G8's Gilt is Tarnished
By Gustave Massiah
Le Monde DiplomatiqueMay 2003
The rich nations' club, the Group of Eight, meets in June. It no longer commands the respect that it once did, since activists of an alternative world began to suggest other viable ways of order and financing the globe.
The war on Iraq will overshadow the meeting of the Group of Eight, the world's richest and most powerful countries, in í‰vian, France, in June. They first met in 1975 and the group has expanded to become a global institution. But as anti-globalization protests and possible alternatives to neoliberalism have multiplied, so has opposition to the G8; the activists of the alternative world now contest not only the policies but the nature of the institution.
The invasion of Iraq by the United States and United Kingdom begins a new and troubled era, emphasizing issues that have always bedevilled the G8: the structure of the shifting global economy and the future of international institutions.
The G8 cannot be a global government since there is no world state (1), but that does not mean that its activities are just symbolic. It brings together the heads of the leading governments in a sort of a union. With its annual meetings, its "sherpas" (permanent advisers who serve as administrators), its broad range of experts, its links to international institutions and guaranteed media access, the club has a permanent presence. The G8 initially gave the wealthiest nations a forum to resolve their differences; conflicts frequently arise between them, and the world is far from united. This private club has enabled its members to reach gentlemen's agreements. In the 1970s discussions centered on recession, monetary policy and the oil crisis. After the collapse of the Soviet empire, the debate turned to US pre-eminence. Today, with the global economy faltering, the US occupying Iraq and neoliberalism in crisis, national grievances have come to the fore and may affect the G8's future role.
French president Valéry Giscard d'Estaing organized the first economic summit of what was then the G6, in 1975. He invited the leaders of the US, UK, West Germany, Italy and Japan to meet at Rambouillet, near Paris. In 1976 Canada became the seventh member; and in 1997 Russia joined. By 2000 the group (the G8 less Russia) represented 12% of global population while accounting for 45% of production and 60% of all military spending (2).
The Rambouillet declaration stated: "We came together because of shared beliefs and shared responsibilities. The growth and stability of our economies will help the entire industrial world and developing countries to prosper. We intend to intensify our cooperation in the framework of existing institutions as well as in all the relevant international organizations" (3). The desire for mutual cooperation arose because of the oil crisis, US-French sparring over the dollar's role in the international monetary system, and US-German differences over official responses to the 1974-75 recession. From 1975 to 1980 neoliberalism supplanted the Keynesian economic model. The defining moment was in 1979 when the Federal Reserve Board decided to increase drastically interest rates in the US. The first priority of the G7 summit in Venice in 1980 was the fight against inflation, and only nominal attention was paid to unemployment (4). There was a burgeoning third-world debt crisis, but globalization's neoliberal phase had begun.
The G8 actively imposed neoliberal policies while overseeing globalization and its pillars of stabilization, liberalization and privatization. Despite criticism, this doctrine was formalized in 1990 when economist John Williamson coined the term Washington consensus. This had seven policy recommendations: fiscal discipline (balanced budgets and tax cuts); financial liberalization (with capital markets determining interest rates); trade liberalization (eliminating tariff protections); opening up national economies to direct foreign investment; privatizing state-run enterprises; deregulation (eliminating barriers to competition); and protecting multinationals' intellectual property rights. To achieve these goals the G8 depended on financial institutions such as the International Monetary Fund (IMF) and the World Bank, in which its members had a major stake. These institutions provided the framework for neoliberal globalization, with the World Trade Organization (WTO) playing a leading role.
The G8 wields no direct power since its recommendations are not binding on countries, not even its own members. Economic clout is no longer the preserve of governments, not even those of the G8. Still, all economies require regulation, flexible institutions and authorities capable of long-term strategic thinking.
Globalization is a study in contradictions: the G8 has both perpetuated and profoundly shaken the established order while trying to serve the interests of its members. It started a strategy of economic recovery, led by the most powerful nations. It actively opposed decolonisation, using its management of the third-world debt crisis and discrediting repressive and corrupt regimes. It used the arms race and impressive human rights initiatives to thwart the Soviet bloc, discrediting regimes that were dashing democratic hopes. And it targeted the social pacts of the post-1945 era by attacking the working class as a social construct, relying on neoliberal policies and privatization programs. This undermined the control of nation-states and their citizens.
Opposition to the G8 means a new reading of the neoliberal phase of globalization (5). Until 1984 the G7's efforts were almost unopposed. But the austerity measures it imposed on impoverished third-world countries, combined with falling prices for raw materials, soon became intolerable. In 1980 protests rocked the IMF and, indirectly, the G7 (6). NGOs began exerting direct pressure on the G7 and opposing its policies. When the G7 held a summit in London in 1984, opponents assembled for their first meeting, organized by The Other Economic Summit, later the New Economics Foundation (7).
In 1989, in response to government propaganda for the bicentennial of the French revolution, the organizers of "í‡a suffat comme ci" ("Enough's enough!") drafted a petition, signed by writer Gilles Perrault and singer Renaud, and staged a huge concert at the Bastille. At this alternative gathering, the world's "seven poorest nations" denounced G7 philosophy.
Those who took to the streets of Lyon during the 1996 G7 summit rediscovered the spirit of the Parisian demonstrators; the G7 was challenged. When the Berlin wall fell in 1989, the Washington consensus extended its policies around the world. The rise of social movements in France, Italy, Germany, South Korea and the US coincided with anti-G7 demonstrations in 1994-95.
The 1998 Birmingham summit was notable for Jubilee 2000, an organization that confronted the G8 over third-world debt, taking member-states to task for their role as majority shareholders in international financial institutions. There were debt protests in Cologne in 1999, when the G8 finally committed itself to (conditionally) reducing the debt loads of the most impoverished countries. In 2000 the G8 met in Japan, where the protests focused on debt relief and US military bases in Okinawa. The Okinawa International Forum on People's Security called for demilit arisation.
Anti-globalization protesters used the G8 summit in Genoa in July 2001 to prove their strength, with alternative experts willing to challenge neoliberal doctrine; a new generation of young activists; and the power of public opinion, increasingly worried about globalization's negative consequences on society, the environment and democracy.
The Genoa summit, which followed protests in Quebec City in April 2001 against the Free Trade Area of the Americas, was a step forward in quality and quantity. The Italian authorities' failure to quell protesters prompted the G8 to choose the remote village of Kananaskis in the Canadian Rockies for 2002. After protests at the 1999 WTO conference in Seattle, and the efforts of the World Social Forum in Porto Alegre (Brazil) in 2001 and 2002, the protest movement began to shift its focus from anti- globalization to alternative world solutions. Anti-war protesters joined with the anti-globalization movement in Florence at the 2002 European Social Forum and at the January 2003 World Social Forum in Porto Alegre. On 15 February 10 million demonstrators turned out around the world to protest against the war on Iraq.
The damage caused by global economic, political and military policies has awakened public opinion. Protests have focused on the G8 as a tool of globalization: heads of state and government, representing the privileged few, have no right to make unilateral decisions affecting the entire planet. These leaders may have won democratic elections in their countries, but they have no right to rule the world. Their pretensions to global leadership are illegitimate. The disappearance of the G8 would not mean greater turmoil: it has already failed to prevent wars and disorder. The G8 has undermined the United Nations, an imperfect body but one with greater legitimacy.
The issue of international institutions has been central since the fall of the Berlin Wall. The G8's philosophy favored institutions founded in 1944 at the Bretton Woods conference: the World Bank and the IMF. The G8 sees them as efficient and controllable, as it does in particular the WTO and its mechanisms for resolving trade disputes. Indeed the WTO might serve as a model for restructuring the inefficient UN bureaucracy, much scorned in the post-colonial period.
There were already signs of a new era before the war on Iraq: lingering financial crises, particularly in Argentina; the decision of Brazil, South Africa and India to give preference to the right to healthcare over commercial considerations, especially concerning generic drugs; and the crisis in neoliberal circles stemming from Russia's controversial transition to ultraliberalism (8).
The international system must also deal with US power. Should we view it as a new form of imperial hegemony, based on socio-economic disorder (9)? Or should we subscribe to Immanuel Wallerstein's thesis, according to which the US, having lost its dominant economic and ideological role, is forced to rely on its overwhelming military might, as is traditional with fading superpowers (10)? This decline could take many years, making the world more vulnerable and dangerous.
The UN has demonstrated that it still has an important role to play. Throughout the Iraq crisis it has not turned into the rubber stamp that some hoped for and others feared. But it is at a crossroads. Without radical reforms, it will have a difficult time standing up to the US. If it can foster global democracy, it might give globalization a new meaning.
Translated by Luke Sandford
* Gustave Massiah heads the Centre de recherche et d'information sur le développement (Crid)
(1) Attac, Le G8 illégitime, Mille et une nuits, Paris, 2003.
(2) Gérard Duménil and Dominique Lévy, L'histoire et la nature du G8, Centre d'études prospectives d'économie mathématique appliquées í la planification, Paris, 2003.
(3) Rambouillet declaration, 17 November 1975. The group's declarations are on the French president's official website
(4) Several analyses of the G8's declarations are available. See René de Schutter, Analyse des déclarations de 1975 í 1995, Groupe de recherche pour une stratégie économique alternative, Brussels, 1996. For post-1996 declarations, see excerpts and analyses available at france.attac.org
(5) See John Hathaway, Jubilee 2000 and the G8, Nason Press, London, 2000; Christophe Aguiton, Le monde nous appartient, Plon, Paris, 2001; Philippe Le Prestre, Les relations entre le G8 et la société civile, Observatoire de l'écopolitique internationale de l'Université du Québec í Montréal, Montreal, 2002; and www.cedetim.org
(6) See Serge Cordellier (ed), Le nouvel í‰tat du monde: Bilan de la décennie 1980-1990, La Découverte, Paris, 1990.
(7) See Mary Kaldor, Global Civil Society 2001, Oxford University Press, 2002.
(8) See Joseph Stiglitz, Globalization and its Discontents, WW Norton, New York, 2002.
(9) See Alain Joxe, The Empire of Disorder, MIT Press, Cambridge, MA, 2002.
(10) See Immanuel Wallerstein's writings, which appear in Foreign Policy magazine, Courrier International no 629, 21 November 2002.
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