G-8: Failing Model of Global Governance

The G8 summit in 2001, which sparked massive street demonstrations in Genoa, raised new questions about the legitimacy and value of this annual gathering of world leaders. To avoid a clash with anti-globalization protesters, the isolated Canadian town of Kananaskis was chosen as the site for the 2002 summit. Although questions about the legitimacy of the G8 persist, the summit did offer a welcome opportunity for world leaders to discuss ways to improve international cooperation.

Africa's development, fighting terrorism, and the stagnating global economy were the preestablished priorities of the summit. The G8 leaders were also slated to review progress on priorities from previous meetings, including promoting universal primary education, fighting infectious diseases primarily HIV/AIDS, bridging the digital divide, and debt reduction.

While summit pronouncements were expected on all these topics, the expectations for the 2002 summit were uniformly low. Newly aggressive U.S. unilateralism has created new fractures in the cross-Atlantic and cross-Pacific alliances, thus undermining one of the original reasons for the summit-namely, to reduce U.S. hegemony and build collective global leadership. Since the mid-1990s, the annual summits have incorporated more social issues and developing country concerns into their agendas, but they have failed to demonstrate much progress on these issues. Similarly, the G8 has failed to produce the kind of global leadership necessary to jettison the failed neoliberal model for managing the global economy. For many NGOs and developing countries, the G8 summit remains a symbol of elite global governance, but concerns about the legitimacy of this self-constituted forum are increasingly overshadowed by criticisms of the forum's ineffectiveness.

The G8/G7's origins can be traced to the economic turmoil of the early 1970s, when the Bretton Woods monetary system collapsed and the world was hit by the first OPEC-induced oil crisis. This was also a time when U.S. post-World War II hegemony was being widely challenged by an emerging movement of nonaligned countries, proponents of a New International Economic Order, and third world insurgent forces, notably in Cuba and Vietnam. The type of control the U.S. exercised over the global economy and institutions of global governance was also being challenged by other industrialized nations, who were increasingly competing with the U.S. for international markets. At home, the U.S. was suffering stagflation, while its external affairs also looked grim, with no end in sight to the Vietnam war and with its first trade deficit since 1947.

In 1971, President Nixon delinked the dollar from the gold standard, thereby unilaterally destroying the prevailing monetary system. Under this system, member countries pegged their currency to a fixed quantity of gold -- but only a handful (in practice mostly the U.S.) actually committed to selling gold on demand to the central banks of other members at that price. By saying it would no longer sell its gold reserves for the surplus dollars held overseas, Washington sent a clear signal that the U.S. could no longer be counted on to ensure the stability of the world's capitalist economies.

In April 1973 the finance ministers of the U.S., West Germany, France, and the United Kingdom met in the White House library to discuss the tumultuous state of the international economic order. This "Library Group" quickly evolved into regular ministerial meetings and an annual summit of the leaders of the most powerful capitalist nations. Beginning in 1975 as the G6 (with the inclusion of Japan and Italy), this elite group of industrialized capitalist nations became the G7 in 1976 when the U.S. insisted that Canada be invited to the leaders' summit. Together, these industrialized nations assumed the responsibility for ensuring the stability of a new monetary system of floating exchange rates.