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THE ROVING
EYE
What is the G8 good for?
By Pepe Escobar
The Group of Eight (G8) is
not supposed to behave as the government of the world.
But as a permanent world institution grouping the
leaders of major powers (but where is China?) in a sort
of shareholder's syndicate of the world economy, it
increasingly behaves like it is. The 2003 G8 summit in
Evian, France, starting this Sunday, is also signaling
something like the death certificate of the United
Nations Security Council. With the G8, via hosting
French President Jacques Chirac extending invitations to
the heads of state of China, India, Brazil, Mexico and
South Africa, Evian aligns the five permanent,
veto-power-wielding members of the Security Council (the
US, China, Russia, France and Britain) plus four big
economies with no veto power (Japan, Germany, Italy,
Canada), plus major regional powers.
The G8
(initially G5) has existed since 1975, a French
initiative by then-president Valery Giscard d'Estaing
(who today is in charge of drafting the European
constitution). He initially invited the US, Britain,
Germany and Japan. Then there were seven with the
addition of Italy and Canada, and finally Russia in 1997
made it eight. The president of the European Commission
(currently former Italian premier Romano Prodi) is a
permanent guest.
Since the 1980s, the group has
acted as the de facto commander of the spread of
globalization. The initial G7 doctrine has always been
"stabilization, liberalization, privatization". This was
formalized in 1990 under the famous (or infamous)
"Washington consensus". Everybody is familiar with the
rules: financial liberalization, fiscal discipline, no
custom duties, total freedom for foreign direct
investment, no-holds-barred privatization, deregulation
and full protection of intellectual property rights of
transnational companies.
The G8 does not have to
institutionally enforce anything. This is the work of
the International Monetary Fund (IMF)and the World Bank:
the bulk of whose capital is controlled by G8 countries.
But the G8 dictates the institutional framework of
globalization - and the World Trade Organization carries
and enforces the minutiae.
Until the G7 of 1984
in London, there were virtually no protests against the
powerful club. But the social cost of liberalization as
it was imposed on indebted developing countries, allied
with a fall in commodity prices, led to an explosive
situation in the south - and growing, violent criticism
of the IMF and of course the G7 itself. The culmination
of this process was the G8 of 2001 in Genoa, where a
new, young, militant generation openly defied the
predominant neoliberal mantras. And world public opinion
increasingly supported this revolt - especially in the
developing world, but also in Europe.
The
negative impact of the Washington consensus model of
globalization on social issues, on the environment, on
rules of democratic justice had been more than visible
since the end of the 1990s. In Genoa, the conservative
Silvio Berlusconi government in Italy tried to brand as
criminals those who opposed what is nothing less than
the economic, political and military management (or
mismanagement) of the world. It failed. As a result, the
G8 is now barricaded against the people, a classic case
of the street against the palace, a symbol of the unjust
world order denounced by the alter-globalization
movement.
This Evian G8 though, is crucial. The
war against Iraq is just the latest in a series of
complicating factors in international relations: a
cyclic financial crisis; the debacle of the neoliberal
mantras in Russia and Argentina, to name but a few
examples; the will of developing countries to privilege
health over multinational company profits; and now the
overarching question of American hegemony.
Since
the 2001 Afghan war, in Europe, Asia, the Middle East
and Latin America, this correspondent has found what are
essentially two major views of the current situation.
One sustains that as the US has lost its economic and
ideological hegemony over the world, it has to resort to
military might to enforce its agenda. Another view
sustains that the American project as developed by the
hawks congregating in the American Enterprise Institute
(AEI) and the Project for the New American Century
(PNAC) is a new imperial domination one based on
perpetual world chaos.
This G8 won't exactly
build many bridges. For instance, France, Russia and
China certainly don't like what they see happening in
Iraq. Saddam Hussein's regime collapsed seven weeks ago.
Oil production is back (only 700,000 barrels a day for
the moment), controlled by the US, or rather Kellog,
Brown and Root (KBR), a Halliburton subsidiary, which
landed a global, mega-lucrative contract to explore
Iraqi oil. The new Iraqi "oil minister" is Gary Vogler,
a KBR employee.
The official main theme of Evian
will be how to revitalize the sputtering world economy.
But Chirac has been very clever to also move to center
stage at this G8 the seemingly unsurmountable problems
of the developing world. He talked to NGOs, and to
leaders of different faces of the alter-globalization
movement; he invited heads of state of many African
countries to Evian, and also Brazilian President Luis
Ignacio Lula da Silva, the former metalworker's union
leader who enjoys enormous popularity all over the south
and also in Europe. Chirac's message to his G8 partners
is clear: we have to be very serious about the negative
consequences of globalization, and the spread of global
poverty, as much as the world has to devise ways to
prevent financial crisis and to manage water resources.
The coup de theater in Evian will be the
great post-Iraq reconciliation party, played out for the
world's cameras. Many won't be convinced even if George
W Bush and his faithful escort Tony Blair enjoy a
fabulous bottle of Chateau Lafitte with an all-smiling
cast of Chirac, Gerhard Schroeder of Germany and
Vladimir Putin of Russia. Speaking to the Financial
Times, Chirac said that the American war was
"illegitimate", and that victory did not legitimize it.
But at the same time he considers the trans-Atlantic
relationship as "essential". So the message is clear:
Baghdad is part of the past, we must concentrate on
revitalizing the world economy. Chirac even refuses to
see the new power of the euro against the dollar as
another front in the still undeclared soft war between
the US and Europe.
Critics already points out
that this "social" G8 would only be credible if the big
powers decided to open their markets with no
restrictions to agricultural products of developing
countries. In this sense, it will be quite interesting
to observe what a leader like Lula can do when invited
to the court of the powerful. Lula is now the spokesman
for a Latin America - and a developing world -
devastated by financial crises, unemployment, lack of
competitiveness and mind-boggling social problems. Fifty
percent of Africa's population lives in utter poverty -
their suffering increased by drought, wars and HIV/AIDS.
Blair, when in non-warrior mode, even called it "a scar
on the consciousness of the world".
One of
Lula's big ideas is a program called "Zero Hunger",
supposed to finish with hunger in Brazil in four years
(the World Bank is very enthusiastic about it). Lula
wants to use the G8 to sell it to the global arena. His
powers of persuasion should not be underestimated. Last
January, he went to the World Social Forum in Porto
Alegre to talk with the alter-globalizers and then flew
to Davos to convince the world's financial and corporate
elite to fight against poverty.
To finance this
scheme, Lula proposes a tax on arms and weapons sales.
This won't increase his popularity with America's
military-industrial complex. But Lula also says that
part of the debt service of the world's poorest
countries could also increase the capital of this Global
Fund against Hunger - something that will tremendously
increase his popularity with Chirac's African guests in
Evian.
Lula remains a harsh critic of the
neoliberal mantras and the IMF. But in an interview in
Brasilia this week, he warned the G8 members "there's no
other viable solution now than a new dynamic of
investment". As an example, he points to Spain, Portugal
and Greece, all of which rose up to financially sound
status thanks to investment by the European Union. To
promote growth in developing countries, says Lula, is
something of the highest interest of industrialized
countries: "It is the best way to fight terrorism,
smuggling, narcotrafficking and organized crime."
The south depends on the north's capital
invested in productive activities to restart economies
plagued by recession; and the south also depends on the
end of protectionism as applied by most of the north.
Evian may only make sense if guests like Brazil and the
Africans convince the barricaded G8 that only a more
equitable and democratic conception of international
relations can restore any meaning to globalization.
(Copyright 2003 Asia Times Online Co, Ltd. All
rights reserved. Please contact content@atimes.com for
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