More a nadir than a summit: The G7 leaders in Naples will once again fail to solve problems they don't want to confront, says Jonathan Eyal

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The Independent Online
YOU KNOW that summer has truly arrived when the annual summit of the Group of Seven nations comes around, with its traditional fare of photo calls and pompous communiques. This weekend the G7 circus moves to Naples, and even the hitherto unpredictable has become routine. Japan, Italy and Canada are fielding new prime ministers, plucked out from their seemingly inexhaustible supply of politicians; the US and Britain arrive with a desire to 'install fresh impetus' into the proceedings, France's President Mitterrand threatens to raise matters which all the others find irrelevant and Germany promises both 'firm leadership' and 'responsibility'.

The strength of the US dollar is, as usual before such events, in urgent need of 'concerted action' while Russia remains, just as predictably, a country on the verge of becoming 'a market economy', but still in need of large dollops of Western cash. If the props and the cast do change periodically, the plot seldom does.

While the G7 may no longer represent the world's biggest economies, its leaders do share common political values. They also represent almost 70 per cent of global GDP, the world's key trading currencies and overwhelming voting power in international institutions. It is nevertheless undeniable that the G7 represents yesterday's world. Far from restructuring, the Naples summit will only compound the club's difficulties.

The first G7 gathering in 1975 (actually a G5 - Italy and Canada were not then members) was deliberately modest and sought to answer an obvious need: the co-ordination of problems in an increasingly global economy. The G7 was not intended either to have a strict agenda or to supplant existing international institutions. As a result, it never had a permanent bureaucracy; a free and candid exchange of views was the aim.

But it was foolish to assume that an annual meeting of some of the world's most powerful people could be packaged as little more then a St Trinians' weekend outing. A US president who'd graduated from Hollywood and an array of leaders eager to push up their popularity ratings at home quickly transformed the summit into a vast annual photo opportunity. The logic of summitry set in: since all busy leaders have to know what is in store for them beforehand, an army of officials came into being in order to save their leaders from any surprises.

More than 90 per cent of the issues are settled before the meetings even begin and by the time the leaders arrive, all that remains is for them to enjoy the entertainment. What the communiques actually say hardly matters, most of the items are sure to be repeated next year. The G7 has discovered a new method of environmental protection: the recycling of cliches from one year to the next.

It is easy to suggest, as Douglas Hurd, the Foreign Secretary, did in Tokyo last year, that the G7 should return to its informal tradition. Bill Clinton could come in his mid-West outfit, Chancellor Kohl in his over-sized jumper and John Major could arrive in the corduroy trousers most Englishmen reserve for washing their cars on a Sunday. But this is hardly likely to answer the G7's more profound problem: the logic behind the summits has evaporated.

The G7 was established at a time when direct contact between world leaders was still relatively sparse. No longer: the European heads of government meet very frequently, and for President Clinton the G7 will be his third European foray this year. Lower down the ladder, ministers are locked into a huge network of conferences and frequently talk to each other on the telephone.

Furthermore, the G7 was based on the liberal belief that every problem has a solution; all that was required was for people to sit down around a table and discuss it calmly. Many of the problems today, especially ethnic violence and the north-south economic divide, do not have solutions: they need careful and patient management over a long period of time, not 'big bang' answers in a yearly communique. And most importantly, the economies which the G7 leaders claim to run are no longer under their control.

The record of the G7 in macro- economic management is abysmal, from the London and Bonn summits of 1977 and 1978, which fuelled the inflationary spiral of the early 1980s, to the persistent inability of the club to resolve world trade disputes. The EU's Exchange Rate Mechanism was shattered by the markets last August, but all the leaders in Naples will still be pretending that they can influence exchange rates. Indeed, the very same politicians who are pledged to leave currency policies to their central banks are getting together to discuss issues which legally have either never been or are no longer within their domain.

This year, the summit is concentrating on job creation. It will end by urging a string of banal policies. The point is not to identify the solutions, which must include a freer labour market and less regulation, but rather to explore whether there is a political consensus, particularly in Europe, for such policies. Hoping for economic growth without making any of the necessary political changes does not work. France, for instance, has experienced growth but managed to create more jobs in only three of the past 15 years.

The problem is systemic, and it is ridiculous to expect that Chancellor Kohl or President Mitterrand, who have ducked taking radical action for years and have even accused Britain of 'stealing' European jobs, will change their minds after one meeting in Naples. In short, the G7 summiteers are pretending to confront problems which they do not wish to understand; they will only end up chewing up old bones.

It is not possible to have a serious international discussion on unemployment without involving the Asian economies, now growing at twice the rate of the G7's. Yet when President Suharto of Indonesia last year demanded to address the Tokyo G7 meeting on behalf of the Non-Aligned Movement, he was politely rejected.

Western leaders like to claim that enlarging the G7 will serve no purpose: it will at best, they say, merely duplicate work already done by other institutions, or at worst replicate the divisions which already paralyse much of the United Nations' work. Anyway, the G7 is not supposed to be a world directorate. This is a superficially persuasive argument but one which is, unfortunately, undermined by Russia's presence in Naples this year.

For the past three years Moscow's leaders have been invited to the economic discussions of the G7 to present their reform programme. They have been listened to politely, given a good dinner and sent on their way with promises of tens of billions of dollars that seldom materialised. This weekend, however, President Yeltsin will be attending the political discussions, but not the economic ones. Especially for a country like Russa, the distinction between the political and the economic is purely arbitrary, but Yeltsin demanded to be invited because his participation will be taken as a sign of Russia's great power status. By agreeing to Yeltsin's demand, the G7 therefore conveys to the world precisely the message which its leaders always wanted to avoid: that they represent an exclusive club of the 'big boys' intent on telling others what they should do.

Russia's half-participation will render the G7 even more Euro- centric, further alienating the Asian states. Russia is a military power with a decaying economy; China is an economic power with a growing military. The West's problem with Russia is how to manage an empire's retreat; the challenge of China is how to accommodate an empire which may be on the march. If the G7 was interested in tackling tomorrow's problems, China should have been invited as well.

Unable to reform and determined to discuss issues over which it has diminishing influence, the G7 now resembles the yearly meetings at spa resorts that were so fashionable between European leaders before the First World War. Bad Ischl with Emperor Franz Josef ,or Naples with Clinton and Company: take your pick.

The author is Director of Studies at the Royal United Services Institute in London.

(Photograph omitted)

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