G20: Look out US, the developing train emerges

As global leaders descend on Seoul for a two-day G20 summit, significant tensions remain on the global economy. Finger pointing for much of the worlds economic ill-health, between the US and China and to some extent other lesser players, has set the stage for the moot.
G20 replaced the G7 last year as the global policy coordination group. The role of the developing world became increasingly important as the developed Western countries fell from grace after the 2008 crisis, largely for its love for debt.
It may not just be symbolic that for the first time a summit of the G20 is being hosted outside of the G7 boundaries.
The recession is over now, and the emerging economies are roaring back with growth. Chinas trade surplus has touched $27 billion, higher than economists expectations. Brazil is warning of asset bubbles in real estate and the prominence of India has been underscored by Obamas recent sales call.
The hottest topic, likely to dominate the summit, will remain exchange rates manipulation. Western leaders are blaming China for not ceding to demands for a market driven rate for the Yuan. The recently announced quantitative easing by the US has drawn sharp criticism from the developing world.
Analysts following the developments expect little, if any, progress on the issue in the conference. Rest assured the communiqué will incorporate pledges of the importance of policy coordination in this area, without naming any specific currencies.
Hopes are being attached to trade liberalization for restoring global imbalances. This view is being echoed more by the China, India and Germany bloc that needs to find consumers for their industrial revival. Job growth in the West is being pinned to investments in infrastructure.
According to a Wall Street Journal editorial, revival of the Doha round of trade negotiations and the US-Korea trade agreements could pave the way towards trade policy harmonization across the globe.
The playing field has changed. No more is the world economy US-centric. Emerging economies have started leveraging their importance and asserting their interests.
Key to watch will be the language of the communiqué released at the end of the summit. While there is no doubt that themes of balanced growth, mutual benefit, job creation and the importance of market forces will be highlighted, it will be interesting to see if the policy recommendations balance the demands of the developed and the emerging economies.