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Financial Post, Weekly edition, Fri 08 Jul 94, page 7

Keywords: Economic summits International finance Foreign relations Government spending Media

Everyone loves a circus: Welcome to the G-7

William Watson

This week the G-7 leaders are meeting in Naples. Next year, they meet in Halifax, marking the end of their third cycle of meetings, starting from 1975. The time has come to ask whether they should go on meeting like this.

No one can object to the idea that leaders would want to meet from time to time. They often have to make important decisions on our behalf. It's good that, as President Ronald Reagan once said, they have an idea what the person on the other end of the telephone is really like.

But that's an argument for summits in general. It's not an argument for annual summits of seven leaders at a throw - or is it eight, since the Russians have attended the last four in a row? - or nine, the president of the European Commission having been a full-fledged member since the mid-1980s? Apparently he started in a silent, butler-like role but has since become more active, even though he's still unelected. Of course, he gives Europe five seats at a table of eight, or six out of nine, if you count the Russians as Europeans.

Some even question why Canada is at the table. Because of our high incomes per person we obviously make a greater contribution to financing international organizations. But not necessarily bigger than Sweden or Austria or the Netherlands, or many other rich, mid-size countries that trade as much as we do yet aren't in.

Maybe when you're deal-making it's useful to have smaller fry like us and the Italians present, either to give cover to the big-power brokering that's going on, or even, as probably happens in some cases, to help out as honest brokers. But if deals are made at the summit, it's pretty clear it's going to be the big countries that make them. And if deals aren't made, the question arises: why have a summit? Does mere chat justify all the fuss?

''Mere chat'' may be too severe, but there seems little doubt that the ratio of show to substance is getting pretty high. In recent years, about 5,000 journalists have covered the summit. No doubt a large number are on a death watch: if a bomb went off, wiping out the leaders of 70% of the world economy, and your news organization wasn't there, you'd probably be looking for a job pretty soon afterward.

But apparently a large number of other journalists are there mainly because the host government caters to their every need. The principal reason for this large expenditure of taxpayer dollars is that governments are deathly afraid that less than lavish facilities for the press will translate into stories about how the summit has failed, which will reflect poorly on the home government and perhaps cost it points in domestic politics.

Economists' theories of public spending offer many reasons why this or that expenditure may be justified. Keeping journalists fat and happy isn't one of them - although perhaps that's a measure of economists' naivete.

Of course, as much as the leaders gripe about the fact that the media manufacture stories, don't understand the true purpose of the summit, focus on winners and losers when in fact everyone wins from co-operation, blah, blah, blah, if the press weren't there, the leaders probably wouldn't be, either. Flies do like honey.

In fact, one of the best-controlled summits, from the point of view of media relations, was our own first summit, at Montebello. At the end of each day's sessions, Pierre Trudeau flew off by helicopter to brief the assembled press, who had to content themselves with the joys of Ottawa in the summer, while the leaders were free to re-create themselves in and around that wonderful old recreation spot. That the procedure has never been repeated suggests isolation may not have appealed to them.

As long as the press keep going, the politicians are bound to show up, and as long as the politicians show up, the press will be there. When you get down to it, most people like a circus. Especially in summer. See you in France in 1996 for Round 4.

DNOTE (Ed. note) William Watson teaches economics at McGill University in Montreal.

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