Next time they get together, the leaders of the G-8 may just welcome the distraction of a good riot.
The 100,000 protesters are less a starring attraction in the Genoa summit than a backdrop to a more important issue: the pain of a global economic downturn hitting the world's leading economies at home. Beneath the veneer of unity at the summit lies deep discord. A poorer global economy is forcing these nations to compete for resources and power.
And globalization, as a result, is in trouble. This G-8 summit is a litmus test for the agenda of global economic integration, better known as globalization. The summit agenda shifted many times in the weeks before leaders went to Genoa. This reflected unease, a slowing of the once relentless juggernaut that has lowered trade barriers and placed more power in the hands of international institutions.
Times are changing. And the G-8 is in a dramatically different situation than just a year ago, when leaders met in Okinawa. The official communiqué from that summit touted a strong global economy, an Asian economic recovery and urged G-8 members to push the process of economic globalization along in the developing world.
But for the first time since World War II, all the world's great economic engines are slowing simultaneously: the United States, Japan and Europe. America appears ready to recover. But Japan is steadily worsening, slouching toward recession as its gross domestic product falls 0.2 percent in the first quarter of this year. Production is falling, too, according to the Bank of Japan. The industrial base is archaic. Capital formation lags far behind that of the United States.
Europe's drive toward political unity is faltering on sharp divisions over how to pull out of its economic slump. The gross domestic product of the eurozone rose a mere 0.6 percent in the first quarter over the previous quarter, and the European Central Bank is predicting only 2.0 to 2.5 percent GDP growth for 2001. There is tremendous disparity in economic performance between various members of the European Union. Germany slips toward recession. Italy's new government has decided to strike out on its own to find a remedy, boosting government spending.
The run-up to the G-8 illustrates the cracks and fissures that are now spreading across the agenda of globalization. In the weeks leading up to the agenda, various governments suggested various topics: from helping the developing world to dealing with the problems of the Middle East. This, by itself, suggested a distinctly leaderless organization unable to reach a consensus on how to address their own economic problems. There were also plaintive pleas: Please don't abandon the agenda of global economic integration, ran one such plea printed in The New York Times.
As important was the signaling that the world's leading economies might just turn on each other -- since they had very little of an economic nature to talk about. Some governments suggested turning on the United States over its opposition to the Kyoto protocol and the Bush administration's plans for a National Missile Defense.
But the desperation of the G-8 governments was best measured by the 11th-hour juggling of the agenda: the suggestion that national leaders embrace the agenda of the 100,000 protesters in the streets. The notion of embracing causes like poverty in the developing world, AIDS and debt relief even prompted the Italian government to suddenly invite a group of developing world leaders to attend the summit.
All these are signs of a decade-old juggernaut now under extreme pressure. The agenda of globalization - lower trade barriers, freer flows of capital, greater power placed in the hands of international and multinational organizations - has seemed nearly unstoppable. However, it is being slowed. Globalization is easy when times are good. Now, times are hard.
Genoa reveals just how much the momentum has shifted. If things continue the way they are for much longer in much of the world, at the very next G-8 summit, don't be surprised if presidents and prime ministers cheer a good riot in the streets -- one that will distract from this sudden turn of events.
Matthew Baker is chief analyst for STRATFOR, the global intelligence company. For more information about STRATFOR, click here.