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Western Press Review: Global Economics, Russia-NATO, Germany's Banks, Sino-Russian Relations

Prague, 18 July 2001 (RFE/RL) -- Commentary and analysis in the Western press today focuses largely on the global economy, ahead of Friday's (20 July) meeting of the leaders of the world's seven major industrial nations, plus Russia. Among the economic issues addressed are the global effects of trade and the potential for an ongoing worldwide economic slowdown. Other commentary centers on Sino-Russian relations in the wake of the meeting this week between the Russian and Chinese presidents, as well as India's relations with Pakistan. Additional topics include the possibility of Russia joining NATO, this week's global warming summit in Bonn, and the restructuring of funding for Germany's banks.


In an analysis in "The Wall Street Journal Europe," Keith Marsden considers the question of whether poorer nations are helped or hurt by increased global trade. He says that nations with a strong export performance and which are open to trade ultimately see a rise in national incomes. Marsden writes:

"Attention should be drawn to the composite human development index calculated by the UN Development Program. This index reflects achievements in basic human capabilities leading to a longer life, being knowledgeable and enjoying a decent standard of living. With just one exception, all of the countries covered in this study experienced significant improvement in their absolute scores from 1975 to 1999, with the sharpest jumps taking place among the strong exporters. And the gap separating them from the top-ranked industrialized country also narrowed.

"[These] findings," Marsden concludes, "should lay to rest the myths that disparities between rich and poor countries have widened and that trade hurts the poor."


In "The New York Times," analyst Jeffrey Garten says the global economy "has come to resemble a balloon rapidly losing air." He adds that above and beyond rhetorical support for free trade, what is needed is a strategy on globalization.

"The forces that have increased flows of money, goods, services and information around the globe and helped create growth are now working to make the economic downturn deeper and more widespread. Few mechanisms now exist to manage globalization. [We] live in a world economy, but we lack institutions that could stabilize and regulate this economy. [The] G-7 leaders have to decide whether they have the foresight to construct new systems that can regulate commerce across borders as well as act to moderate a worldwide recession."

If they fail to create such mechanisms, Garten warns that the resulting problems will be twofold. First, if economic problems in one part of the world are not successfully addressed, these problems will spread to other regions. Secondly, he says, "Unfettered market forces can lead to job losses and financial problems that could create a backlash against foreign investment and result in protectionism and overregulation."

Garten adds that eventually, the G-7 nations and Russia "will have to address the widening divide between rich and poor nations. This means providing more debt relief and increasing humanitarian aid to combat diseases like AIDS, as well as helping to build basic health systems in poor countries."


Ahead of the G-7 meeting in Genoa, "Die Welt" runs a commentary by the 1998 Nobel Prize winner for economics, Amartya Sen. He outlines in 10 points his view of globalization. Sen emphasizes that anti-globalization demonstrators belong to the global organizations in which "kids from all over the world participate."

He goes on to argue that globalization does not mean "Westernizing" the world, but is the result of a natural development in which throughout history there has been an East-West exchange of ideas, inventions, and a migration of peoples. What we need now, he says, is a just distribution of the fruits of globalization between the rich and the poor countries.

Sen contends that a market economy is the only path to prosperity. He also notes the positive developments since the end of World War II: the end of colonialism, the rise of new international non-governmental organizations, the new prominence of environmental issues, and, above all, democracy is only now being seen as a universal right. Sen draws the conclusion that "doubts about globalization must be countered by building a global world."


In "The Washington Post," Robert Samuelson writes in a commentary that the leaders of the major industrial nations "seem almost indifferent to the threat of a global recession. Despite widespread prosperity -- or perhaps because of it -- economic forecasts have consistently been too optimistic," he says. "[Among] economists, the consensus remains that both global and U.S. recessions will be avoided. [But] the bleaker possibility is that without the prop of the U.S. [economy's] boom, everyone flounders."

Samuelson adds that once started, "a global recession could have a fearsome political fallout. It would increase protectionist pressures, intensify the backlash against globalization, spawn global discord (countries would blame each other), and threaten the survival of leaders in rich and poor countries alike. At their Italian summit [this weekend], the world's most important leaders ought to discuss how to minimize the danger." If they don't, Samuelson says, "they will surely be blamed for the consequences."


An editorial in "The New York Times" says that the new treaty of "friendship and cooperation" concluded between Russia and China this week does not "signal a return to Cold War tensions with the United States. But," the paper writes, "it does represent an effort by the Russians and Chinese to strengthen their hands in future diplomatic dealings with Washington. Triangular diplomacy is back."

The editorial goes on: "Washington's record of military intervention in Iraq and the Balkans, its promotion of NATO expansion toward Russia's borders and its talk of building a missile shield have helped nudge Russia and China closer together."

The paper also says that Russia and China, both "under pressure to deliver greater prosperity to their people through market-based growth, vitally depend on continued access to American trade and development. [But] both are uneasy about the global sweep of American foreign policy, and with this agreement are establishing at least a symbolic barrier to unhindered American domination."

The editorial concludes: "[A] failure to take Russia and China into account will fan dangerous resentments and drive them away from Washington and toward each other."


In a commentary carried by the "Frankfurter Allgemeine Zeitung," Erhard Haubold writes that Indian Prime Minister Atal Bihari Vajpayee and Pakistani President Pervez Musharraf left their meeting in Agra, India, empty-handed. But in spite of the failure of the talks, he adds, "the ice has been broken."

Haubold says that now both sides will need to patiently take confidence-building measures, especially on the nuclear front, facilitating border crossings between the two countries and stepping up economic exchange. He writes that, taking into account the difficulties of the Kashmir issue on both sides, "the slightest progress on Kashmir deserves to be celebrated as a turning point."


In "The Washington Times," editor-at-large Arnaud de Borchgrave considers the possibility of Russia joining NATO. "Today, a geopolitical vision for 21st-century challenges is sadly lacking," he writes. And "as long as Russia is kept outside looking in, a latent adversarial relationship [with the U.S.] will persist. So will the temptation to show the world it has other options, e.g., this week's friendship and cooperation treaty with China, albeit not aimed [in their words] 'at any third country.'"

De Borchgrave quotes German Defense Minister Rudolf Scharping as saying that "a new security system to include North America, Europe, and Russia is inevitable in the next 10 years." A new strategic geopolitical structure is sorely needed, the writer says, because the post-Cold War decade failed to produce one, apart from the idea of U.S. unipolarity. He writes:

"The concept of the U.S. as the world's only superpower is now a convenient way to avoid thinking about the new century's security problems. A superpower that is both risk-shy and casualty-averse has lulled itself into a false sense of security."


An editorial in "The Wall Street Journal Europe" looks at the joint announcement by EU Commissioner Mario Monte and German Deputy Finance Minister Caio Koch-Weser that the current form of German state aid to banks will be restructured.

The paper writes, "The state banks are going to be essentially privatized -- they will finally be no better and no worse off than their current competitors in the private sector." This, it says, "is a huge victory for Europe. Mr. Monti seems to have overcome the force of almost a century of German political history."

Under the new agreement, the paper writes, "banks will compete on a level playing field and German consumers will benefit from increased competition. For Mr. Monti and the European Commission, the 17 July breakthrough agreement showcases the EU at its best -- opening markets and sweeping away the socialist cobwebs of the previous century. And for the Germans, once again the ruling Social Democrats are in a position to forge a more modern Germany."


Another editorial in "The Wall Street Journal Europe" assesses this week's Bonn meeting on climate control. The paper writes: "Delegates from 180 countries [are descending] on Bonn this week for what is grandiosely billed the Sixth Session of the Conference of the Parties to the UN Framework on Climate Change, or, in an inelegant shorthand, 'COP-6.' The 12-day meeting is being billed as a last-ditch effort to save the 1997 Kyoto Protocol from becoming non-recyclable trash."

The editorial argues that missing from previous conferences on climate change has been "genuine debate about whether the Kyoto Protocol is, or is not, a good treaty. Instead, we hear it endlessly repeated that the protocol is 'the only [option] we have,' as EU Environment Commissioner Margot Wallstroem put it recently in the 'Frankfurter Allgemeine Zeitung.' This does not strike us as a persuasive argument," the paper comments, "but it is a very convenient line for the EU and other signatories to the Protocol to adopt."