GROUP OF EIGHT: Nuclear India, Asian Currency Crisis Top Agenda

By IPS Correspondents Reprint | | Print |

Dipankar De Sarkar

BIRMINGHAM, Central England, May 14 1998 (IPS) - Leaders from the world’s seven richest nations and Russia meet here for a three-day summit beginning Friday with the debate dominated by India’s nuclear tests and East Asia’s political and financial crises.

Few G-8 summits in recent years have had to tackle such huge — and potentially cataclysmic — political and economic issues as this one.

The leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States have before them the daunting task of forging a united stand on India after it conducted a series of five nuclear explosions this week in defiance of world opinio n.

In addition, the summit leaders are expected to discuss ways to strengthen the international financial system in deliberations held in the backdrop of rising political violence in Indonesia — the East Asian countries most affected by last year’s financi al currency.

The two issues threaten to hijack the summit agenda, which was originally billed to discuss other issues such as global employment, crime, debt, global poverty and nuclear safety in Ukraine in addition to the Asian economic turmoil.

However, the Asian turmoil has taken clear political overtones, according to observers.

And the Indian nuclear tests are set to dominate the G-8 summit though there are clear signs that the leaders of the world’s economic giants are divided on how to respond to the challenge thrown by New Delhi.

While the U.S. has already put in a package of sanctions and Japan has taken stringent measures to cut aid, France, Britain and Russia have so far only responded with muted protests.

All the G-8 countries have more than a little at stake in India. The gathering includes four of the five recognised nuclear powers — Britain, France, Russia and the United States. In addition, Japan is the largest aid donor to India, and the U.S. the la rgest private investor, with Britain and Germany close behind.

U.S. president Bill Clinton hinted in Germany Wednesday that he will try to persuade his G-8 colleagues to come up with a stronger response to the Indian tests, saying: “It is imperative we make clear our categorical opposition. We will ask other countr ies to do the same.”

Clinton’s national security adviser Sandy Berger said Wednesday he hoped the G-8 leaders would take “concrete and tangible action…. to make it very clear that the era of nuclear testing is ending and India is… swimming against the tide.”

British premier Tony Blair has made clear that Britain did not plan to impose sanctions, but in spite of this, Britain Thursday recalled its High Commissioner to India, British foreign secretary Robin Cook announced in the House of Commons.

Cook said the G-8 summit would discuss how Britain and Europe could effectively convey to India their anxiety about the damage done by the nuclear explosions to the stability of the region. There were loud calls for sanctions during the Commons debate.

Russian president Boris Yeltsin has similarly backed “diplomatic means” to pressure India and France — itself the subject of international criticism for nuclear tests carried out in 1995 and 1996, opposed sanctions.

“This is surely not the right method for attempting to assure that India joins those nations wishing to sign the (nuclear) non-proliferation treaty,” a French government spokesman said Wednesday in Paris.

Chancellor Helmut Kohl of Germany said nuclear tests were “wrong” but that any decision on German sanctions would have to be studied.

“India, for better or worse, has put itself at the top of the agenda, but it’s not going to be the only issue,” Richard Haas, national security adviser to former U.S. president George Bush, was quoted saying this week.

The other major issue before the summit is the ongoing political turmoil in Indonesia, indicating growing public unease over the fallout of 1997’s financial crisis that hit East Asia.

The summit leaders will have before them a set of proposals on economic issues prepared by G7 (all, except Russia) finance ministers in a meeting earlier this month preparatory to the Birmingham summit.

The proposals, called the ‘Birmingham Process’ are designed to bring about greater stability transparency in international financial dealings.

The proposals, which are to be discussed in detail by lending agencies such as the International Monetary Fund (IMF), contain a code of monetary and financial policy. Under it, usable Central Bank reserves would become known and far fuller information th at previously available would be given, according to Britain’s Chancellor of the Exchequer (finance minister) Gordon Brown.

He has also spoken about a code of corporate behaviour, which includes “principles for auditing, accounting and for disclosures in the corporate sector.”

Though G-8 finance ministers have also called for a ” new financial architecture” with closer cooperation between the IMF and its sister organisation the World Bank, these proposals do not meet the demands raised by many nongovernmental organisations f or far-reaching reforms of the IMF.

NGOs gathered at Birmingham with their own alternative P-8 (Poor eight) summit are calling for G-8 leaders to seriously address the debt problems of the world’s poorest and most heavily indebted countries.

“Year after year, G-8 summits begin with bold ambitions to tackle the fundamental inequalities between nations — and year after year the summit is hijacked by the story of the day,” said Andrew Simms of Christian Aid.

“The attraction for the world leaders of talking about whatever is in the headlines is enormous, but ignoring the debt crisis only leaves millions trapped in the cycle of poverty and unpayable debt,” he added.

Christian Aid’s P-8 summit, held on the fringes of the fashionable conference centre where the G-8 will meet, is being attended by representatives from eight heavily indebted poor countries — Malawi, Ethiopia, Tanzania, Mozambique, Bangladesh, Bolivia,

Nicaragua and Jamaica.