There is little in the Group of 20 (G20) leading and emerging economies Seoul Action Plan to reassure the world that tensions preceding the summit will not re-emerge and increase any time soon. Given the G20's failure to provide an effective mechanism for macroeconomic policy co-ordination, it is not hard to envision that as deficit-developed countries try to overcome their economies' sluggishness while the surplus-emerging economies stick to the export-led strategies that yielded them high growth and strong recovery, global imbalances will widen again. Even worse, the imbalances may not widen again, but for the wrong reason. What if each key player engages in a tit-for-tat strategy to undo strategies of its perceived competitors and in the end the imbalances do not widen because economic growth and trade are destroyed?
There is already evidence of the kind of contention that could lead to this worst-case scenario. For example, China is accused of being stubbornly attached to a weak yuan policy to sustain its export-led growth model at the expense of other economies' expansion, and it has become the chief target of punitive ideas. Bills in the US Congress to apply discriminatory import tariffs on China; imposition of capital-market restrictions to prevent China from purchasing US Treasury bills; countervailing currency interventions to upset China's own intervention in foreign-exchange markets; and even outright suggestions to declare trade war with China - all are examples of ideas put forward by otherwise reasonable people. Frankly, these proposals are impractical, counterproductive or even silly.
Seen from the other side, China is pointing, with reason, to the need for correction of structural factors - chiefly excessively low savings rates - by deficit countries, in particular the US, as a condition sine qua non to avoid a re-run of the huge macro imbalances. But China is wrong in denying its own share of the responsibility to fix the imbalances.
In the run-up to Seoul, global friction was all too evident. The drums of a currency and trade war were beating. It may remain just noise, but the dispute may well become a real and bloody battle, seemingly worth fighting from each country's perspective. The problem is that increasingly the large surplus and deficit economies are, as in the classic dilemma, captive in the prison of mercantilism. As long as they are trapped in this edifice, the unilateral actions of each one might be effective to hurt competitors, but also will boomerang with great force and inflict damage on the originator.
The G20 did not provide a co-operative solution to the present dilemma because, again, it failed to deliver a practical strategy to honour the reasonable principle that all parties have a responsibility as well as a role to play, and all available policy instruments should be put to work. The G20 leaders failed because they did not seriously empower the IMF to carry out its surveillance responsibility. They failed because they shied away from stating clearly that for rebalancing to happen, on the one hand deficit countries need both to save more and sell more to the rest of the world, and on the other hand surplus countries must spend more domestically and sell less to the world.
They failed because they did not trash once and for all the absurd idea that the correction of imbalances is fundamentally a G2, or US-China, issue. Every significant economy - deficit or surplus - has not only a stake but also a responsibility for correcting macroeconomic imbalances. This is clearly the case for Germany, which has long incurred large current account surpluses, not debated much before because they were disguised in the euro zone's nearly balanced current account. Germany must reduce its large surplus in a way that both helps correct the global imbalances and enhances the probability of recovery of its euro partners.
Japan is another large surplus country that must take an active part in the rebalancing, undertaking at last structural reforms that would make it less dependent on foreign demand to sustain its level of economic activity. And the same applies to those emerging countries with large surpluses, which would find it healthier to rebalance their growth towards domestic demand, attract more exports from deficit countries and, in the process, accept some current account deterioration. They would find the latter more palatable and also helpful in mitigating their appetite for large accumulations of foreign exchange reserves if the G20 had delivered a mechanism of enhanced multilateral insurance against international liquidity droughts, which it did not.
For very valid social reasons, China must seek to preserve its high rate of economic growth, which, by the way, is good not only for that country, but also for the world at large, and certainly for other developing countries. However, China must adapt its policies through a mix of structural reforms, more domestic investment and a more flexible yuan - but certainly not to the extent that some demand in Washington, and in other capitals of rich countries. It is worth insisting that China is in the fortunate situation of being capable of reducing its current account surplus by raising investment, which in turn will raise its growth.
Addressing the question of global macroeconomic imbalances is a litmus test for the international community. Undoubtedly, among the largest countries, the US has the most difficult balancing act to accomplish. It must, on the one hand, escape the low-growth, high-unemployment equilibrium now trapping it and, on the other, must undertake a practically unprecedented effort to correct the rapid expansion of its national debt. The co-operation among surplus and deficit countries that was not achieved at Seoul - in part the fault of the US itself - will make it much harder for that country to rebalance its economy domestically and externally.
The G20 has made confrontation more likely not only by failing on macroeconomic policy co-ordination but also by not delivering in its commitment to conclude the Doha Round this year. Instead of getting the job done - referring to Seoul as "a critical window of opportunity" - the G20 leaders might have actually closed the door for a successful conclusion of the round when most needed.
The Seoul outcome is truly worrisome. Addressing the question of global macroeconomic imbalances in a co-operative way is the litmus test of whether the international community is capable of managing other imbalances of greater complexity, as economic and geopolitical power continues to shift substantially in the years to come. So far the G20 is flunking that litmus test.
Ernesto Zedillo is director of the Yale Center for the Study of Globalization and former president of Mexico
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
The specs
Engine: 6.2-litre V8
Transmission: ten-speed
Power: 420bhp
Torque: 624Nm
Price: Dh325,125
On sale: Now
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
THE SPECS
Jaguar F-Pace SVR
Engine: 5-litre supercharged V8
Transmission: 8-speed automatic
Power: 542bhp
Torque: 680Nm
Price: Dh465,071
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Her most famous song
Aghadan Alqak (Would I Ever Find You Again)?
Would I ever find you again
You, the heaven of my love, my yearning and madness;
You, the kiss to my soul, my cheer and
sadness?
Would your lights ever break the night of my eyes again?
Would I ever find you again?
This world is volume and you're the notion,
This world is night and you're the lifetime,
This world is eyes and you're the vision,
This world is sky and you're the moon time,
Have mercy on the heart that belongs to you.
Lyrics: Al Hadi Adam; Composer: Mohammed Abdel Wahab
If you go...
Fly from Dubai or Abu Dhabi to Chiang Mai in Thailand, via Bangkok, before taking a five-hour bus ride across the Laos border to Huay Xai. The land border crossing at Huay Xai is a well-trodden route, meaning entry is swift, though travellers should be aware of visa requirements for both countries.
Flights from Dubai start at Dh4,000 return with Emirates, while Etihad flights from Abu Dhabi start at Dh2,000. Local buses can be booked in Chiang Mai from around Dh50
OTHER IPL BOWLING RECORDS
Best bowling figures: 6-14 – Sohail Tanvir (for Rajasthan Royals against Chennai Super Kings in 2008)
Best average: 16.36 – Andrew Tye
Best economy rate: 6.53 – Sunil Narine
Best strike-rate: 12.83 – Andrew Tye
Best strike-rate in an innings: 1.50 – Suresh Raina (for Chennai Super Kings against Rajasthan Royals in 2011)
Most runs conceded in an innings: 70 – Basil Thampi (for Sunrisers Hyderabad against Royal Challengers Bangalore in 2018)
Most hat-tricks: 3 – Amit Mishra
Most dot-balls: 1,128 – Harbhajan Singh
Most maiden overs bowled: 14 – Praveen Kumar
Most four-wicket hauls: 6 – Sunil Narine
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The biog
Hobbies: Salsa dancing “It's in my blood” and listening to music in different languages
Favourite place to travel to: “Thailand, as it's gorgeous, food is delicious, their massages are to die for!”
Favourite food: “I'm a vegetarian, so I can't get enough of salad.”
Favourite film: “I love watching documentaries, and am fascinated by nature, animals, human anatomy. I love watching to learn!”
Best spot in the UAE: “I fell in love with Fujairah and anywhere outside the big cities, where I can get some peace and get a break from the busy lifestyle”
Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
ABU%20DHABI'S%20KEY%20TOURISM%20GOALS%3A%20BY%20THE%20NUMBERS
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Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
THE%20HOLDOVERS
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
