Opposing the G7
Representatives of the governments of the world's seven richest governments met in Lille in April 1996 to find solutions to unemployment. As Gustave Massiah reports, they decided that the best strategy to follow is the globalisation of the economy, the deregulation of work, and the replacement of "archaic" job security. In other words, more of the same policies that have created mass unemployment in the "advanced industrial democracies"
ECONOMIC POWER IS LESS SUBORDINATE TO government than it ever was. But this doesn't make the G7 irrelevant or redundant. Over the last 20 years, these "industrial democracies" ", as they now call themselves, have become an increasingly visible actor. They also represent the major stake-holders, and provide the top bureaucrats in the World Bank, International Monetary Fund, and World Trade Organisation (formerly GATT).
The G7 is a club, which exists above all to impose the will of those in the club on those outside it. The institutional framework of the world economy has been progressively adapted as the result of discussions within the G7. This club pilots, and guarantees the regulation of the globalisation of the world economy.
The first summit of "the major, free, democratic industrial countries" took place in 1975, at the initiative of the French president Valery Giscard d'Estaing. The goal was to ensure "stable and durable growth", through a struggle against inflation, and through action to reduce unemployment.
From summit to summit, the club's doctrine developed, around key elements like neo-liberalism, crisis management for the new world disorder, managing the debt crisis, liberalising trade, and expanding the world market.
Structural adjustment was the first element of this strategy. In 1976, the G7 approved the World Bank's plan for reorganising Third World economies through; opening to the world market, and prioritising exports rather than the internal market; privatisation and opening to international investment; and the reduction of "unproductive" budget posts like education and health. Structural adjustment does allow for corrective social programmes, producing the impact is minimal. And increasing military and police spending is permitted.
Over the years, Structural Adjustment has been applied everywhere, East, West and South. The result is increasing inequality, marginalisation, and poverty. Including in the G7 countries themselves.
In 1980, the G7 began to express its interest in the world's raw materials. The result of the G7 reorganisation of the recycling of petrodollars was an expansion of the speculative financial sphere. This weakened the world economy, and allowed corruption and drugs trafficking to become structural parts of the world economy. Downward pressure on the price of raw materials became a constant factor. This was, of course, one of the motivations behind the The debt crisis
In 1982, the Third World debt crisis combined with a surge in interest rates. Monetarist policies caused a massive international debt crisis, which was to dominate summit discussions for the next
Principles for debt treatment were established. Country by country negotiations: never group negotiation; refusal of any notion of joint responsibility; refusal of any discussion on the illegitimacy of a part of the debt; subordination of all negotiations to the imperatives of structural adjustment to the world market, and imposition of debt rescheduling (repayment of the same sum, plus interest, over a longer period) as the only technique for reducing the size of
Three innovations in debt treatment did emerge in 1992. Russia's debt problem was selected for priority treatment, for openly political reasons; Poland and Egypt were rewarded for their militant engagement in the free market crusade, and their role in the Gulf war.
The G7 even made a hypocritical appeal to the Paris Club (the northern state creditors of the third world: i.e. themselves) encouraging efforts to find solutions to Third World debt.
The international monetary system has stabilised over the last ten years. Some of the larger countries now make regular payments, and borrow new sums. The others are even more marginalised than before. As for the creditors, they have made provision for bad debts (at the cost of a few bankruptcies). The international banking system is no longer in danger. Debt isn't scary any more.
Not that the problem has gone away completely. Debt management has had a significant deflationary effect. Financial flows still go from the producers in the south to the bank deposits in the North. A weakening exchange rate for the south, and the decline in their export earnings combine with the debt system to cancel out almost all development financing.
The media talk less about the debt crisis than they used to. And yet, the current situation is increasingly similar to the debt crisis of the 1890s, which led to the expansion of direct colonialism, and the crisis of the 1920s, which was a key factor leading to the second World War. Regulating globalisation
A series of G7-sponsored discussions have re-shaped the world economy, in agreement with the general interests of big business. The main purpose of the United Nations conferences in Rio (environment), Istanbul (habitat), Copenhagen (social), Vienna (human rights), Cairo (population) and Beijing (women), was to establish an agreement in principle on the priorities proposed by the G7 countries for the integration of the southern countries in the world order.
G7 economic priorities (expanding the world market, liberalisation of financial flows and exchange rates, mastering monetary disorder, containing inflation) have weakened the social gains of working people (stable employment, housing, social security) and increased marginalisation and precarious contracts. The G7 club does not just have an economic and social vision. It's EMU LAUNCH BATE 299g ESTRICTED International Viewpoint 31
* Europe: supranational state?