Why the G20 matters now for both Saudi Arabia and the international community

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France's President Emmanuel Macron (L) shakes holding a joint media conference with Argentina's Mauricio Macri at Casa Rosada presidential house in Buenos Aires on November 29, 2018. (AFP / Ludovic Marin)
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G20 summit banners are pictured ahead of the leaders' meeting in Buenos Aires, Argentina November 29, 2018. (Reuters)
Updated 30 November 2018
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Why the G20 matters now for both Saudi Arabia and the international community

  • The world is hoping the US and China will resolve their trade war
  • Saudi Arabia will showcase Vision 2030 on the global stage

DUBAI: The summit of the G20 nations assembling in Buenos Aires comes at a crucial time in world affairs, as well as a critical juncture in the economy of its host nation, Argentina.
For Saudi Arabia too, the meeting comes at an important crossroads – an opportunity to move its economic transformation strategy onto another level in the face of challenges at home and abroad.
While public perception of the G20 is based on the power-play politics on display over the traditional 48 hours of summitry, behind the scenes the gathering is a forum for the resolution of economic and financial issues.
The two days of in-your-face events are preceded by more discreet meetings of business leaders and financial officials — the legendary “sherpas” — from the member countries and their invitees; their discussions are decidedly economic, rather than political; their implicit agenda is to maintain economic stability within the existing financial framework.
Maybe this is why, over the course of the 10-year history of the G20, it has attracted more criticism and opposition from the left wing, and physical opposition from violent extremists, than any other multinational gathering.
The G20 is unashamedly a club of capitalists, even when its most populous member and second biggest economy, China, is still nominally a communist economy. In its decade in the capitalist inner sanctum, China has proven just as orthodox a capitalist as any of the other members, including the standard bearer of free enterprise, the US.
In 2009 at the G20 in Pittsburgh, China joined with the US to bail out the world with an expansionist program after the global financial crisis had led it to the brink, declaring itself a committed member of the club.
How different the atmosphere is in Buenos Aires. The global economic system seems to be on the point of fracture again, but this time there seems little chance of a US-China double act coming to the rescue.
The Costa Salguero Center on the edge of the Rio de la Plata will be the venue for the first meeting between US President Donald Trump and Chinese President Xi Jinping since, earlier this year, the former fired the opening shots in the “trade war” going on between them by declaring his intention to impose $250 billion of tariffs on Chinese imports.
China retaliated with its own tariffs, and there is a danger that the confrontation — which some American officials describe as merely a “skirmish” — will descend into a full-scale battle next year, when the tariffs take effect.
That would have serious consequences for a global economy that is looking increasingly fragile amid concerns that the financial system, too, is laboring under a weight of increased debt and overinflated asset prices.
China recently held out an olive branch, with deputy president Wang Qishan declaring his readiness to enter serious negotiations to avoid a breakdown in the global trade system. The hope is that Trump will hold off formally applying the tariffs in January.
But in Buenos Aires, nobody is expecting too much from the dinner that the two presidents have arranged on Friday night.
By then, the first full day of the summit will have been completed, and President Mauricio Macri of Argentina will be hoping that it has gone off without the major incidents that have been threatened by home-grown and international agitators.
If there was a repeat of the serious football-related violence that broke out in Buenos Aires recently, it would take the shine off his attempts to claim that Argentina had turned a corner in its economic troubles, in the run-up to presidential elections next year.
Macri was elected three years ago in a burst of optimism that his reformist policies would put the Argentine economy on the road to stability after years of boom-and-bust cycles, interspersed corruption scandals, and domestic unrest.
For a while it seemed to be working, and winning the G20 was seen as a mark of approval by the international community for his presidency.
But recently the old Argentine malaise has come back with a vengeance. The peso has lost 50 percent of its value against the dollar this year, Argentine financial markets have been chaotic, and inflation has soared to more than 30 percent per annum. Some Argentinians complain they cannot afford steak.
Macri has stabilized the situation in recent weeks, with the IMF giving its blessing in a series of measures to stabilize the economy and the financial system.
But Argentine citizens are still having to live with an austerity program that threatens their standard of living, and it would not take much for ordinary citizens — the ones who have not taken Macri’s advice to have a long weekend away from Buenos Aires — to join protests that could easily descend into violent confrontation as the G20 leaders meet.
That would be an embarrassment for Macri in front of his fellow leaders, and would also distract from the rest of the very worthy G20 program.
While the media is salivating for a Trump-Xi confrontation on trade, more fireworks on climate change and street protest, the compilers of the G20 program have actually put together a formal agenda that reflects some of the other genuine concerns of the international community.
The theme of the Buenos Aires G20 — as it is the case increasingly with international forums from Davos to Singapore — is sustainability. The world has to live within it means, both in terms of energy, environment, society and finance.
The Argentine G20’s self-declared goals are to focus solutions on the future of work, infrastructure for development, viable food production and consumption, and the inclusion of more women in the global workforce, all against the backdrop of the rapid technological change turning most aspects of the economic process on its head.
That coincides with many of the goals of Saudi Arabia’s Vision 2030, which Saudi policymakers — led by Crown Prince Mohammed bin Salman — will be at pains to stress is still on track in Buenos Aires. The event gives the opportunity to reassert the project’s credentials on the international stage after a period of uncertainty in crucial global energy markets and changes in the international perception of the Kingdom.
Some aspects of the Vision 2030 program — like the initial public offering of Saudi Aramco originally slated for next year — have been modified in line with changing circumstances, and lower oil prices threaten to alter the fiscal mathematics for the Kingdom’s economic policymakers.
As the biggest economy in the Middle East, a leading oil producer and a long-standing member of the G20, Saudi Arabia will retain its role and its influence in Buenos Aires. The top-level delegation will be working hard behind the scenes, at the bilateral and “retreat” events at the summit center, to argue its case among its global peers.
It all promises to be an instructive lesson in the stagecraft, and statecraft, that goes into hosting a G20 summit, which, after a move to Japan next year, is planned to be held in Saudi Arabia in 2020, its first time in the Middle East.


Trump ex-lawyer Cohen sentenced to 3 years prison on campaign charge

Michael Cohen
Updated 52 min 57 sec ago
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Trump ex-lawyer Cohen sentenced to 3 years prison on campaign charge

  • Cohen received 36 months for the payments and two months for the false statements to Congress
  • ‘It was my own weakness and a blind loyalty to this man that led me to choose a path of darkness over light’

NEW YORK: Michael Cohen, US President Donald Trump’s former personal lawyer, was sentenced to a total of three years in prison on Wednesday for his role in making illegal hush-money payments to women to help Trump’s 2016 election campaign and lying to Congress about a proposed Trump Tower project in Russia.
US District Judge William Pauley in Manhattan sentenced Cohen to 36 months for the payments, which violated campaign finance law, and to two months for the false statements to Congress. The two terms will run simultaneously. The judge set March 6 for Cohen’s voluntary surrender.
Cohen pleaded guilty to the campaign finance charge in August and to making false statements in November. As part of the sentence, the judge ordered Cohen to forfeit $500,000 and pay restitution of nearly $1.4 million for the campaign finance law violations.
Cohen, 52, had walked into court on Wednesday morning with his wife, son and daughter, amid a crowd of photographers and reporters.
The sentencing capped the stunning about-face of a lawyer who once said he would “take a bullet” for Trump but has now directly implicated the president in criminal conduct. The three-year sentence imposed by the judge was a modest reduction from the four to five years recommended under federal guidelines, but still underscored the seriousness of the charges.
“While Mr. Cohen pledges to help in further investigations that is not something the court can consider now,” Pauley said.
Federal prosecutors in New York charged that Cohen, just before the November 2016 election, paid adult film actress Stormy Daniels $130,000 and helped arrange a $150,000 payment to former Playboy model Karen McDougal so the women would keep quiet about their past relationships with Trump, who is married. Trump denies having the affairs.
Prosecutors have said the payments violated campaign finance laws. Cohen told prosecutors the payments were directed by Trump, implicating the president in a possible campaign finance law violation.
Federal law requires that the contribution of “anything of value” to a campaign must be disclosed, and an individual donation cannot exceed $2,700.
“It was my own weakness and a blind loyalty to this man that led me to choose a path of darkness over light,” Cohen told the judge during the sentencing hearing.
“I felt it was my duty to cover up his own dirty deeds,” Cohen said, referring to Trump.
Cohen was sentenced on the separate charge of lying to Congress brought by Special Counsel Robert Mueller, who is investigating Russia’s role in the 2016 election and possible coordination between Trump’s campaign and Moscow. Cohen pleaded guilty to that charge last month.
“He came forward to offer evidence against the most powerful person in the country,” one of Cohen’s lawyers, Guy Petrillo, told the court on Wednesday, arguing for leniency. Cohen cooperated knowing “the president might shut down” Mueller’s investigation, Petrillo said.
Trump has denied any collusion with Russia and has accused Mueller’s team of pressuring his former aides to lie about him, his campaign and his business dealings. Russia has denied US allegations of interfering in the election to help Trump.
In an interview with Reuters on Tuesday, Trump denied the payments were campaign contributions. “If it were, it’s only civil, and even if it’s only civil, there was no violation based on what we did,” Trump said.
Trump’s lawyer Rudy Giuliani has argued the hush payments cannot be considered campaign finance violations because they were made to protect Trump’s reputation and would have been made even if he had not been a presidential candidate.
In his guilty plea to Mueller’s charge, Cohen admitted he lied to Congress about the timeline for discussions about plans for real estate businessman Trump’s proposed skyscraper in Moscow. The project was never built.
Cohen said in written testimony to two congressional committees that the talks ended in January 2016, before the first electoral contests to select the Republican presidential nominee, when they actually continued until June 2016 after Trump clinched the Republican nomination.