Global Policy Forum

By William Antholis and Daniel Benjamin

For the last few days, Washington has been fixated on the question of whether President Clinton would leave the Middle East peace talks in Camp David to attend the annual G-8 summit in Okinawa. Critics ask: What does the G-8 do anyway, aside from give world leaders a chance to bask in an aura of collective importance?

This question would have been fair a few years ago, but these annual meetings are no longer pompous photo-ops, thanks largely to U.S. leadership. At a time of increasing fears over globalization, the G-8--the world's seven leading industrialized democracies plus Russia--has positioned itself as the world forum for taming the forces of the global economy. The group is a democratic alternative to the United Nations Security Council, which is often hobbled by conflict.

The original G-7--Canada, France, Germany, Britain, Japan, Italy and the U.S.--has met since 1976, sharing economic ideas, coordinating financial policies and directing the International Monetary Fund and World Bank. But years before globalization became the obsession of the punditocracy, the G-7, led by President Clinton, began confronting the dangers emerging from an interdependent global economy.

The turning point came in Halifax in 1995, when two developments focused the talks being held there. The first, prompted by the financial meltdown in Mexico and the U.S.-led bailout, was the creation of an IMF fund for future such bailouts. This fund required recipients to open their finances to outside scrutiny and to combat corruption. Many criticized this focus on good governance, but it bore fruit in this month's successful Mexican election, which, in part, was made possible by a reform process begun in Halifax. An effort to relieve the debt of poor nations employing similar conditions was also begun. Some 20 countries may qualify for debt relief by the end of this year.

The second development was that the G-7 realized that governing the global economy was not simply about managing markets.

In particular, it recognized how difficult it would be to tackle global problems if Russia rejected economic and political reform. By inviting Boris N. Yeltsin to join the annual meetings, and thus creating the G-8, the leaders strengthened support for reform in Russia and laid the groundwork for a distinctly democratic approach to handling global security issues. This year's summit will be a useful reminder to Russia's Vladimir V. Putin, who is attending the G-8, of the democratic standards to which he will be held.

Subsequent summits have tried to tackle one or two political issues at a time. The new announcements expected in Okinawa--money to fight AIDS and efforts to bridge the digital divide between rich and poor nations--are the latest steps in this broader effort to deal with the challenges of global integration. The message is clear: These issues are too important to be held hostage by the U.N., with its fractious General Assembly and a Security Council that includes an undemocratic China. G-8 initiatives emphasize what democracies do best: turn the free flow of information to common advantage.

This theme has been consistent since Halifax. Moscow and Lyon (1996) developed action plans to promote nuclear security and fight terrorism. Denver (1997) produced agreements to tackle financial crimes and key environmental issues, including global warming. Birmingham (1998) and Cologne (1999) stepped up efforts to respond to the world financial crisis. All of these efforts stressed transparency, information exchange and accountability.

Where should the G-8 go from here? Three challenges stand out:

* Demonstrate effectiveness. The G-8 develops concrete action plans without a cumbersome bureaucracy, but the group needs to show that its initiatives are not spinning into oblivion, leaving behind only lengthy communiques. Public reviews of initiatives, such as the recent $ 350-million effort to seal and shut down the Chernobyl reactors, would help.

* Forge connections among global issues. For example, how should global institutions for trade and finance be tied to fighting crime or protecting the environment? Environmentalists chastise the IMF for encouraging austerity measures in developing countries that gut resources for protecting forests or that promote short-sighted "least cost" energy policies. Most nations have cabinet meetings to address such policy linkages. The G-8 is the closest thing the world has in this regard. It needs to step up to the plate and work these issues out.

* Build legitimacy through openness. G-8 leaders should have learned two lessons from the failed World Trade Organization meeting in Seattle. First, managing globalization cannot be done behind closed doors. Opening up the IMF, World Bank and WTO to parliamentarians, nongovernmental organizations and the media must be a responsibility, not an afterthought.

Second, developing countries cannot be overlooked, especially democracies such as Argentina, Brazil, India, Korea, Mexico, the Philippines, Thailand and South Africa. Encouraging them to be leaders in the developing world would underscore the rewards that can come from making the hard choices of pursuing reform.

The G-8 will neither supplant the U.N. nor deliver dictates to the world community. Yet it can produce sustained progress on compelling global issues and demonstrate the advantages that democracies have when they work together. That's what, in the end, will dispel the memories of photo-ops past.

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