SchNews | In the run up to the annual meet and greet by world leaders (and ensuing mass insurrection on the other side of the police lines) at the G8 summit in Hokkaido, Japan, it’s time we took another look at the Group of Eight (the USA, UK, Germany, Italy, France, Canada, Japan and Russia).

The G8 has been top of activists’ hit lists since the ’90s when the leaders of the world lorded it over the planet, playing the world’s population like puppets on its strings through the WTO, the IMF and the World Bank, keeping the deck of international power and capital firmly stacked in favour of the rich.

The G8 is sometimes known as the G7 plus Russia – which has been the odd man out since it joined (due more to its ownership of thousands of nuclear weapons than its position on the global rich list). It is the one international forum that brings together the world’s trade and financial institutions. Simply put it’s the world’s biggest cartel.

Throughout the ‘90s, via innocuous sounding edicts such as the ‘Treaty Regarding Property Rights (TRIPS – keeping knowledge locked away amongst a handful of electronics and bio-tech firms) and ‘Structural Adjustment Policies’ (a euphemism for the looting of entire economies by modern day corporate privateers), the world was fully under the control of USA and its allies. The Soviet Union had been defeated by the power of Democracy Inc. and the US had no rivals anywhere. It was economic liberalism and US-style democracy all the way, with Slick Willy Clinton at the helm. It was the ‘End of History’, as triumphantly proclaimed by right wing thinkers.


But it all turned out to be a little premature. In the twilight months of the Bush administration, the G8 looks more like a global spectator than the sole player. Across the world countries that the West had gotten used to ordering around have begun to dance to their own tune. Even ‘reliable’ US allies like Saudi Arabia aren’t afraid to say ‘no’ to the US’s face (they recently they turned down a request to release more oil into the global markets despite Dubya’s personal intervention). Around the world the battle for drug patents has basically been won by the third world drugs producers (Brazil, Thailand, India) after the G8 realised that neither the western pharma companies or the WTO could stop them.

Latin America has now pretty much thrown out the IMF and their ilk, refusing to sup from the poisoned chalice of Structural Adjustment any more. During the ‘80s and ‘90s Argentina followed the dictates of the IMF & World Bank faithfully, only to be rewarded with the total collapse of their country’s economy – banks and factories closed overnight, and the Argentinian people responded with massive strikes and worker occupations of bankrupt factories (See SchNEWS 350). The elites of Argentina sensibly saw which way the wind was blowing and stepped aside to make way for the centre-left (and hardly revolutionary) government of Nestor Kirchner, who chucked out the IMF, WB, WTO and their advisors and refused to listen to the financial advisors who predicted doom and catastrophe. They were wrong, and since they stopped listening to the globalists both the Argentinean economy and average standard of living (not the same thing by the way) have gone up and up.

Since then two-thirds of Latin America has followed suit, and the hemisphere, once America’s back yard, has begun to make faltering steps towards integration – independent of the gringos – via organisations such as MERCOSUR and the (much more ambitious) Bolivaran Alernative for the Americans (ALBA).

But even this is just the tip of the iceberg. The economies of Asia, traditionally heavily dependent on the Americans, still remember the battering they took in the late 90s during the collapse of the ‘Asian bubble’. Since then they’ve made sure that there’s plenty of extra dosh in their state coffers, ensuring that no matter how bad things get they don’t have to go down the path of short term gain for long term pain of IMF loans.

The lack of customers has effectively ruined the IMF. From a budget of over $100 billion four years ago, they can now barely scrape together $10 billion, most of which now goes to just two countries: Turkey and Pakistan. The organisation which once played the role of global loanshark is now feeling itself the pinch. Once Turkey pays off the last of its outstanding loans, the IMF will basically run out of fresh sources of cash from the world’s poor.

The net result of the failure of these US created and led institutions is that the G8 has lost control of global policy, in what even people inside the establishment are calling ‘a guerilla assault on the Washington Consensus.’ There’s still plenty of countries that are suffering horrendously from the same privatise-and-be-damned ideology of neoliberalism, but the tide is noticeably turning. States from China to Bolivia are turning state coffers over to internal development and poverty reduction, and in the process creating markets outside of the control of the G8.

Stuggling against the tide the G8 is bringing in some of the larger non-western countries into the fold, intending to co-opt them into selling out the rest of the developing nations and making it worth their while to play ball according to US/European rules. The so-called ‘Outreach Five (not the latest boy-band) consist of Brazil, China, India, Mexico and South Africa. Last year, whilst the black block was busy shutting the city down, the G8 nations were kick-starting the ‘Heiligendamm Process’ aimed to get these countries on board. The problem (from the G8’s perspective), is that these countries aren’t likely to leave it at the level of discussion. They’re demanding an ever larger slice of the pie.


Just about the only place where you can see the aggressive introduction of old-school neoliberal policies on weaker nations is in the countries occupied as part of the ‘War on Terror’. In Afghanistan – and especially Iraq – entire state industries were privatised with a stroke of the American Proconsul’s pen. Water, health, education, industry were all declared open for the attentions of multinational corporations. The result has been as brutal as it has been predictable. Iraq’s public services (once the best in the Middle East) were destroyed almost overnight, spiralling its population further into poverty and easing Iraq’s population into armed resistance that has all but destroyed American plans for Iraq. It is to nobody’s surprise that the oil laws being drafted by the ‘sovereign’ state of Iraq allow for the return of all the major US oil companies, 36 years after they were kicked out by Ba’athist nationalism.

The Iraq war looks more like one last desperate throw of the dice by a visibly weakening empire. Bush’s legacy may well be that the United States is now seen as a fundamentally dangerous country that smaller nations can band together against. In the process this has created organisations such as the Shanghai Cooperation Organisation (China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan — See SchNEWS 551) which now holds joint military exercises “to fight back against new threats and challenges.” They also have an energy policy, the Asian Energy Security Grid, which has the potential to effectively counter US control the Middle-East’s oil.

With this shift in global political power the West is likely to get increasingly desperate as their economies go down the pan and oil resource pressures start to bite. The likely consequences may not be pretty as the US and its allies up their military spending and repression to counter the largely phantom threat of terrorism. But it’s reassuring to SchNEWS that there are still those in the beast of the belly willing to counter it.

* More info on G8 in Japan: www.jca.apc.org/alt-g8/en and http://a.sanpal.co.jp/no-g8