G8 to hold annual summit next week

Surging food and oil prices, inflation and a credit crunch that has depressed global economic growth have left leaders from the Group of Eight economic powers facing a grave combination of economic woes ahead of an annual summit next week.

The outlook has darkened dramatically since last year's summit in Germany, when the G-8 leaders declared the global economy was in "good condition" and oil cost 70 US dollars a barrel - which seemed high at the time.

This year's host, Japan, had put global warming at the top of the summit's agenda, but the dilemma of how to respond to accelerating inflation and slowing global economic growth is likely to become the major topic of discussion. However environmental solutions and new technologies continue to be a pressing issue.

As the city of Hokkaido in northern Japan gears up for the summit -due to begin on Monday- conservationists are hoping to make their message heard. Environmentalists said they planned to use the opportunity to showcase ecological solutions to climate change. One project revolves around storing snow is sub-zero containers until summer when it can be used to cool the air.

Noriyuki Hosaka, a Shin Chitose Airport official, said there were plans to use the technology at the Shin Chitose airport near Sapporo City in Hokkaido. Hosaka estimated the new method could cut the facility's energy bill by 60 (m) million yen (561-thousand US dollars).

The technology is in line with the goals set by the Japanese Prime Minister, Yasuo Fukuda. Last month, Fukuda announced that Japan will cut its greenhouse gas emissions by 60-80 per cent by 2050. Fukuda insisted Japan could match or better European reduction levels over the next 12 years. He hopes to use the summit -which he will chair- to help achieve international consensus on measures to reduce greenhouse gas emissions. But for now, the issue of climate change is likely to be overshadowed by the decline in the global economy and soaring oil and food prices.

Oil has doubled to above 140 US dollars and food prices have jumped, sparking massive protests across the globe and raising the threat of political instability. Analysts are skeptical that the G-8 leaders -representing the US, Japan, Britain, France, Germany, Russia, Italy and Canada- will come up with much beyond urging major petroleum producers to boost output, reiterating the message of their finance ministers, who met last month in Osaka.

Foreshadowing possible disagreement among the leaders, the finance ministers were divided on where to assign blame for the run-up in oil prices. Germany, France and Italy held speculators largely accountable, while the US and Britain said the focus needed to be on boosting production capacity that has barely kept up with growing global demand.

Soaring crude prices have already forced India, Malaysia, and Indonesia to cut subsidies and raise state-set prices on gasoline and other fuels. Last month, China hiked fuel prices as much as 18 percent. At the same time, prices of corn, wheat, rice and soybeans and other farm goods have surged due to changing diets, urbanization, expanding populations, extreme weather, growth in biofuel production and speculation.

The G-8 summits were originally meant to focus on economic issues, but the agenda has expanded to include militant extremism, Africa's development and the environment. The group's membership also has grown from six to eight, adding Russia in 1997. But many argue that it should be expanded to include China, the world's fourth-largest economy, and other emerging powerhouses like India and Brazil, especially to tackle global issues like energy and climate change.

Already, the G-8 has been reaching out. It plans meetings with African leaders on the summit's first day, and later with leaders from China, India, Mexico, Brazil and South Africa - countries that someday might be a part of the Group of 13.