- The Washington Times - Thursday, July 20, 2000

Leaders of the world's richest nations plan to spread some peace and prosperity to the world's poorest citizens at a Group of Eight economic summit in Okinawa, Japan, that begins tomorrow.

President Clinton and Japanese and European leaders hope the information technology revolution that is powering the record-long U.S. economic expansion will start to ignite some sparks of growth in poorer countries, with a little help from wealthier governments.

"It must be the central moral question of our time, when 1.2 billion people on this planet live on less than a dollar a day," Treasury Secretary Lawrence H. Summers said in a speech last week outlining the goals of the talks.

"In the absence of major geopolitical conflicts, the successful integration of the poorest economies must surely be the defining challenge of the era to come," he said.

For the first time at the annual economic summit, the G-8 leaders will meet with representatives from the developing world to discuss their concerns about the rapid advance of globalization, which has been accelerating with the instant communication made possible by the Internet and other communications advances.

At those talks scheduled for today, Mr. Summers will replace Mr. Clinton, whose departure for Japan was delayed as he strove to broker a deal between Israel and the Palestinians at Camp David before leaving for the Okinawa summit.

But while the summit's planned agenda focuses on good Samaritan causes like debt forgiveness, fighting AIDS, outlawing "blood diamonds" and conquering the "digital divide" between computer users in the developed world and the computer illiterate in the developing world other, pressing issues are likely to intrude and could overtake the economic talks.

Russian President Vladimir Putin is expected to urge Mr. Clinton not to develop a national missile defense system that Russia and European nations fear will set off a new arms race. Mr. Clinton is weighing whether to deploy the system next year.

Mr. Clinton also is scheduled to visit Okinawa's Peace Park, commemorating the end of World War II a half century ago, to give a speech emphasizing the United States' desire to be "good neighbors" and mend fences with Okinawa. Island residents have been offended recently by reported sexual misconduct by some of the 30,000 U.S. military personnel there.

But for now, Mr. Clinton and the other leaders from Russia, Japan, Britain, France, Germany, Italy and Canada are taking an unusual moment of worldwide calm and prosperity to ponder the lot of the world's poor and build on plans laid at last year's G-8 summit to provide $50 billion in debt forgiveness to financially beleaguered African and Latin American nations.

Voters and leaders of industrial nations are more conscious than ever that poor health and inadequate education, chronic warring and strife are major factors holding back economic development in Africa, southeastern Europe and other poor areas.

Heading off conflict

While the movement to grant debt relief to nations that plow resources into better health care and education gained momentum last year, the cause celebre this year has become the move to cut off funds to African nations that fuel conflicts with the sale of "blood diamonds."

Following a ban by the United Nations earlier this month on the export of diamonds from Sierra Leone, a West African nation mired in conflict, G-8 leaders are expected to announce steps to stem illegal diamond trade, curb small-arms sales to war-torn regions and prevent children from becoming soldiers.

Sierra Leone sells about $70 million in diamonds a year, while worldwide trade in so-called "conflict diamonds" could be worth as much as $750 million a year, according to industry estimates.

Breaking the tie between armed conflict and poverty has become a preoccupation of global financial ministers, from the World Bank and International Monetary Fund to the U.S. Treasury.

"It must be the central global security question, when some of the greatest conflicts in the world have had their roots in economic failure and despair," said Mr. Summers.

Technology's promise

Economic ministers point out that the "New Economy" has the potential to drive growth and bring diverse areas of the world together like never before. With the touch of a finger using the World Wide Web, business can be transacted between Beijing and Washington in seconds and the seeds of liberating ideas can be planted.

"But when half of the world's population has yet to use a telephone, and 40 percent of African adults cannot read, there is perhaps an equal chance that technology will speed further divergence," said Mr. Summers.

"In large parts of Africa today, young girls are more likely to die before the age of 5 than they are to learn to read," he said. "To put it bluntly, until we see substantial improvement in these figures, the dream of putting the world's poorest citizens on a fast track to technology and growth will remain just a dream."

Government has a key role to play in fostering peaceful economic growth by providing "global public goods" particularly, health care and education, he said.

European and Japanese leaders also are promoting efforts to spread peace and boost the prospects of the planet's poorest residents. Japan, host of the summit, has pledged a generous $18 billion in aid to fight the spread of diseases and develop information technology far beyond the hundreds of millions of dollars pledged by the United States.

"Some of the richest, safest, freest countries in the history of humanity," said French Foreign Minister Hubert Vedrine, "must find ways of limiting conflicts, shortening them, and containing their tragic human consequences."

The United States is enlisting technology leaders such as America Online and Microsoft in efforts to bridge the "digital divide," under the theory that the companies that spawned the technology revolution are best able to solve such problems.

While the leaders contemplate ways to spread the benefits of new technologies to the rest of the world, studies show they have a long way to go. Only 1 percent of Internet traffic originates in Africa, according to recent estimates, while even developed nations in Europe lag far behind the United States in reaping the benefits of technology.

"U.S. businesses and workers appear to have benefited more from the recent advances in information technology than their counterparts in Europe or Japan," U.S. Federal Reserve Chairman Alan Greenspan said in a speech last week, citing rigid labor markets in those countries as the reason for the shortfall.

Still, many economic analysts share in the hope that as technologies spread, so will rapid, inflation-free and environmentally friendly economic growth.

"The technology industry is growing at an astonishing rate around the world, while most other industries are experiencing lackluster growth and fierce competition," said Edward Yardeni, chief economist with Deutsche Banc Alex. Brown in New York.

Technology, because it consumes few resources, is the reason the global economy can boom without igniting inflation, he said. "Technology uses only one commodity very intensively namely, knowledge. In the physical realm, it mostly consumes commodities that are abundant sand, water and air."

LOAD COMMENTS ()

 

Click to Read More

Click to Hide