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Yeltsin, U.S. economy top G7 agenda

Peter Morton Washington Bureau Chief

Financial Post, Daily edition, Tuesday, June 17, 1997

U.S. President Bill Clinton plans to give top billing to Russian leader Boris Yeltsin and the U.S. economy this week as leaders from the world's top economies duck harder economic issues at their G7 annual economic summit.

Top U.S. officials insisted yesterday that bringing economic and political order to the near chaos in Russia is this year's top priority at the Group of Seven summit meeting, which starts Friday in Denver.

Also on the agenda are Africa's problems, nuclear smuggling, aging populations, infectious diseases and the environment as leaders from the G7 countries begin their three-day meeting. ``Economics remains important, but it should be clear now that the summits are about more than economics,'' said senior White House aide Daniel Tarullo.

The US$20-million summit will include Yeltsin as a full participant even though Russia is not a member of the G7. Britain, France, Germany, Italy, Japan and the U.S. formed the group in 1975 because of the energy crisis and following worldwide recession. Canada joined the following year.

Prime Minister Jean Chretien, along with Finance Minister Paul Martin and Foreign Affairs Minister Lloyd Axworthy arrive in Denver on Thursday. Chretien hosted the Halifax summit two years ago.

Chretien plans to highlight his government's success in reducing the federal deficit and point out Canada is the only country to have a pension system to handle its aging population, said spokesman Peter Donolo.

Clinton -- the first Democratic president to host a G7 summit -- will likely do some boasting about the strength of the U.S. economy, said Tarullo. ``In Denver, as in Tokyo, the American economy will be subject to much attention,'' he said. ``But this year that attention will derive from the strength of its performance, rather than the risks it could pose to the world economy.''

The U.S. came under heavy criticism at the 1993 Tokyo summit because of worries its huge deficit would be a drag on the global economy. Even before this summit begins, there is grousing about the fact China and India -- countries with the largest populations -- are excluded.

``It's hard to argue that Italy and Canada are more important in managing international affairs than China or India, or Brazil and South Africa,'' said Richard Haas, head of foreign policy studies for Washington's Brookings Institute.

Equally importantly, however, the G7 leaders are only giving themselves 90 minutes during the three-day summit to deal with ``hard-core'' international economic issues, said John Kirton, acting director of the University of Toronto's Centre for International Studies.

``The leaders are saying that the world economy is going along so well there is nothing to talk about.''

Yet there are at least four major economic issues the G7 leaders should address, Kirton said.

They include: the European Union's problems in meeting its one-currency goal by 1999; the Japanese government's difficulties with financial reform; Russia's inability to pay its International Monetary Fund loans; and chronically high unemployment among the richer countries. ``Economic growth around the world is not translating into employment anywhere except in the United States,'' he said.

Source: This information is provided by the Financial Post.

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