Business, Finance & Economics

Summits, who needs them?


LONDON — Leaders of the G8 nations begin their annual three-day summit Tuesday in earthquake shattered L'Aquila Italy. Are you excited by that fact? Thought not.

Neither, would it seem, is the host of the event, the government of Italy. Disinterested chaos has characterized the preparations for the get together and the agenda is decidedly thin.

Since it was set up in 1975 as the G6, the leaders of the largest industrialized nations have used their annual summit primarily as an opportunity to make pledges, have their pictures taken and generally act as if they are on top of the problems facing the world.

Some years there are more crises to deal with than others and this would seem to be one of those years. The global economic crisis and the post-election situation in Iran being two things that the leaders might be expected to address. But so far the big item on the agenda is "food security," an initiative aimed at keeping small farmers in the developing world in business. Or something like that.

Usually, by the time the summit starts, the host country has spun the media, pushing its hopes for high achievements. The other countries involved have worked their own reporters letting them know just how important the president or prime minister has been to pushing the process along. That hasn't happened this time. My phone certainly hasn't rung, my e-mail box has been ominously unstuffed.

Partially that is because hosting the summit has revealed clearly all the shortcomings of Italian Prime Minister Silvio Berlusconi's government. Berlusconi believes in personal rule with a capital P and he has been otherwise engaged for much of the last six months. His marriage has disintegrated in public over revelations that the 72-year-old politician attended a birthday party for an 18-year-old model. Photos of women cavorting nude at his Sardinian palazzo added fuel to his vanity's bonfire.

The only decision Berlusconi seems to have taken clearly about the summit was moving it from an island off the coast of Sardinia to L'Aquila, as an act of solidarity with the victims of the earthquake many of whom are still living in makeshift housing. But after that decision nothing has been discussed or decided.

Yesterday, the Guardian newspaper in London, reported that the United States had effectively taken over planning for the meeting. The State Department took charge of the round robin of discussions among diplomats that leads to an agreed final communique for the summit. Last night Berlusconi responded, saying the British journal had made "a colossal blunder."

This could be easily dismissed as the Italian government living down to the worst stereotype about the country but there is something deeper at work here. The question is whether these "summits" have outlived whatever usefulness they might ever have had. About the only people who seem to take them seriously are the permanent army of protesters who turn up religiously at each and every one, demanding that the leaders do something about the environment, global poverty and Palestine ... as if the leaders actually have the power to make those things happen.

When they were first organized in the mid-1970s, in response to the oil crisis of 1973, the meetings may have offered an opportunity for the leaders to plan economic policy as well as discuss their mutual security concern: the Soviet Union. But now it is hard to see what they do except blow tens of millions of dollars (or euros or yen or pounds) on a gigantic photo-op.

Here's an example: In 2005, Britain used its presidency of the group to focus on global poverty at the Gleneagles Summit. It was a big theme dear to the heart of both then-Prime Minister Tony Blair and his Chancellor of the Exchequer Gordon Brown. The Live Aid concert, broadcast globally by the BBC, was all part of a big push to get the richest nations to commit hard cash to the poorest. Do you remember the glow of that day? The amounts pledged at the Gleneagles summit were historic, we were told by Live Aid organizer Bob Geldof.

Four years later, Brown, now prime minister, wants the summit to at least publish results of which countries have lived up to their pledges. That is unlikely to happen, not least because Italy has slashed its aid budget under Berlusconi. But while Italy is the worst offender, other G8 countries after the big headlines and photos returned to business as usual. The British taxpayers, who footed a bill in the tens of millions for staging the summit might be forgiven for asking what was the point of all the hoopla and expense?

There is another reason to wonder about the usefulness of the G8. That is the G20. This larger group which includes Brazil and China reflects more accurately the distribution of industrial wealth in the contemporary world. It has taken the lead in trying to develop a coordinated governmental response to the global financial meltdown. But its meetings, too, are proving to be a shallow mix of posturing for domestic political consumption.

In April, the G20 met in London and agreed to tough measures to regulate the banking system, cap executive compensation and bring hedge funds to heel. Big cheers from people whose life savings and pensions have gone up in smoke. However, calls to Downing Street, the British Treasury, the White House and the U.S. Treasury indicate that virtually nothing has been done to meet those urgent commitments. President Barack Obama's June 17 announcement of a financial reform package fell well short of those goals and was derided by the right and left. Gordon Brown, fighting for his political life, has done nothing at all on the compensation question except to say that by 2011 the top rate of tax for people earning over £250,000 — about $403,000 — will go up to 50 percent. Of course, by 2011, he will no longer be prime minister.

Many of those who attended the G20 are in the same boat: unpopular and facing elections likely to drive them out of office long before they can turn pledges into legislated reality.

The question that hovers over all these "summits" whether G8, G20 or G-everybody is can these ad hoc groups, led by politicians, who make promises they will not be in office to fulfill, possibly serve any use at all?

We live in a world where it seems all the major decisions on how human beings live are made not by our elected leaders but by a narrow group of elites working for private multi-national companies; or speculators — hedge funds and others — playing the markets for their own and their wealthy shareholders massive enrichment; or one or two autocratic regimes like China and Russia. Most leaders of democratic countries are operating from a position of weakness. That, of course, is not the case for Obama. It is hard to imagine him, after the L'Aquila summit is over, not wanting to streamline the whole summit program. His time is precious, his domestic legislative program more important.

Perhaps it is time to add one more demand to the protesters' list: stop G8 summits.

Stop them now.

Although, given the success the protesters have had getting serious action on their other demands, it may not be such a good idea to go the protest route to end these anachronisms.

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In Business, Finance & EconomicsPolitics.

Tagged: EuropeItaly.