence Convention Center as the G-20 convenes.

Representatives from a variety of protest groups gathered last night at the headquarters of the Pittsburgh G-20 Resistance Project, an umbrella group of anarchist organizations that has provided a gathering point.

The council, which was closed to the media, was expected to be the site at which various groups indicate which of a myriad of corporations and other sites they expect to hit in what the groups call "direct action."

Such actions could range from a protest to a sit in to attempts to close the location, as well as to block city streets.

City police have remained relatively uncommunicative, but yesterday they acknowledged that they have kept several locations under surveillance. Both local and federal law enforcement sources said police have believed that for several months as many as three warehouses in the city might be used by protesters to store equipment that could be used to close down streets. Deputy Police Chief Paul Donaldson confirmed that several groups and locations are currently under surveillance.

Heavy security

The security presence, in addition to the 900 officers of the Pittsburgh Police force, includes federal agencies ranging from the Secret Service to the Coast Guard, along with 1,200 state troopers. Anticipating the protests, the Pittsburgh Police also enlisted the assistance of officers from scores of other departments across the country. All in all, it represented an unprecedented police presence for Pittsburgh.

Mayor Luke Ravenstahl yesterday swore in around 1,000 visiting law enforcement agents for service in the city during the G-20 Summit, in a ceremony at Soldiers & Sailors Memorial Hall & Museum.

A more positive welcome mat, months in the unrolling, came from local governments and civic groups, which joined in a multi-million-dollar logistical and PR campaign to prepare the city for its turn on the international stage. The PR jury won't return a final verdict until after the world leaders scatter tomorrow. But the civic sales job has already produced a list of Pittsburgh-focused stories in national and international publications.

Most reflect at least in some measure the narrative jointly promoted by the Obama administration and local boosters -- that Pittsburgh is an example of a resilient, environmentally conscious city successfully transforming itself from an industrial to a knowledge-based economy.

In addition to those asserting their messages in the streets, the summit has prompted any number of seminars, panels and speeches from outside groups advocating an array of policy agendas.

An exclusive club

But the messages with the greatest weight will be pronounced from within the exclusive club meeting in Oakland tonight and Downtown tomorrow.

The G-20 started a little over a decade ago as a forum for finance officials. It morphed into a conference for heads of government less than a year ago in response to the world financial meltdown. In doing so, it answered some of long-standing objections of rapidly developing nations such as China, India and Brazil that the older G-7, and G-8 meetings of big industrial countries were a vestige of an economic world gone by.

The leaders of the 19 nations and the European Union are gathering at a time when there are at least some signs, varying from country to country, that the worst ravages of the world recession may be easing. But some experts described the improving situation as a potential problem insofar as it may sap the sense of urgency that led to the near unanimity among the leaders in Washington and London on steps to confront the crisis.

Among the issues that will be discussed is the timing of national moves to reel in the expansive spending and interest rate policies that the leading nations adopted in concert to revive their stalled economies over the last year. The leaders also will review calls for new regulatory structures to corral excesses that led to the boom-and-bust consequences of risky behavior by banks and other financial institutions.

Speaking during the United Nations session on the eve of the Pittsburgh meeting, Brazilian president Lula Inacio da Silva warned against "The absurd doctrine that markets could regulate themselves without the so-called intrusion of state institutions."

Some European voices have stressed the need to put curbs on bankers' bonuses on the theory that they encouraged such risks in pursuit of short-term profits that inflated those bonuses. Obama administration officials have endorsed the general principle of supervision of pay structures.

Despite that agreement on broad goals, however, it is far from clear that the nations will be able to reach consensus on such compensation details, or how they would be enforced by the individual nation's varied regulatory agencies.

Similarly, U.S. Treasury Secretary Timothy F. Geithner has promoted the need to strengthen the capital requirements for banks, another broad goal that may prove easier to embrace in principle than in specific details.

In each of the past two meetings, the G-20 figures have agreed on the need to avoid protectionism. In the view of trade experts, however, that consensus has not prevented instances of backsliding on the issue in almost all of the major economies. In a private meeting in New York on Tuesday, Chinese President Hu Jintao complained to President Barack Obama over his recent decision to impose tariffs on imports of Chinese tires.

Looking forward, both countries would be at the center of a proposal on the summit table for along-range shift away from a pattern of world, and particularly, Chinese reliance on U.S. consumption -- consumption sustained by U.S. borrowing.

While all of these difficult issues are debated, an unprecedented international spotlight will focus on Pittsburgh.

"I'd just like to say, we've all been impressed by the high quality of the preparations that have been made," John Bruton, the EU ambassador to Washington, said in a recent interview. Mr. Bruton, as a former prime minister of Ireland, is no doubt familiar with the concept of Blarney.

"You will be, if you like, the capital of the world for two days."




Handful of issues will hold table

A handful of issues are likely to dominate the Group of 20 summit in Pittsburgh, with disagreements brewing between or among key players.

FINANCIAL REGULATORY REFORM

United States and E.U. Focus on Different Issues

While there is a broad consensus that regulation of the global financial system needs strengthening, the continental Europeans and the United States are emphasizing different elements of reform.

The Europeans have stressed restricting banker's pay as the best way to get rid of perverse incentives that they think encouraged irresponsible risk taking. The United States, meanwhile, would seek to require banks to increase the quality and quantity of the capital they hold on reserve to cover potential losses, so taxpayers are less likely to be on the hook for their mistakes.

REFORM OF THE IMF AND THE WORLD BANK

China, India and Brazil Emphasize Emerging Economies

The United States and emerging economies such as China, India and Brazil want to change the structure of the International Monetary Fund and the World Bank to better reflect the increasing importance that the latter play in the global economy.

But any change would likely be at the expense of smaller European countries, which are overrepresented in both bodies, and, as a result, those nations have been less enthusiastic about such changes.

REBALANCING THE GLOBAL ECONOMY

U.S.-China Trade Is a Critical Issue

The United States is pushing for an agreement to promote what officials are calling balanced and sustainable growth. It is part of an effort to persuade export-dependent countries -- and China, in particular -- to rely less on the U.S. consumer for growth and more on domestic consumption.

Some economists think that the U.S. trade imbalance with China contributed to the financial meltdow, by allowing China to accumulate dollars and boost investments that helped fuel the housing and stock price bubbles. The Chinese have acknowledged the need to rely less on exports, but they are likely to chafe at anything that suggests that they were to blame for the crisis.





Politics Editor James O'Toole can be reached at jotoole@post-gazette.com or 412-263-1562. Dennis B. Roddy can be reached at droddy@post-gazette.com or 412-263-1965.


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