Countdown to G7: Economic uncertainty, war, climate change raise tensions ahead of summit

World leaders are arriving in Japan for this weekend’s highly anticipated Group of 7 Summit, which will transpire against a backdrop of mounting global economic uncertainty and escalating geopolitical tensions.

Diplomats from the G7 nations — Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — face the daunting task of untangling a complex web of challenges that threaten global stability and planetary health. The issues include disruptions in agricultural growth, food insecurity, energy, trade, the U.S.-China clash over technology and the Russian war on Ukraine.

Economic uncertainty amid inflation

To start, the G7 leaders will need to grapple with the disparate impacts of inflation, a surging post-pandemic demand for goods, and trade.

Inflation rates have hovered around 5-6% since 2021, driving up costs for essential items like energy and food while straining already vulnerable global supply chains, said Shon Hiatt, an expert in global food and energy markets at the USC Marshall School of Business.

The rising cost and scarcity of food have become urgent issues for the G7.

Shon Hiatt, USC Marshall

“The rising cost and scarcity of food have become urgent issues for the G7, a group of wealthy nations that used to rely on imports to meet their food needs. The recent political turmoil in Europe and global inflation have made food imports more expensive and less reliable,” Hiatt said.

Hiatt warned that energy prices are likely to increase as well, especially if the G7 moves forward with its aggressive plans to rapidly replace power generated from coal, petroleum, gas and nuclear power with intermittent, sustainable energy sources like solar and wind. These green energy policies can raise the cost of electricity, disrupt transportation and compromise the reliability of the power grid, he explained.

U.S. federal regulators have voiced similar concerns in the lead-up to the summit, issuing warnings that the rapid retirement of coal, gas and nuclear power could have serious unintended consequences amid a switch to intermittent green technologies.

Hiatt reiterated that the problem is not the addition of renewable energy sources like solar and wind, but the subtraction of dispatchable resources that can provide power on demand. The atmosphere for G7 is further clouded by the U.S. support for Ukraine and the U.S. effort to reemerge as the world’s leader in tech manufacturing and development, much to China’s detriment.

“The tensions with China and Russia have increased the possibility of a wider conflict that could disrupt energy and food markets. Given the geopolitical uncertainties, the G7 should reconsider its energy strategy and prioritize reliability and affordability,” he said.

G7 summit convenes as AI is rising

Last week, G7 digital and technology ministers called for expedited discussions about the responsible use and governance of emerging technologies. Since the advent of OpenAI’s ChatGPT and other generative AI tools, policymakers around the world have expressed concern over how to address their potential implications for cybersecurity and cross-continental data sharing, intellectual property and, most pressingly, the proliferation of misinformation — fake news — online.

Banks recently shifted their perspective on social media — deeming social media monitoring and communication imperative, Reuters reported. Suspicions and rumors on social platforms fueled an unprecedented fast-and-furious sell-off that tanked Silicon Valley Bank and shook the financial industry.

The incident has exposed how influencers can sway investors as easily as bots can sway voters on social media.

Diplomats are expected to revisit these conversations at the Hiroshima-based summit.

Leaders will need to find a way to hold entities that develop generative AI systems … accountable for the consequences of misinformation generated by their systems.

Wael Abd-Almageed, USC Viterbi

“Leaders will need to find a way to hold entities that develop generative AI systems like OpenAI and Stable Diffusion accountable for the consequences of misinformation generated by their systems, and create regulations that mandate some form of indestructible watermarking for AI-generated media,” said Wael Abd-Almageed, an expert in visual misinformation (e.g., “deepfakes”), machine learning and biometrics whose interdisciplinary research has been instrumental in shaping the recently launched USC Frontiers of Computing initiative.

Holding social networks accountable for allowing misinformation to propagate freely on their platforms is another issue regulators will need to address, said Abd-Almageed, who serves as a research associate professor at the Department of Electrical and Computer Engineering and as research director with the Information Sciences Institute, both housed within the USC Viterbi School of Engineering.

G7 summit: A missed opportunity for pandemic resilience?

Despite declarations from world leaders proclaiming the end of the COVID-19 public health emergency, vulnerable populations worldwide continue to face profound health disparities and a disproportionate burden of disease.

Sofia Gruskin, director of the USC Institute on Inequalities in Global Health and professor of law at the USC Gould School of Law, offered the sobering reminder that world leaders have yet to properly address the significant disparities in global health systems exposed by the pandemic.

The world seems to be moving on from the last three years without sufficient reflection on what we have learned.

Sofia Gruskin, USC Institute on Inequalities in Global Health

“The world seems to be moving on from the last three years without sufficient reflection on what we have learned about what is needed to ensure pandemics don’t unfairly hit those who are most vulnerable, or to prepare adequately for the next time this occurs,” said Gruskin, who also serves as a professor of preventive medicine and chief of the Disease Prevention, Policy and Global Health Division at the Keck School of Medicine of USC.

“Within the preparatory work to the summit, there is much talk about the need for ‘prevention, solidarity, equity, inclusiveness, multisectoral cooperation, and coordination among national, regional and global actors’ but insignificant attention to what is needed for this to occur in practice, including how the issues of equity and of intellectual property need to be addressed in the negotiations for the pandemic treaty.”