As G20 heads tackle currency values, their decisions will be felt most on the frontlines of international business.
A deeply divided G20 is struggling to move beyond broad promises of economic co-operation as finance ministers and other representatives gathered in Seoul, the capital of South Korea, for a two-day summit.
The agenda for the summit, that includes dozens of bilateral meetings for officials of the world’s 20 largest economies, will officially kick off with a working dinner on Thursday night to be followed by a full day of meetings on Friday.
Contention came in the lead-up to the summit after the US central bank’s announcement last week that it plans to buy another $600bn in government bonds, which drew sharp rebukes from many G20 members who said the US was ignoring consequences abroad.
Alan Greenspan, the former US Federal Reserve chairman, said in the Financial Times on Thursday the US was pursuing a policy of weakening the dollar, adding fuel to an already heated G20 debate over the Fed’s bond-buying spree in a bid to revive its economy.
On Wednesday, Chinese state media carried an editorial with the headline: “Dollar bonanza may cripple delicate global economy”, and Germany’s finance minister called the US decision “clueless”.
Brazil said a currency war between the US and China was resulting in global trade imbalances that keep economies from recovering.
The G20 club of rich and emerging economies had hoped to use the summit to soothe tensions over foreign exchange rates that have been created by sharply divergent economic growth rates.
Barack Obama, the US president, who arrived in Seoul on Wednesday, urged his peers to put aside differences and follow through on previous agreements to even out imbalances between cash-rich exporting nations and debt-burdened importers.
After meeting Hu Jintao, the Chinese premier, on Thursday Obama said that he expects the G20 nations to find consensus on broad-based and balanced growth.
“It is my expectation that the communique will begin to put in place mechanisms that help us track and encourage … balanced and sustainable growth,” he said at a joint news conference with Lee Myung-bak, the South Korean president.
Referring to the US economy, Obama said: “The single most important thing we can do to tackle our debt and deficits is to grow.”
Lee said a “little bit” of progress had been made since finance ministers meet in Gyeongju, South Korea, last October but deep divisions remained over how best to reduce current account imbalances.
“We had reached an agreement [at Gyeongju] despite skepticism that no agreement would be reached because of a divide in opinion between US, China, Europe and other countries,” he said.
Lee also said that the leaders would back the idea of “indicative guidelines” for the reduction of current account imbalances.
Rosiland Jordan, Al Jazeera’s correspondent in Seoul, said that there was little sign that there would be concord at the meet.
“At the moment here doesn’t seem to be any attempt to have agreement except on the pace of growth,” she said. But such agreements usually come very last in the summit.”
Alan Alexandroff, the co-director of the G20 Reseach Group at the University of Toronto, told Al Jazeera that the issue of means of dealing with imbalances between national economies – such as quantitative easing and currency revaluation – was going to dominate the summit.
Protests were set to intensify in Seoul on Thursday, although police set up a security corridor around the summit site and planned to keep disruptions far from the leaders.
There have been hundreds of applications for rallies, mostly by small groups, with a mass rally involving possibly tens of thousands of people.
Demonstrators have been present in Seoul over the past couple of days, holding a candle-light vigil on Wednesday.
They have said that globalisation has failed to bring prosperity to people and that a new world body is needed to represent all people.