Thursday, July 20, 2006

And the G-8 accomplishes....

From Strategic Forecasting, Inc:

A Time of Change for the G-8
By Bart Mongoven

For the second consecutive year, the G-8 summit was overshadowed by other world events. Suicide bombers attacked London's rail system in 2005 as G-8 leaders were meeting in Scotland. This year the story was Hezbollah and Israel. When the G-8 meets next year in Heiligendamm, Germany, it will take effort to remember when the discussions on the G-8 agenda actually dominated the news.

In both 2005 and 2006, the items on the official agenda had little to do with bombs, guns or the conditions underlying the violence -- and in both cases, outside events completely stole the spotlight from the agreements the G-8 leaders made. This somewhat diminished the stature of the G-8 as an institution; media attention has gone elsewhere, the momentum built up by working groups on thematic issues for the summit is lost, and the leaders have appeared to be distracted by other issues.

Though addressing global security was never the G-8's purpose, voters expected the leaders present to give some response to the bombs in London and the tensions this year in the Middle East.

Thus, for two years running, the G-8 summit has been unfocused, despite ambitious action plans on climate change, debt and AIDS (2005) and energy security (2006). Extending this logic a bit further, an argument could be made that the G-8 has outlived its usefulness. The issues that it was founded to solve -- primarily global economic matters -- are now the subject of negotiations and discussions (some of which occurs under the auspices of the G-8 structure) by finance ministry officials year round.

A host of other international organizations (some formal and some informal) have been created in the past 15 years to harmonize or coordinate international action on other issues that fall within the G-8's purview, including environment, energy and global trade.

The fact that so many of the issues the G-8 was created to address now have been taken up by others as their raison d'etre shows that the G-8 correctly identified the major issues requiring international cooperation. However, these small working groups, sub-groups and separate organizations are terribly unglamorous, and national leaders stand to gain few political benefits at home from the pragmatic, incremental work plans these groups produce. So while the mission of the G-8 is being fulfilled, it offers world leaders little more than a yearly photo opportunity.

A Mixed Record

The G-8 Summit in Gleneagles, Scotland, generated great expectations in 2005: British Prime Minster Tony Blair put climate change at the top of the agenda, and rock stars Bono and Sir Bob Geldof led a giant "Make Poverty History" campaign focusing on aid and debt relief for Africa. The results so far have been mixed. Clear progress has been made on debt issues, but less progress is visible on diseases and even less on climate change.

Poverty activists argue that they were let down by the Gleneagles plan on poverty reduction, but the numbers tend to show that the G-8 agreement has scored some success in reducing the debt of the poorest countries. The specific numbers get tricky, but according to nongovernmental organization DATA (Debt, AIDS, Trade, Africa), which was co-founded by Bono, the G-8 are on track to meet their commitments. The multilateral debts for 19 of the world's poorest countries, 14 of them in Africa, already have been cancelled -- with immediate and tangible benefits -- and 44 other countries have been qualified for similar debt relief.

Despite this evidence that commitments have been taken seriously, critics still complain that the debt cancellation promises made at Gleneagles fell short of the commitments made by the same governments years earlier; they argue that the gains represent only a minor improvement in the financial status of the world's poorest countries.

On climate, there have been fewer results. Blair tacitly acknowledged at Gleneagles that the Kyoto Protocol could not provide the model for global climate change policy moving forward, and that a new approach -- one that had the buy-in of the United States and that would be based on development and sharing of technology -- would need to be embraced.

But though the private sector has made significant strides in addressing climate concerns since that announcement, no movement has really been made in U.S. or international policy. President George W. Bush did announce an agreement with Australia, China and India to pursue an alternative to Kyoto. However, not only has the U.S. climate initiative failed to become a forum for world policymaking, the most important steps toward its implementation -- meetings designed to translate broad promises into concrete activities -- have been delayed. The only progress toward a dramatic shift in national climate-change policy in the United States has come at the state level, and is completely unrelated to the G-8.

Similar outcomes have been noted with the Global Fund to Fight AIDS, Tuberculosis and Malaria -- which is constantly receiving pledges that are not fully met -- and with aspirations for reducing agriculture subsidies during the Doha Round of trade talks.

Protesters Stymied

Given the course of outside events, the G-8 summits of the past two years have not produced the kinds of results that activist groups who organize demonstrations around the meetings have been hoping for either. Protesters have become a feature of the summits that is almost as standard as the posed "family portrait" shots of the world leaders who attend them.

Radical protesters begin with the premise that the leaders of the most powerful countries in the world gather at the G-8 to plot their continued global dominance. Less radical demonstrators view the meeting as a unique opportunity to communicate their position directly to the most important world leaders. Finally, because each agenda is organized around dominant issue themes, the meeting attracts protesters who focus on the key issue of the year.

In the meeting at St. Petersburg this year, this meant a focus on energy. The protests that have been staged around G-8 meetings have been large at times and, in some cases, have led to riots that turned violent (as in Genoa, Italy, in 2001). From 1999 to 2003, the G-8 summit was seen as a place to make complaints known about the power amassed in capitalist countries and to protest corporate globalization. This fad faded relatively quickly, however, and those who have gathered to protest at meetings in recent years tend to be issue-focused activists, such as the debt-relief campaigners from churches who demonstrated at Gleneagles.

Protests at the St. Petersburg venue essentially were outlawed by the Russian government (and those identified as potential protesters soon found themselves being conscripted into military service).

Across the globe, however, activists organized demonstrations to coincide with the meeting, hoping to capitalize on the media coverage of the meeting to bring attention to their campaigns.

Most of the protests this year focused on climate change, though G-8 leaders separated environmental discussions from energy discussions as much as possible. Meanwhile, tensions in the Middle East ratcheted upward suddenly and seriously. Thus, for the second consecutive year, the protesters found the same thing as the G-8 leaders themselves: the media coverage they hoped to attract to their agendas was not to be found.

Finding a Purpose

As it stands, the most pressing global issue of the day -- wars in Afghanistan, Iraq and Lebanon, and the possibilities of terrorist strikes around the world -- is not a subject for the G-8 meeting. So what then is the purpose of the G-8 summit? In some ways, the G-8 leaders are in a bind. On one hand, the annual summit is an event where important leaders gather to talk. This alone makes it newsworthy.

Further, the G-8 as an institution fosters a number of working groups. Government representatives meet with little fanfare to discuss issues such as currencies and trade, judicial harmonization, terrorism and organized crime. The action plans created for the G-8 summit are the result of these conversations, but these sub-groups do much more behind-the-scenes work that does not appear in the consensus statements and receives little media attention, but nonetheless brings changes in public policy within G-8 member countries.

On the other hand, the agreements that heads of state make -- with much fanfare -- at the summits are not addressing the public policies that are foremost in the public mind. And this makes the group seem less relevant. Moreover, the concessions they make in the official documents amplify the fact that the official work of the summit is highly political -- and often geared toward each leader's domestic audience rather than the rest of the world.

A line in the 2006 St. Petersburg consensus statement illustrates this well: "Those of us who have or are considering plans related to the use of safe and secure nuclear energy underlined its important contribution to global energy security." Paraphrased: Those of us who agree that this is a good thing agreed that this is a good thing; those who do not, did not. Such lines capture the naked political purpose the G-8 serves.

The heads of state look like world leaders when they attend the G-8, and every head of state at the summit derives some political benefits at home from attending. For Bush, whose unilateral tendencies in foreign policy have been widely criticized, the summit is an opportunity to show that he is willing to work in international forums and to cooperate in global affairs. For leaders like Stephen Harper and Romano Prodi, it provides a sense of legitimacy; voters in Canada and Italy see these new heads of state on the same global stage as George W. Bush and Vladimir Putin.

The topics that are selected for discussion further allow for domestic political gain. Consumers in all Western countries are being affected by high energy prices, and Russia's use of natural gas supplies as a tool in foreign policy made "energy security" a meaningful term for Europeans. Of course, G-8 leaders did nothing in St. Petersburg to increase world oil supplies or to decrease demand for them -- nor did they win a commitment from Putin that Moscow would not again use its natural gas supplies as a weapon against European governments. The leaders did, however, talk about these issues, which from a political standpoint is the next best thing to solving the problem.

Moving forward

Despite the overt indications that the G-8 summit has devolved into a three-day photo op, the degree of cooperation between the G-8 governments is increasing markedly -- and not just at the diplomatic level. Regulators, judges and legislators are meeting more and more frequently to learn from each other, and broad consensus among the world's largest democracies is emerging on many global regulatory issues.

On the surface, it would seem a paradox that the G-8 has become a less-meaningful talk shop just as government representatives are coming together in meaningful ways more often, but the development actually makes sense. As government representatives work together, there is less friction between G-8 governments -- and thus, fewer issues that need to be resolved at the head-of-state level.

Finance ministers have a number of forums (the G7, G-8 plus 5 and G-20) to discuss matters of global financial stability, exchange-rate volatility and other critical issues. Securities regulators have the International Organization for Securities Commissions (IOSCO), which attempts to regulate corporations and financial institutions effectively in an era of globalized business. Intelligence on terrorism and organized crime is shared better than ever before among state police organizations, and through Interpol and other global networks of police forces. Dozens of these global government networks exist and are efficiently harmonizing laws and regulations across borders.

The G-8 member states might be comfortable in this evolving role, but this is unlikely. It is more likely that successive G-8 hosts -- who set the agenda for the organization for a year -- will try, as Blair did, to increase the relevance of the group's work. But with security issues off the table, their options are limited. The temptation would be to follow Blair's model and bring forward a major, somewhat ignored global issue that the assembled nations actually can address, with great certainty of success. The downside is that this moves the G-8's work farther from the most immediate and pressing concerns of the world.

Another option would be to draw more attention to the intergovernmental work that takes place behind the scenes. This would show the world the heretofore invisible but important work that the G-8 and its member states do -- but with the risk of awakening fears of either an emerging "world government," or of global capitalist collusions, among those at the extreme ends of the political spectrum.

Finally, they could acknowledge that the most important work accomplished at the G-8 summit is relationship-building between world leaders -- a time for casual conversation (and, oddly, the occasional back rub) -- and to openly admit that it is otherwise a retreat and photo opportunity, with a discussion agenda that is transparently meaningless.

The third option seems the least likely, while the first holds the most promise for the G-8 leaders -- who, after all, win elections by promising to achieve visions, not simply to deal competently with international frictions.

Send questions or comments on this article to analysis@stratfor.com.

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