The Achievements of the 1990s

As with older international institutional galaxies such as the United Nations, the G-7's image has been subject to the changeable moods of commentators and citizens. The 1990s opened, amidst the triumph of the democratic market-oriented powers in the Cold War, with the claim that the G-7 was uniquely positioned to serve as the effective centre of global governance. The preoccupation with the superpower nuclear arms race was replaced with the new agenda of regional security, transnational processes that directly affected the security of individuals, and concern about economic issues that were once consider domestic but which now required collective international consideration.1 But euphoria over the end of the cold war was rapidly replaced by disappointment as a series of bitter setbacks resulted in attacks on the G-7 of unprecedented severity and demands for radical reform in its membership and structure lest it become irrelevant and die. 2 Some wanted to see the G-7 transformed into a global European Community with the heavy bureaucratic characteristics that the United Nations has long possessed. 3 Still others saw it as an all-too-effective, closed, rich, Western club that lacked geographic representation and global legitimacy. Infatuated with the inevitable rise of putative powers such as Indonesia and China, practiced in the rhetoric of the largely forgotten New International Economic Order, and sceptical of the value of market economies and democratic polities, the critics called for the G-7 to expand well beyond Russia. 4

More recently, the recession of the early 1990s, high unemployment in most member countries, the heavy burden of and constant setbacks in achieving democracy in Russia, and the insecurities engendered by the globalization of finance and trade have led some to conclude that the G-7 of the 1990s has failed in its primary function of managing the global economy. It has instead retreated before the power of the market into a false conviction that its levers of exchange rate intervention, monetary policy, and fiscal policy are now emasculated. 5 Some have suggested that the EU's single currency, the euro, scheduled to come on stream in 1999, will collapse Europe's four national G-7 members into one for the purposes of monetary and economic policy, and that the G-7 could thus contract into a G-4 - or even a G-3 if Canada was to be left out - in the economic domain. 6

Amidst the debate over the future of the G-7's recent performance, one can detect an assumption on the part of many that a reformed, reinvigorated G-7 could play an important role in coping with the instability and inequality generated by the rampant forces of globalization. 7 This assumption is reinforced by the G-7's historical legacy of fostering co-operative international agreements, ensuring that member governments comply with them, and responding to crises across the economic and security domains. However, a careful review of the record reveals that relative to the challenges it has faced the G-7 of the 1990s has performed well.

Despite early missteps and some reversals, its major achievements have been to guide the largely peaceful end of the cold war and successfully to transform Russia into an irreversibly democratic and market- oriented state through judicious large-scale financial assistance and increasing participation in the G-7. In the central area of macroeconomic management, it has presided over its own and a global economy that have generally performed better than in the previous two decades, through cycles of recession and expansion alike. The Tokyo summit in 1993 used the formula invented by the G-7 in the 1970s to provide the critical push to the market access agreement that ensured the long-awaited completion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) and the creation of the World Trade Organization. As for sustainable development, the G-7 summits of the 1990s have done much to relieve the debt of the world's poorest countries and to give impetus to the completion of the landmark conventions on climate change, biodiversity, and high seas overfishing. And at the Halifax summit in 1995, the G-7 began a process of reforming international financial institutions (IFIs) so that they could deal more adequately with financial crises such as those which erupted in Mexico in 1994 and in Asia in 1997. 8

The members of the summits of the 1990s also have a respectable record in individually keeping the commitments they made collectively. Although conclusive comparisons are difficult to make, the evidence suggests that the recent record of all members in living up to their promises is better than in earlier decades. And on such central new challenges as climate change and debt relief for the poorest, not only the modest, multilaterally inclined Canada but the most powerful, unilaterally predisposed United States have substantially implemented the G-7 agreements they undertook. 9