22.06.1995

G7 goes nowhere

THE G7 summit in Halifax, Nova Scotia, represented the coming together of the seven most powerful economies on earth, who are responsible for almost half of world trade. Its task: “the renewal and revitalisation of the global institutions to assure the world of prosperity and well-being in the 21st century.”  They talked, arranged to discuss unemployment in a year’s time ... and then they went home.

Where they disagreed with one another, they decided to do next to nothing. As on Britain’s plan to use IMF gold reserves to reduce world debt, resulting in this minor question being cleverly removed from the agenda. Where they agreed, they decided to do nothing at all. Jacques Chirac, the French president, complained: “Foreign exchange speculation is the Aids of the world economy.” Reason enough to do nothing about it. When they actually decided to do something, as on Bosnia, they adopted two contradictory policies. At least they agreed it would not work. As John Major said,   “Nobody has an off-the-shelf solution to the nightmare in Bosnia.”

 The draft communiqué, drawn up three weeks ago, said: “In most of our countries, economic growth is robust.” Yet it is clear that world growth is slowing and the future is uncertain. The anarchic forces that drive the world economy are unpredictable and make planning impossible.

 The relations between the great powers is becoming more antagonistic, which is why they can only agree on negatives. Will Hutton of The Guardian (June 19) writes,

“The message from Halifax is that the nation states must conform to the dictates of the existing financial order and rapidly internationalising markets, and that even if the relationship is massively unbalanced it will stay so.”

 This is a recipe for instability. The only way the nation states can hope to improve their bargaining position against market forces is to huddle together in mutually antagonistic trade blocs. The lesson of two world wars has been that whatever imperialism cannot get through trade it will eventually try and get through force of arms.

Arthur Lawrence