G8

'The pipeline that will change the world' is the heading of an article in today's 'Independent'.

It tells us that a 1000-mile oil pipeline has been completed that deliberately skirts Russia. The United States taxpayer is underwriting most of the $4bn it costs. Energy security can be a huge expense for national taxpayers - normally paid through military budgets.

"[The project's] architects and investors claimed the pipeline would shore up energy supplies in the US and Europe for 50 years, protecting our gas-guzzling way of life and easing our reliance on the House of Saud." http://news.independent.co.uk/world/asia/story.jsp?story=641172

Whether there could be an international foreign policy was a question here on May 4. However it looks as though this is a non-starter: one G8 country is prepared to spend $4bn to skirt another.

Today's 'Times' suggests that a good start would be for the UK to invite China to join the grouping. "China would be asked to accept the responsibilities that go with full membership of the global monetary system, above all full co-operation in the management of a global system of floating exchange rates."

Secondly, the proposed agenda of the G8 economic forum is questioned. The article recommends reasonably that the priorities for the agenda of the G8 economic forum should include matters vital to the working of the global economy:

1. "the threat to jobs in America and Europe posed by Asian competition";
2. "the protectionist backlash that this Asian competition has triggered in the US and Europe";
3. "the link between protectionism and the misalignment of currencies, especially in Asia. . . [In]Tuesday’s US Treasury report on currency management, . . . the Bush Administration effectively presented the Chinese Government with a six-month ultimatum to revalue its exchange rate or face a trade war". http://www.timesonline.co.uk/article/0,,1061-1617886,00.html

What happens when we can't get hold of oil?

For a start, our supplies of food will reduce:

"Oil based agriculture is primarily responsible for the world's population exploding from 1 billion at the middle of the 19th century to 6.3 billion at the turn of the 21st."
http://www.countercurrents.org/po-church0700405.htm - Why Our Food Is So Dependent On Oil (Norman Church)

How are priorities for discussion at the G8 chosen?

What powers do the G8 (or Political 8) really enjoy? Very few - the summit is a discussion forum that often issues guidance to the international community on economic priorities.

"The summit members comply modestly with the decisions and consensus generated by and codified at their annual meeting. Compliance is particularly high in regard to agreements on international trade and energy, and on the part of Britain, Canada, and Germany." http://www.g7.utoronto.ca/

Anyway, things have changed since 9/11. Security is much more of a concern. Therefore how should the G8 adjust?

A new book considers the changing political scene, and comes up with three scenarios for the next ten years:
1. Nations become fortresses. They withdraw from global agreements on economics; protect local jobs and introduce barriers to foreign investment. Internationally, they form alliances with like-minded nations; or
2. International business (based on human nature) takes the lead. There is greater division in societies, and large sections of the world are mired in poverty and violence; or
3. The world is ruled by the main political and economic players - the US and China. http://www.theglobalist.com/storyid.aspx?StoryId=4429

These scenarios do not mention the United Nations. There may be little need for the G8 also.

Why is there little sign of a common foreign policy for the European Union? Indeed why haven't other parts of the world even attempted such an ambitious project? The answer seems to be that governments, worldwide, are constitutionally bound to act in their nation's economic interests - accordingly governments are allowed many interpretations of what's best including, for example, fiscal indiscipline and how little assistance to give internationally.

The UN Charter was a bold attempt at a global constitution, to prevent a repeat of the indiscipline that led to WW2 - however the Charter proved unenforceable. As a result key economic actors split from the UN into the G8, thinking they would be better able to address the problems of the global economy. But the G8 is floundering too - it is accused of being insufficiently representative and lacks enforcement powers. The absence of international enforcement is a common theme.

The EU should surely have a single view on key issues at the G8 Summit.

EU plans for a common foreign policy? Fifteen years ago the EU's Maastricht treaty called for a common foreign and security policy. Now France says a CFSP will probably take one or two generations to agree (see yesterday's blog).

"Member states do not always have clearly defined and shared geopolitical interests. Great Britain, France, Germany, Italy, Spain, Poland, Belgium, and the Netherlands still have their agendas and their relative position to the United States, as the 2003 Iraq intervention undoubtedly displayed." "Great and Medium Powers in the Age of Unipolarity", 11 May 2005
http://www.pinr.com/

EU hopes for a common energy policy? Based on past experience, member states are increasingly going their own way:

"On April 11, . . . Chancellor Gerhard Schroeder and Russian President Vladimir Putin agreed on eight different deals regarding cooperation in nano- and bio-technologies, education, and oil and gas transportation from Russia to Germany (via the planned Baltic pipeline). Russia was already Germany's most important non-E.U. commercial partner, but after these agreements, a new level of cooperation between the two countries is on its way to being accomplished."

The UK will have difficulty representing the EU at the G8 summit. See May 4 blog: A policy merger between countries might not find favour with all the governments in the EU.

Indeed, it looks as though the EU will be divided for many years to come. An interview with the French ambassador to the United States was broadcast on May 6. http://www.chicagopublicradio.org/audio_library/wv_ramay05.asp

Jean-David Levitte told listeners that it would take probably one or two generations before the EU could have a common foreign policy. This is bad news for both the UK and the EU. The new constitution proposes that the EU should have a foreign minister to represent it - perhaps France have other plans?

Should global capitalism be better directed? The G8 might want to avoid this question.

If stability in the nation (or a group of nations) is the overriding priority, to what extent should personal greed be controlled? More importantly, though, can it be controlled - remember the experience of the US with prohibition.

Anyway, the question of disciplining 'capitalism' is provocatively raised by the nobel laureate Gunter Grass and the many other people who are reacting to his views. Grass suggests that stability in Germany (as an example of a developed country) is now being seriously harmed by capitalism; the newspaper article is copied at the start of the first link. Debates are at http://delong.typepad.com/sdj/2005/05/guenter_grass_m.html, and at http://crookedtimber.org/2005/05/09/moral-critiques-of-capitalism/#comments

Unfortunately the responses have been largely pro and con Grass, not about the primacy of stability. But it's a brave start.

See blog on April 2, 'What should be the worldview on energy?'

The International Energy Agency are very worried about depleting fuel reserves globally. They are expected to report this month that there is a need for "dramatic measures, such as reducing motorway speed limits by 25 per cent, shortening the working week, imposing driving bans on certain days, providing free public transport and promoting car pooling schemes."

Increasing the supply of nuclear power is one way the United States is planning to cut its imports of energy. However, more nuclear doesn't necessarily mean a lot less oil.

>President Bush has proposed reducing oil imports by increasing the use of nuclear power, which he said in a recent speech was "one of the most promising sources of energy." . . . Oil accounts for 41 percent of energy consumption.<

>There is a problem, though: reactors make electricity, not oil. And oil does not make much electricity.< http://www.nytimes.com/2005/05/09/politics/09energy.html?pagewanted=1

Oil was used to produce less than 3 percent of US electricity in 2004 - most of the remainder was for transport. Therefore, as the IEA suggest, a key problem for the G8 is how to fuel the transport of the future.

Foreign policy is a big issue for all nations, nowadays. Should they continue with national policies or move towards an international policy?

The nations in the European Union are undecided.

A few members are going the international route. The different approaches in the EU were, of course, evident in the recent intervention in Iraq. It was essentially a US initiative; the US administration told Iraq on many occasions that they would unilaterally call off the coalition invasion of Iraq if it disarmed.

But leaving aside the complex case of Iraq, taxpayers could cut their bills substantially if their governments adopted common foreign and defence policies with the aim of effectiveness. The future? Europe clearly believes the international transportation of goods is high risk; and it is therefore investing heavily in navies, especially submarines. Could protection of sea lanes be the basis for a new military alliance between the US and Europe?

A policy merger between countries might not find favour with all the governments in the EU. In July the UK assumes the presidency of the EU and has a duty to represent the EU at the G8 Summit of the same month; perhaps this should be item one on the agenda of the G8.