Summit results II: Heiligendamm process – Small step but no substitute for global governance reform

The Heiligendamm process, for which the German government received the approval of it G8 partners — is a small step, but certainly no substitute for a democratic reform of the global governance system. Furthermore according to the world economic declaration, the G8 are to maintain a „new partnership“, a „new form of detailed cooperation“ and above all a “new form of topic-driven dialogue” in the next two years with the so-called Outreach 5 countries (O5), China, India, Brazil, South Africa and Mexico. The German government proposed the OECD as platform – limited to the next two years. The OECD was originally greeted with scepticism, then finally accepted, once it was assured that it only pertained to “technical facilities”.

The topics of this Heiligendamm process are exclusively those that interest the North, resp. the G8: innovation and patent protection, freedom of investment, common responsibility for Africa (this conceals the intention of dragging the O5 into the OECD as donors) and finally the issue of who will contribute how much to reduction of CO2 emissions. Just before Heiligendamm, the O5 countries issued various signals that they wanted to improve co-ordination among each other in terms of stronger South-South co-ordination. However, it is currently unclear what the specific interest of the O5 in the new co-operation with the G8 is. Nonetheless it is remarkable that the joint declaration by the G8 Presidency and O5 is far more moderated in tone than the G8 original.

For the German government, the O5 approach was the “compromise” between the status quo and the earnest attempt to expand the G8 or even to replace it with a truly representative body. However, not only the „G8 partners“ — even the chancellor herself — wanted to maintain the anachronistic G8 construction. The arguments given miss the point (either that it is just a “small intimate circle” or that the G8 represents a “community of values" worth preserving). This is just a crutch that has been employed; a placebo that is miles from the global governance reform that belongs on the agenda.

G8 results I: The Summit Declaration ‘Growth and Responsibility in the World Economy’

Behind the screens of chatter about a “climate policy breakthrough” the German government published the summit declaration Growth and Responsibility in the World Economy. This corresponds largely to the prognoses published in this weblog and at wdev.eu since the first draft trickled through (>>> German G8 Politics on the Eve of Heiligendamm). Along with the chapter about energy security and climate protection, the declaration holds firmly to the hard economic interests of the G8 pursued against the rest of the world — growth and stability, investment freedom and conditions, promotion and protection of innovation and intellectual property.

Although the German government originally announced the actual focus of the summit to be new elements in world economic growth, even with a magnifying glass one won’t find anything new in this declaration. The G8 celebrate global economic growth and praise themselves for their respective economic policies. Whereas the G8 promise “to keep going”, the emerging countries are encouraged by every means to exert more exchange rate flexibility, reduce their foreign reserves or reduce imbalances. In the matter of financial market stability and in particular with regard to transparency and control of hedge funds, the German government was unable to impose more than had already been announced in the finance minister’s communiqué.

However, the declaration devoted even more attention to the G8 interest in “investment freedom” and increased promotion and protection of innovation and patents. The former also pertains to the “social dimension of globalisation”. Here, for the first time in a G8 document, some things are emphasised — from the OECD guidelines for multinational corporations to the Decent Work Agenda of the International Labour Organization (ILO) — but only just emphasised. There are no new practical initiatives for implementation. For the second point, the innovation issue, the G8 have adjourned to a new dialogue with the major emerging countries, also because meanwhile it has become clear that the latter are no longer prepared to accept the Northern agenda whereby more patent protection is supposed to mean more development. Here the G8 will need patience and commitment, like in other areas, even if after the document the “Heiligendamm Process” is only scheduled for the next two years.