Guest Comment: Concert of great powers or democratic global governance?

By Thomas Fues and Sachin Joshi

More urgent than ever, the upcoming meeting of the most important industrialised countries in Heiligendamm is faced with the question on the future of the summit architecture. The phenomenal rise of the emerging powers, particularly China and India, has called into life a new geography of the global economy and international politics, which can no longer be dominated by the West. (The military hegemony of the US is a separate though connected issue.) Nobody has recognized this more clearly than the Bush Administration as meticulously analyzed by US political scientist Daniel Drezner in the current issue of Foreign Affairs. Mostly unnoticed by the international public, the US wants to integrate China and India into multilateral institutions (e.g. IMF, WTO) and install a new triad of great powers. It is the European countries which are disturbed since they deny their loss of influence in the „Asian century“ and cling to obsolete privileges.

What can Europe do to prevent a new concert of great powers and to support democratic global governance? In its attempt to prevent the ‘concert’ the worst answer would be if the EU itself were to strive for great power status by building up military capacities. This would tear the Union apart; a European torso could not master this task. The right approach, however, would be if the EU would become the leading force for an equitable world order and thus would increase its reputation and influence in the world. In other words, support democratic global governance. This would imply that European countries withdraw from antiquated positions of power in order to allow for the new powers to gain more leverage. For example, EU states should pool their voting rights and seats in the IMF and agree to a substantial reduction. Also, Europe should be represented with a single seat in a reformed summit architecture, as in the proposed „L20+“ of heads of state and government from North and South. If Europe is not ready for a voluntary relinquishment of power and sustainable change of course, it will be faced with a concert of great powers consisting of the US, China and India, which will undermine the foundations of the United Nations and block democratic global governance for a long time to come.

The EU leaders have the right opportunity to discuss their strategy to support democratic global governance at Heiligendamm. The question however remains, whether they will take the first step forward.

Dr. Thomas Fues is a senior economist at the German Development Institute (GDI) in Bonn; Sachin Joshi is a researcher in New Dehli and is currently attending GDI's Global Governance School.

Angela Merkel’s new strategy on raw materials

Raw materials security, according to the president of the German Federation of Industry (BDI), Jürgen Thumann, at their 2nd Raw Materials Congress in Berlin last month, is “not only secure supply of our economy with oil and gas, but also with metals such as copper, zinc, nickel, and tungsten ores”. Just in time and before the G8 summit, the federal government presented German industry with “a new raw materials strategy”, in the context of the high priority given to “energy security”. The German chancellor herself, Angela Merkel, outlined cornerstones of this strategy at the BDI Raw Materials Congress.

Indeed the new strategy includes compliance with minimum ecological standards and the Extractive Industries Transparency Initiative (EITI), which the chancellor will reinforce at the G8 summit. However, the core objective of the strategy, according to Ms Merkel, is “to support the raw materials initiatives of business abroad”. To do this the federal government will continue to increase the investment guarantees for raw materials investment abroad. Last year alone this guaranty volume abroad rose to €4.1bn—the German government is thus among the “top” worldwide. A second pillar of the strategy is greater support for research and development to promote raw materials productivity.

In order to initiate the new raw materials strategy, the federal government intends to create an inter-ministerial raw materials committee. All possible departments will be able to participate, including those of foreign and security policy. However it should not be hard to guess who will set the agenda. The chancellor told the BDI delegates, “You will now get the forum you asked for”. Meanwhile the critical observer may ask how strong national government backing will still be given to secure raw materials, despite all the talk about globalisation.

ITUC urges G8 to step up its efforts in the fight against AIDS

Only a few days ahead of the 12th World Day for Safety and Health at Work, commemorating workers who died or were injured at work as a result of unsatisfactory production methods or working conditions, the International Trade Union Confederation (ITUC) urges the G8 to step up its efforts to tackle the spread of the HIV/AIDS pandemic. Almost 40 million people across the world are currently living with HIV, 80% of whom are adults. More than half of those infected form part of the active population and are between 15 and 49. Many workers who are no longer physically fit enough to go to work depend on their young children who then have to meet the family's needs.

Despite being at the top of the global agenda - the fight against AIDS is one of the Millennium Goals - results remain poor. Trade unions already placed pressure on the G8 meeting last year. The 2006 summit made a commitment to taking practical measures to monitor AIDS and other infectious diseases, present reports and disseminate information. These commitments have not had the desired results.

Therefore, the ITUC reiterates its demand to the next G8 summit, to be held in early July in Germany, that the promised development aid and contributions to the Global Fund to fight this pandemic be released as soon as possible. "The G8 must keep the commitments it made last year and step up its efforts to stop this pandemic," said ITUC General Secretary Guy Ryder. "It has the capacity to do so and must therefore make this a priority action for 2007."

Welcome to the G8 Blog of World Economy & Development and Heinrich Böll Foundation

By Rainer Falk and Barbara Unmüßig

Preparations for the G8 summit in Heiligendamm, from 6-8 June 2007, are well underway—on both sides of the fence. The German government has been building it so that, as in the past years, the conference can be held far from the madding crowd. While there has been scarcity of substance in the debate “outside”, the “inside” also failed to set the course, so no groundbreaking development and environmental policy signals – or at least indications that past promises will be kept - should be expected from this summit.

This blog is intended to contribute to the substantive debate in the final sprint to the summit. We will present briefs and summaries of the preparatory meetings as well as commentary on current events, regularly and the closer the summit becomes—more frequently. We will report about the official meetings of G7 and G8 ministers as well as the numerous civil society events. We want to bring more light and transparency into the preparation for a summit meting which for more than 30 years has strived as an exclusive club of the influential to determine the course of world development. We want to provoke discussion about reform and alternatives.

We deliberately chose the blog medium since it is especially suited to links and networks and permits spontaneous interventions and commentaries. “Blogging G8” is written primarily by Rainer Falk. However, numerous guest commentaries are to be included. Add our blog (www.blogging-g8.blogspot.com) address to your favourites, use our RSS feed or simply check-out our pages regularly. We warmly invite everyone interested to actively participate in our blog.

Happy blogging!

Draft G8 Declaration for Heiligendamm leaked: an agenda against the South

A first internal draft of a declaration for the coming G8 summit has been leaked. The Washington-based NGO Oil Change International published the 21-page text on its website. The document entitled Growth and Responsibility in the Global Economy obviously comprises the economic policy part of the planned summit document. There is nothing on the implementation of promises made at the G8 summit at Gleneagles and the Africa policy announced as the second focus of the German G8 agenda. The individual chapters deal with the issues of global imbalance, international investment, innovation protection, climate change and energy efficiency as well as raw materials security and transparency.

Above all the chapters on “investment freedom, investment environment and social responsibility” and “promoting innovation—protecting innovation” show that the German government intends to use the summit to impose an anti-South agenda. Thus it wants to mobilise against the emerging economies for their alleged “new investment protectionism” and further strengthen patent law and intellectual property instruments against product piracy. However, both the political control of foreign investment (which can include unequal treatment) and the imitation of products and production processes were always first order development factors.

Oxfam Poll: Majority of Germans favour doubling of development assistance

71% of Germans consider it important that the federal government keep its promise to the developing countries and double its official development assistance (ODA) by 2015. That is the result of a representative opinion poll commissioned by Oxfam Deutschland. Oxfam sees this poll result above all as a signal to the German government. It should “submit a concrete plan for meeting its financial commitments in the coming years” as soon as possible, according to Reinhard Hermle, former spokesperson of the Association of German Development NGOs (VENRO) and currently development policy consultant to Oxfam Deutschland.

According to the poll, conducted by TNS Emnid Institute, 82% of those surveyed consider poverty in the developing countries an important or a very important issue. It also shows that there is substantial mobilisation potential among German citizens. Thus 72% would sign a petition calling on the federal government to do more against global poverty. 53% would support a charity and 30% would possibly participate in a demonstration for more and better development aid.

However, according to recent OECD figures the European Union and its member states will have to sharply increase their ODA if they want to keep their commitments. Although EU-ODA rose substantially in 2006, a quarter of this increase was due to adding one-time debt cancellation for Iraq and Nigeria. If the debt cancellations are factored out, four EU members gave less in 2006 than in 2005.