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More Efficiency, Less Dignity:
British Perspectives on the Future Role and Working of the G7

Michael Hodges
London School of Economics & Political Science

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Institutionalising the Summit

The G7, in the British view, is a forum rather than an institution. The UK has resisted the creation of a bureaucracy for the G7 and is not sympathetic to the idea of a secretariat, since that would imply that it is an executive body -- they point to the contrasting incipient Japanese conception of the G7 as a year-round process requiring a more institutionalised follow-up as well as preparation. This is probably a majority view in the G7 and has not yet been discussed by the sherpas since Tokyo, but (as a few British civil servants and journalists admit) there is a case for a corporate memory and institutional follow-up for the summit, not least because of changes in government and changes in sherpas.

The British view of the G7 as a means of communication rather than an executive body can be seen in its approach to the question of aid to Russia. Britain favoured coordination of national assistance to Russia through a network embracing the G7 embassies in Moscow, rather than a free-standing support implementation office -- which was the initial US proposal. The US is in fact providing the chair (based in the US Embassy) for the G7 Support Implementation Group in Moscow for the first two years, taking over from Japan (which chaired temporarily in 1993). This has allayed British fears that an American "Mr. Big" would have an executive function, although the US Director, with the SIG's secretariat in the US Embassy, will still be strongly placed. It is however important, in the British view, to ensure that the G7 does not become responsible for administering programmes: the Support Implementation Group in Moscow is for troubleshooting with Russian authorities and to a limited extent international financial institutions and national aid bodies, rather than administering the aid programmes themselves.

The G7 role vis-a-vis Russia is a special case because of the high political importance of G7-Russian relations, never more so than in the period of uncertainty and instability that seems likely to follow the result of the parliamentary elections in December. The worry is Russian pressure to get the G7 to override the IMF/IBRD, and to put pressure on them to weaken their normal conditionality. The G7 SIG in Moscow has as its main aim the removal of bottlenecks on the Russian side. Certainly the G7 has played a constructive role in facilitating the provision of aid to the FSU (especially Russia), but has played a less important role in Eastern Europe, where the G24 took the lead. The G7 played a significant part in the creation of the Systemic Transformation Facility (a $3 bn IMF facility for Russia, with more for other economies in transition) as a stepping stone to normal IMF stand-by arrangements: the fact of the impending G7 summit, needing something new to offer Russia, which was unable to meet its reform commitments, was an important factor in leading the IMF to create the STF. Russia got 50 per cent of the three billion dollars up front when they presented a moderately convincing programme. The G7 also launched the $3bn. privatisation and restructuring programme, with international financial institutions also making contributions.

Whitehall saw limited value in the spring 1994 G7 employment meeting, which in any case was not a summit because the Heads did not attend. The British feel that one can compare experiences and derive great benefit from learning about approaches being adopted in different countries, but that unemployment is a symptom of other developments: it is a domestic concern with little opportunity to engage in effective action internationally. The British do not want such meetings to supplant the work done in existing international organisations, such as that of the OECD on structural rigidities, as well as that in the EU on the Delors White Paper: a brainstorming meeting on unemployment would have been more useful before the EU discussed the Delors White Paper at the December 1993 European Council, rather than afterwards.

The G7 is not an institution, but it can effectively employ its credibility; thus the fact of the summit was effective as a source of major pressure on the quad talks on the market access package taking place before the Tokyo summit to produce some result. This use of pressure (combined with the effect of the G7 countries using their national influence in wider fora) to get others to do things on a timetable is one of the major strengths of the G7.

Source: The International Spectator, 29, No. 2 (April/June 1994), Special Issue, pp. 141-159. Copyright ©, Istituto Affari Internazionali. Reproduced by permission of the author and Istituto Affari Internazionali.

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