Careless Talk of Debt Protesters
Jul. 7–Peter Sutherland certainly knows a thing or two about international politics.
As well he might — since he is the chairman of investment bankers Goldman Sachs International, and was previously the first director general of the World Trade Organisation.
This has not stopped him from throwing political correctness to the wind on the eve of the anti-globalisation jamboree timed to coincide with the G8 summit in Gleneagles this week.
In doing so, he put the spotlight on just one of the many ways in which the crude populist rhetoric surrounding the summit is damaging, not supporting, the interests of the world’s poorest people.
Last week in Brussels Sutherland launched a withering public attack on the serried ranks of antiglobalisation protesters and their “high priests.”
He meant the likes of Sir Bob Geldof, whom he did not name, and economist and Nobel Prize winner Joseph Stiglitz, whom he did.
It is, Sutherland said, “a moment of high danger for the WTO.” Its inclusiveness represents an enormous, but fragile, advance in international co-operation.
Almost 150 countries — big and small, rich and poor — are members and all have equal rights.
But instead of defending the WTO, the anti-globalisation “idiots” are attacking it, therefore adopting an approach that is “destructive of the interests of poor countries.”
The Gleneagles summit should not be written off as hype and hypocrisy.
Most importantly, a dozen developing countries, including China, India and Brazil, are participating for the first time, although they are not yet officially members.
This is not a case of the big powers simply pandering to the political implications of globalisation.
China has been secretly involved in meetings of top finance ministry officials from America, Japan and a representative of the Euro area — an embryonic G4 in the making.
These meetings have excluded not only G7 members Germany, France and Italy — though as single-currency participants, they have been represented indirectly — but also Canada and, of course, the UK.
It has been a long time since representatives of the pound were not thought important enough to be included in such top-level global economic policy discussions.
But today, China matters. It has some $600bn of foreign-exchange reserves, mostly in dollars.
And, since Americans are not saving for themselves, Chinese investments in the US are helping to keep afloat a country living beyond its means.
Last month China went so far as to launch an $18bn bid for Unocal, a leading American oil company — at a time when the US Congress is threatening to put a protectionist 27.5pc tariff on all Chinese imports.
Such legislation could trigger a shattering economic confrontation between Washington and Beijing and even precipitate a global recession like the one in the 1930s.
The G8 politicians know that the Gleneagles summit is not about to “make poverty history” through granting so-called “debt relief” to the poorest countries.
It is much more complicated than that. As a top trade official remarked privately last week: “We all know that pouring aid into these countries is like pouring water into a leaky container. The faster you pour it in, the quicker it leaks out.”
To its great credit, the IMF has just published a report dampening down na’ve expectations.
But the G8 leaders are not, like Peter Sutherland, highlighting the dangers to the world trade system. They are not explaining just how difficult it really is to fight poverty.
Nor are they describing how globalisation has helped to make even the greatest of powers, America, dependent on China, one of the poorest.
Instead, led by Tony Blair, they are pandering to the simplistic nostrums of redundant rock stars.
Such a distorted public debate deflects attention from the serious problems facing the world economy and the real threats to the poorest countries.
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GS,