Problems with current U.S. policy.

Key Problems

* The G8 has failed to advance solutions to the array of economic, political/security, and transnational issues.

* The G8 has shown little leadership in addressing the deepening crisis of global governance.

* U.S. global hegemony undermines the G8 and other formal and informal expressions of multilaterlism.

By virtue of its combined economic, military, and diplomatic power and influence, the G8/G7 can exercise tremendous influence over the multilateral institutions of global governance. This power gives the G8/G7 great influence on the policies, programs, and decisions of the UN Security Council, World Trade Organization (WTO), International Monetary Fund (IMF), World Bank, and Organization for Economic Cooperation and Development (OECD). This is the case despite the fact that, unlike these institutions, the G8/G7 has no permanent staff, no headquarters, no set of rules governing its operations, and no formal or legal powers. For those negatively impacted by the policy agendas advanced by the G8/G7, and for countries excluded from its deliberations, the G8/G7's influential role in global governance is highly resented and frequently criticized.

In the past quarter of a century, other groupings of nations have come and gone, but the G8/G7 has endured. From its origins as an informal meeting of the heads of state of the wealthiest nations, the G8/G7 leaders' summit has become an international forum full of pomp and ceremony. The declarations of its leaders and ministers reflect the consensus of the world's most powerful nations about an expanding array of international issues.

By its own standards, the G8/G7 can point to a history of achievements. The consultations of the early years succeeded in stabilizing the international monetary system after it abruptly shifted from the limited gold standard. President Reagan credited the peaceful conclusion of the cold war in favor of capitalism to the "hanging together" of the G7 powers. The G7 played a key role in the conclusion of the Uruguay Round and the creation of the WTO with the dispute-settlement function as its centerpiece. As it enters a new century, the G8/G7 can rightfully claim to have played a key role in maintaining mutual trust among the industrialized nations and in expanding the realm of free-market democracies.

But the failure of the G8/G7 to advance solutions to the array of economic, political/security, and transnational issues it now addresses is just as evident. On the economic front, despite increasing attention to poverty, development, and health issues, the G8 has failed to address head-on the failures of the neoliberal and corporate-driven model of globalization that industrial world under U.S. leadership has embraced. Although acknowledging the urgent need to "ensure increasing, widely shared prosperity" and to "put a human face" on globalization, it has not moved beyond this now-tired rhetoric. As the main sources of development aid, the G8 countries have rightly addressed questions of debt relief, global public health programs, and aid for universal education. But they have failed to deliver on promises, while compounding these problems by insisting that its aid be tied to debilitating structural adjustment programs. The new attention to Africa's development problems is welcome, although it's likely that any increased aid from G8 nations will be accompanied by this same type of conditionality.

The G8 is promoting a package of policies to address terrorism, including new multilateral measures to stop terrorism-related money laundering. To its credit, this initiative has not adopted the "war on terrorism" rhetoric of Washington but addressed terrorism as an international crime. There is rising concern about the Bush administration's use of its war on terrorism as a dispensation for its new military interventionism and high-handed diplomatic posture. But there are few signs that disgruntled European partners are willing to publicly challenge the U.S. on these matters, preferring instead to issue consensus statements that paper over these challenges to multilateral global governance.

Having evolved from its initial focus on economic policy coordination of member states, to assuming an agenda-setting role for global governance, the G8/G7 is faced with mounting criticism that it is unrepresentative. How can such an elite club fairly shape an agenda that will affect all peoples and nations? In 1999 the G8/G7, responding to a U.S. initiative, formed an associated forum called the G20 to involve a broader spectrum of nations of mostly emerging markets in deliberations about financial policy reform. Thus far, however, the G20 functions mostly as a sounding board for G7 policy initiatives, doing little to alter the G8/G7's elite character.

Clearly, the wealthiest and most powerful nations have a right to meet formally or informally, just as other groupings of countries with similar interests and concerns do--such as the G77 forum of developing nations. The fundamental legitimacy problem associated with the G8/G7 is not its right to exist. Rather it's the way that the G8/G7 has maneuvered to promote itself as the central player in global governance--and in the process undermined the influence of the United Nations.

In the aftermath of World War II, the U.S. and other G8/G7 members created a visionary system of global governance designed to preserve peace and promote prosperity through intergovernmental institutions, mainly the United Nations. Today, these institutions are plagued with identity and representational crises and find themselves ineffective in the face of new global challenges, such as responding to the outbreak of intrastate conflicts, stopping financial crisis contagion, and regulating transnational corporations. Structural reform is necessary if the WTO, World Bank, IMF, and UN are to meet some of these challenges, while other global problems will require new, visionary agendas of global governance--and new institutions. Unfortunately, the G8/G7 has shown little leadership in addressing the deepening crisis of global governance. Indeed it has contributed to this crisis by supporting policy solutions that bypass the UN and that favor transnational corporations over public welfare. A yet more fundamental challenge to global governance in the post-9.11 era is failure of Japan, Russia, and European nations to mount a challenge to the increasingly assertive U.S. expressions of hegemony and supremacy in military, economic, cultural, and diplomatic affairs.

Tom Barry <[e-mail]>, a senior analyst at the Interhemispheric Resource Center, is codirector of Foreign Policy In Focus.