AN UNSTABLE WORLD IN SEARCH OF WORLD LEADERSHIP

By Ann Pettifor and - - Reprint | | Print |

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LONDON, Jul 11 2005 (IPS) - The statement issued by the G8 on the 8th July illuminates the many blind spots, the deep divisions, the lack of ambition and above all, the failure of world leadership by eight presidents and prime ministers. Their blind spots have grown to the size of moats; their divisions have deepened; and their ambitions for climate change and for Africa have been slashed to fit in with the apathy and torpor of US oil companies and high-worth taxpayers. The question we must pose is this: do these men deserve the accolade – “world leaders”? , writes Ann Pettifor, director of Advocacy International and editor of “Real World Economic Outlook”. It is in relation to Africa that these eight men have most clearly illuminated the feebleness of their ambition, and the weakness of their leadership. The talk was of increasing aid to Africa by $50 billion in 2006 to tackle the plague that is AIDS, to replace the past stripping of Africa’s assets, and to address the impoverishment of that continent. Instead, after a long statement hectoring African leaders on “good governance” and “promoting growth” the eight leaders committed no new money to Africa in 2006. Instead they simply reiterated past commitments to increase aid to Africa by $25 billion in five years time. As UK NGOs have noted, only £10 billion of this commitment will be new money in 2010 far less than the additional $50 billion in 2006 that the social movement “Make Poverty History” had campaigned for.

First, lets examine their blind spots. George Bush’s administration, backed by oil companies, is turning a blind eye to the warming of the planet (indeed he insisted on removing the first sentence of a statement that referred to the “warming of the earth”). By so doing, Bush and his government are endangering the planet, and all of our futures. Other, more conscious presidents and prime ministers refused to stand up to, and isolate Bush. Instead they capitulated, issuing a weakly-worded statement weaker even than previous G8 pronouncements on climate change, issued, remarkably, by George Bush’s father.

The G8, at a time when scientists are universally panicked by the warming of the planet, made no concrete commitments to cut emissions, nor have they provided a timetable for such cuts. Instead they have put their signatures to meaningless phrases – “tackling climate change, promoting clean energy and achieving sustainable development” – that lack vision, coherence, courage and ambition. Failing to lead themselves, they mournfully suggest that climate change “will require leadership from the developed world”. If not their leadership, then whose leadership?

Their second blind spot has to do with the global economy. Many commentators are warning of dangerous imbalances and of instability in the global economy. They point to threats posed by the US’s historically unprecedented build-up of foreign liabilities; and by the growth of huge, unproductive reserves in the central banks of those countries financing the US deficit – Japan, China and India. They warn of the risks posed by flows of capital from where its scarce i.e. countries with large numbers of poor – to where its plentiful, i.e. the US and the UK. Neo-liberal economists have always argued that such flows are as unlikely as water flowing up a hill; how wrong they are.

Others warn of the dangers of a rising oil price, of growing demand for oil, and of the threat of a shortage. They point to the dangers posed by the huge build-up of personal, household, corporate and government debt in the Anglo-American economies.

Above all, they note that unemployment in some parts of the rich world are as high, if not higher than in the period leading up to the Great Depression. In many poor countries, unemployment is much higher than during the 1930s. None of these threats and crises appear to have kept the group of eight presidents and prime ministers awake at night. Their statement on the global economy oozes complacency and self-confidence. They discussed, they tell us briefly, the “outlook for global economic growth…and expect (it) to remain robust”. They express the vain hope that oil price volatility could be reduced through “more comprehensive, transparent and timely data”.

Despite the deflationary threats posed by unregulated, wildly gyrating “open markets” for capital, goods and labour they “reaffirmed their commitment to open markets more widely…” and to reducing “trade distorting domestic subsidies ….by a credible end date”. In a generous gesture to “least developed countries” they expressed their commitment to these countries having “the flexibility to decide their own economic strategies”. Not the right to decide their own economic strategies, just the flexibility.

That’s all. No recognition of the need to co-operate to reduce financial and trade imbalances, to manage exchange rate volatility and to restore financial stability. Instead some of this group of eight have, in weeks leading up to the Summit, consciously, and to my mind, irresponsibly, undermined existing multilateral frameworks. These could help the world manage climate change, political tensions and economic instability. The price for this irresponsible weakening of co-operative multilateral institutions will likely be high. We already face a dangerous rise in political tensions now almost at a boil in the Middle East; with tempers flaring ominously between China and Japan, and between European allies.

But it is in relation to Africa that these eight men have most clearly illuminated the feebleness of their ambition, and the weakness of their leadership. The talk was of increasing aid to Africa by $50 billion in 2006 to tackle the plague that is AIDS, to replace the past stripping of Africa’s assets, and to address the impoverishment of that continent.

Instead, after a long statement hectoring African leaders on “good governance” and “promoting growth” the eight leaders committed no new money to Africa in 2006. Instead they simply reiterated past commitments to increase aid to Africa by $25 billion in five years time. As UK NGOs have noted, only £10 billion of this commitment will be new money in 2010 far less than the additional $50 billion in 2006 that the social movement “Make Poverty History” had campaigned for.

The Gleneagles Summit of 2005 exposed the dangerous vacuum in world leadership. It will probably be remembered byfuture generations as a gathering of eight ineffectual men, who, at great expense to their taxpayers, insulated themselves in Scotland’s remote hills from the realities of economic, climatic and political instability. (END/COPYRIGHT IPS)