If the annual meetings of the Group of Seven industrialised countries (now plus Russia) did not exist they would probably have to be invented. The world economy is now so interconnected that discussion and coordination of policy have become more and more essential for effectively managing it. Since its health depends also on political stability these summits have taken on an increasingly political tone. Bosnia, Hong Kong and NATO enlargement have therefore figured as prominently in the Denver summit, which concluded yesterday, as macroeconomic matters and the international environment, in addition to issues such as Northern Ireland, which was discussed in important bilateral meetings between President Clinton and Mr Tony Blair.
On economic policy, Denver has restated the commitment to sustaining noninflationary growth in the world economy as the best means of creating jobs. Leaders were more conscious than usual of the different policy prescriptions appropriate for their varying economic cycles and conditions. The United States has led the way in growth among the major economies, followed by Britain. There was considerable resistance to suggestions that they provide a model the others should follow in matters of restructuring labour markets and deregulation. Instead, the summit communique provides a country by country checklist of the respective problems they face, within an overall context of open markets, freer trade and continuing close monitoring of economic globalisation.
The Denver summit maintained a commitment to stimulating development among the poorest economies, notably in Africa, with a policy framework which identifies eradicating poverty, developing human potential and promoting dignity, and increased trade and investment, among its goals. These are laudable objectives, but they must be tested against concrete measures followed up in the international forums where development policies are negotiated. On this benchmark there are some grounds to expect progress on one of the most fundamental obstacles facing the poorest economies, their international debt burden.
The communique argues that "the success of the new initiative relies on a combination of strong debtor reform programmes and effective debt relief".
This balance has certainly not been there at all sufficiently in recent years. International financial institutions have insisted on structural reform programmes which have often done more harm than good, especially to human resource programmes in health, education and women's welfare that are now being recognised as fundamental prerequisites for sustainable development. The Denver summit has given a welcome stimulus for efforts to reduce or extinguish indebtedness among the poorest countries.
The summit statement glosses over differences on environmental policies, which will be highlighted at the United Nations review conference in New York today. On Bosnia it registers a welcome recognition that an international force should remain there after the NATO mandate runs out next year. Relations with China loomed large, with calls that its commitments to Hong Kong be honoured and some encouragement for that country's ambitions to join the World Trade Organisation. President Yeltsin's presence in Denver underlined the importance of keeping relations with a reforming Russia on a stable and more inclusive course. They will be closely tested as NATO enlargement negotiations proceed this year.