The G8 and the Elephant in the Living Room

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The G8 and the Elephant in the Living Room

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It seemed like the ’60s all over again! Rioting students demonstrating against global capitalism, rampant anti-Americanism, accusations of excessive use of police force, idealistic demands for reforms of the international economic system and beleaguered and bewildered politicians wondering what all the commotion was about.

In hindsight, residents of the medieval Italian city of Genoa, Italy, wish their city had never played host to the G8 Summit of world leaders over the weekend of July 20 to 22. It’s going to take some time and lots of money to clean up now that the party’s over. And there will be no further parties on this scale. A Canadian mountain resort has been chosen as the location for next year’s summit, which world leaders have agreed will be considerably scaled down.

It’s been almost 20 years since these annual meetings began. Progressively they have expanded, with each of the world leaders attending now taking along dozens of aides. This year’s summit cost almost half a billion dollars. Other leaders were invited, with many African heads of state in attendance anxious to discuss the continent’s serious economic and health problems with the leaders of the seven richest countries in the world. (The eighth nation in attendance is Russia, still potentially powerful militarily, but weak economically.)

As the leaders of the United States, Japan, Germany, the United Kingdom, France, Canada and Italy gathered together, this year’s choice of venue turned out to be a mistake, as the narrow cobbled streets of the ancient city made dealing with combative demonstrators more difficult for the police. It seemed throughout the weekend that the Italian police force was overwhelmed by an unexpectedly strong anti-G8 presence. Over 100,000 demonstrators faced 15,000 police. At the end of the summit, two demonstrators were dead and the future of G8 summits was left in doubt. Some felt there should never be another summit.

What were the demonstrators fighting for?

There were a number of different groups demonstrating. Many were concerned about specific issues like the environment, but most anger was directed against globalization. Feeling that multinational corporations increasingly control peoples’ lives and threaten individual freedom, they vented much of their anger on symbols of international capitalism.

With economic indicators all showing a serious negative downturn in the world economy, fears are increasing among people in the affluent West that the good times are over.

For most of the world they never began. This growing gap between the haves and have-nots is the elephant in the G8 living room, the proverbial issue that everybody present would rather ignore.

The dilemma of third world poverty

The gap between the wealthy western nations and the less developed countries of the world has been around for a long time. It’s no secret that most of the world has missed out on the materialistic progress of the last four decades. How to help the poorer countries overcome their poverty has long been a dilemma.

Following the oil price hike of the early ’70s, massive loans were made to Third World countries by western banks, intent on recycling the oil deposits left in their banks by oil-producing nations. Further loans have been made in the interim years, as banks naively assumed that countries don’t default like homeowners and credit card holders do at home. It wasn’t long before their bad judgment manifested itself in the fact that poor nations were unable to pay their debts.

G8 leaders have faced demands for some years to cancel the debt of the world’s poorest nations. In theory, this sounds good and has the support of many people. Although the Bible permits the charging of usury (interest) from “strangers” (resident aliens), there is a clear instruction not to take usury from a brother who is down and out (Leviticus 25:35-36 Leviticus 25:35-36 35 And if your brother be waxen poor, and fallen in decay with you; then you shall relieve him: yes, though he be a stranger, or a sojourner; that he may live with you. 36 Take you no usury of him, or increase: but fear your God; that your brother may live with you.
American King James Version×
). One primary factor that holds people and nations back from climbing out of poverty is debt, made worse by the interest that it daily accrues. But G8 leaders realize that canceling debt may not solve the problem of Third World poverty. However, it would be politically unacceptable to plainly state the reason why. The fact is that the world’s poorest nations share a major cultural problem. That problem is endemic corruption.

While national leaders signed the initial loan papers that plunged their nations into debt, most of the borrowed money ended up in private foreign bank accounts, rather than being spent on projects that would have alleviated poverty.

Most of these leaders are now gone, or long since overthrown, but their successors are often just as corrupt—sometimes even more so. Even the type of government doesn’t make much difference, as elected politicians can be just as corrupt as self-appointed ones. Indeed, one reason often cited for the military overthrow of civilian governments is corruption. In some countries, it seems as if everybody is corrupt, from the highest to the lowest official in the governmental hierarchy.

Canceling the debts of the poorest countries would send a clear signal to banks that it is now safe to lend again, with a reasonable assurance that western governments would bail out poor countries who default on their loans. It’s virtually guaranteed that such loans would again find their way into private bank accounts with the poor receiving little benefit.

Realizing this, but without naming those governments that are at fault, last year’s G8 Summit resolved to cancel the debts of the Highly Indebted Poor Countries (HIPEC), with adequate supervision to ensure that future loans would be used for their intended purpose. However, such “supervision” smacks of colonialism. No nation likes to be dictated to by other nations. But the fact remains that many governments do not care about their own people. Hundreds of millions of people in these countries live in extreme poverty. Millions every year flee their own nations for the West, a massive movement of people that is causing friction in some of the richer countries.

There seems little the G8 countries can do to ensure an increase in the standard of living of Third World peoples. All proposed projects must be approved by the national governments and require the cooperation of local officials on the ground.

G8 leaders (minus Russia) contributed to a $1 billion fund for African AIDS victims. Even here, it is questionable that many of those afflicted with the deadly disease will benefit from the fund. Much of the money will be used to set up another level of bureaucracy while donated medications are likely to disappear and find their way onto the black market where they will be sold at exorbitant prices.

One proposed solution to help the poorer nations is to remove all trade barriers to goods produced in the HIPEC countries. Again, this is a seemingly sound idea but it is fraught with potential problems. Not the least of which is that most exports from poor countries are agricultural products that are sorely needed by people at home, most of whom already do not get enough to eat.

Poverty at home

Anger at Genoa also came from those fearful of poverty at home in G8 countries (except Russia, which is already poor). Rising unemployment and a slowdown in the economies of the richest nations do not bode well for the immediate future.

A recent book published in the United States, Nickel and Dimed: On (Not) Getting by in America , by Barbara Ehrenreich, shows that for people to feed, clothe and house themselves, they need to earn at least $8.89 per hour. Yet, 30 percent of Americans earn less than this amount, a percentage that is on the increase. The last 20 years has seen a growing gap between rich and poor at home, as well as internationally between the rich and poor nations. Other western nations are experiencing similar trends, although not as great as that in the United States.

Reflecting on poverty brings to mind the words of Jesus Christ who said “you have the poor with you always” (Matthew 26:11 Matthew 26:11For you have the poor always with you; but me you have not always.
American King James Version×
). It is true that whatever economic system man has tried there has always been resultant great poverty. Capitalism was once defined as “man’s exploitation of his fellow man” whereas socialism was just the opposite (with the same end result!).

American isolationism

One disturbing aspect of the G8 Summit was the noticeable increased anti-Americanism. This was to be expected from the demonstrators, to whom America is still seen as the bastion of western capitalism, even though the seven richest countries present have all done well through the capitalist system and all are home to major international corporations.

But there is also increased anti-Americanism from some of the western leaders. U.S. opposition to the Kyoto Treaty on global warming has been an issue for some time. One day after the close of the G8 Summit, agreement was reached in Bonn on this issue. There, 178 countries agreed on measures to reduce global emissions of fossil fuels, with the United States being the only country to vote against the measure. This has fueled anger toward the United States around the world. It’s largely an emotional issue—the BBC reported July 23 that the agreed treaty will likely result in only a 2 percent drop in global emissions and then only if all of the 178 nations stick to the agreed rules, hardly likely in the present world.

Further anti-Americanism was fueled by the Bush administration’s commitment to missile defense, but this was lessened somewhat by a commitment to future talks between Washington and Moscow on defense issues.

Future summits?

It is generally thought that meetings of world leaders help defuse tension and encourage cooperation to the benefit of all. The G8 summits have been particularly beneficial in this regard, encouraging the seven richest nations in the world to move forward together.

However, this year’s riots have left a dark cloud over these summits. Further riots and deaths at next year’s meeting could jeopardize future ones.

Even without the additional controversy, the meetings are so brief that little is achieved. One result of the Genoa meeting was clear: There are increasing divisions between the United States and its European allies.

Above all, the elephant in the living room is still there. The vast majority of people around the world still live on less than one U.S. dollar a day, and an increasing number of people in the rich countries are living in poverty. No real solutions were proposed to these problems. Next year’s summit in Canada could find that nothing has improved where world poverty is concerned, making more riots more than likely. Could greater political turmoil lie ahead? WNP

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