Texte français

June 1997


  1. The Denver Summit was essentially a political rather than economic summit, dominated by the first formal involvement of President Yeltsin in almost all of the discussions by the Heads of State and Government. Two final statements were produced:- a ninety paragraph communique from the "Summit of the Eight"; and a separate summit economic statement from the seven major industrial democracies (excluding Russia) on "Confronting Global Economic and Financial Challenges".
  2. On the central points of discussion the Summit :
  3. reached agreement on integrating Russia into the multilateral system through participation in "sherpa meetings"of the "G8", immediate membership of the "Paris Club" of creditor nations, early accession to the WTO, and progress towards OECD membership (§2);
    lacked focus in the discussion on employment (§3-5) - the G7 economic statement (§5) complacently states that growth is "solid" or "increasing" and says that more needs to be done "to increase labor and product market efficiency". The media gave great attention to the false debate between the "triumphal" proponents of North American "labour market flexibility" and the more critical continental European voices. Two more G7 Employment Conferences are to be held before the 1998 Birmingham Summit;
    on the environment (§12-30), failed to reach agreement on specific targets for reducing greenhouse gas emissions, which would have increased significantly the chances of progress at the Kyoto Conference on the Climate Change Convention to be held in December;
    commented extensively on Sub-Saharan Africa (§54-66), with (non-quantified) commitments for trade access for products from the poorest countries and continued aid. The G7 economic statement called for more debt relief for " the poorest reforming countries" (§24).
    on global and political issues, said that global integration has resulted in "complex problems that defy unilateral solutions" (§11) and went on to mention these exhaustively in the Communique's ninety paragraphs. As a result the outcome of the summit lacked a clear focus or political message.

Growth and Employment

  1. The trade union delegation meeting with President Clinton the week before the Summit had urged the Summit leaders to focus the meeting on the need to attack the "social deficits" of unemployment, wage inequality and economic insecurity in the G7 countries. They pointed out that the political changes in several G7 countries provided a unique opening to begin to put in place a "social dimension" to the globalisation process. The G8 Communique does have a section on economic and social issues which states that governments "-- must ensure that all segments of society, and indeed all countries across the globe, have the opportunity to share in the prosperity made possible by global integration and technological innovations" (§4) and that they "-- must take advantage of the possibilities for growth to address unemployment and economic insecurity." However the G7 economic statement, drawn up by the G7 Finance Ministers and discussed only briefly by the G7 Heads of Government, restates the existing consensus of finance ministries, central bankers and financial markets of "sound" macro-economic policies and structural reform. This does not amount to a global growth initiative. The economic policy guidelines (§7) restate Finance Ministers existing priorities: guarding against inflation and deficit reduction in the US, "structural reforms" in Europe, and encouraging domestic demand in Japan through deregulation.
  2. The leaders' discussion in Denver on employment took place over lunch and focused on education and training and a presentation from Italy on the role of small and medium size enterprises in job creation. However recent strong US economic performance and unjudicious boasting by US representatives on the eve of the Summit led to the media coverage focusing on the false debate which juxtaposes US and European labour market models as choices between efficiency and equity.
  3. Discussion on employment will be resumed a series of other G7/G8 meetings - a "high level" Conference on Employment in Kobe (Japan) in November, a further meeting of Finance and Social Ministers on "growth, employability and inclusion" in the UK in early 1998, and the Birmingham Summit in May 1998. These G7/G8 meetings will be preceded by separate OECD and European Union Ministerial meetings on Employment in October 1997. The British Chancellor of the Exchequer stated that the focus of the UK meetings would be to elaborate a "third way" avoiding the problems in Continental Europe of structural unemployment and in North America of "working poverty". This was the same term President Chirac used at the Lille G7 Jobs Conference in April 1996 to define his employment objectives.
  4. This "avalanche" of summit meetings must be used to redefine the much misused notion of "labour market flexibility" and build consensus on practical measures that can be taken. Too much of the past discussion has focused on deregulating labour markets, widening wage inequalities and reducing the security of workers with jobs, whilst doing little to assist the unemployed to find jobs. It is time to shift the debate and focus on developing institutions that promote high skill workplaces, worker involvement and lifelong learning. At the same time information could be exchanged on what works in terms of integrating the unemployed and excluded into active employment. The goal must be to achieve growth with equity with the help of adaptable labour markets. The presence of the social partners at these meetings could increase their practical relevance.

Financial Market Stability

  1. The G7 economic statement (§11-14) approves and reiterates the conclusions of a separate Finance Ministers' report to the Summit on "Promoting Financial Stability." The Report, requested by the 1996 Lyon Summit, calls for continued reforms in a range of areas covering global financial market activity:- greater international cooperation among financial market supervisors, including the appointment of a coordinator to oversee information exchange when problems occur; the implementation of measures to strengthen risk management and improve financial market transparency; the adoption by emerging market economies of a set of "core principles" covering banking supervision based on strong prudential standards, to be used as benchmarks for surveillance and advice by the IMF and World Bank; and further monitoring of developments in electronic money.
  2. These reforms are an indicator that governments are at last prepared to take steps, however small, to initiate a framework governing the activities of global financial markets. Particularly welcome are the backing for legal changes to improve co-ordination between financial regulators, and the possible appointment of co-ordinating supervisor to ease the exchange of information when "emergencies" occur; the requirement that banks hold sufficient capital against risks from trading activities; and continued work governing minimum capital standards, and derivatives trading. However, in reality, these reforms will merely treat the consequences of financial market instability and not the causes, and only go part way to meet the trade union demand for a new International Financial Order to restore the balance between the real and financial economies, as set out in the TUAC statement to the 1995 Halifax G7 Summit.

Trade, Investment and Labour rights

  1. Trade issues did not receive a high profile in the discussions at the Denver Summit, in a part due to the US domestic climate surrounding Congressional discussions on the granting of "Fast Track" negotiating authority to the Administration and on the renewal of MFN status for China. Trade issues are not treated in the G8 Communique and the G7 economic statement, in the main, recapitulates broad areas of work agreed at the WTO Ministerial Conference in Singapore last December (§30-34). The G7 "look forward" to the completion of the Multilateral Agreement on Investment negotiations in the OECD in 1998.
  2. The reference to labour standards in the trade section of the economic statement (§31) largely repeats the WTO Singapore declaration language - "While rejecting the use of labour standards for protectionist purposes, we renew our commitment to the observance of internationally recognised core labour standards". The G8 Communique however contains a positive section on democracy and human rights (§68-72) in general. The G8 say they have a responsibility to "further strengthen democratic values and fundamental freedoms"(§68), and that they will "focus on promoting good governance and the rule of law, strengthening civil society, expanding women's political participation, and boosting business and labour support for democracy, particularly in young democracies and societies in conflict"(§'70). They support the speedy adoption of an ILO Convention on the eradication of intolerable forms of child labour. They will work with the OECD's Development Assistance Committee and NGO's to achieve these goals. A report by Ministers is called for the next Summit. This could give an opening to engage in a broader discussion of the implementation of core labour standards in development strategies.
  3. The economic statement (§'35) raises concern at the effect of harmful tax competition between states and requested an OECD report on this to be presented to them at the next Summit.

The Environment

  1. A substantial part of the G8 Communique is given over to a broad range of environmental issues. Despite this the Summit failed to make significant progress and for the most part the G7 reaffirmed their intention to implement past commitments. On climate change a proposal by the European Union to go beyond the 1992 Rio Summit commitment and to reduce the three main greenhouse gasses by 15 per cent by 2010 was blocked by the United States. Instead the Summit agreed to "commit to meaningful, realistic and equitable targets that will result in reductions of greenhouse gas emissions by 2010" (§16). Moreover, governments would be allowed "flexibility" as to how these targets are met.
  2. As regards de-forestation, freshwater related issues, desertification, oceans, and children's' environmental health, the Summit failed to develop new policies and targets to tackle associated problems. Turning to the role of the international institutions, the United Nations and its specialist agencies was singled out as "the strategic forum for integrating the social, environmental and economic aspects of sustainable development." A German proposal that a World Environmental Organisation be set up alongside the World Trade Organisation was not agreed to.

Development, Africa and the International Financial Institutions

  1. The inclusion of a special section on Africa in the Political Statement is to be welcomed. The support for democracy and good governance is particularly important. While trade will be clearly essential for African growth, the importance of sustained flows of Official Development Assistance cannot be underestimated (§'59) as in the current circumstances Africa is not receiving private investment flows. The G7 countries should match words with a reversal of the current continuing decline of ODA to its lowest ever levels.
  2. Concerning the debt relief question in the Economic Statement, the concerns raised by trade unions prior to the G7 summit remain unanswered. In particular, the questions of the number of countries which could be eligible under the Heavily Indebted Poorest Countries Initiative (HIPC), the total amount of debt stock to be covered, and the "completion point" for beneficiary countries have not been satisfactorily resolved. Further progress must be made on this by the time of the Autumn IMF/World Bank meetings.

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