The fatal wounding of a protester by police outside Friday's meeting of the leaders of the G7 industrialized nations in Genoa is bound to step up the worldwide rhetoric against globalization.
It was the most significant thing to come out of the meetings -- the movement now has its first martyr, though the Italian police claims self-defense.
What will be interesting to see is whether this accelerates the outcry of rage against the supra-national organizations. Is Genoa another Kent State? In 1970, four young people were killed during protests turned violent at Kent State. The incident crystallized opposition to the American war in Vietnam.
But in the case of the globalization protests, like the recent ones at the IMF and the WTO, many of us trying to understand are left scratching our heads. Precisely what is it the protesters seek to achieve? Either some of us are missing the point, and maybe a very big point, or it is the case that the protesters don't remotely know what the G7, the IMF, or the WTO really do.
Actually, there is a lot to get riled up about the G7. What went on inside the meetings, though it appeared to be quite routine, may be a little tricky.
As is their practice, the leaders assessed world economic problems in a communique, in which they said Europe and North America are sort of doing all right but Japan, on the other hand, is in the economic dumpster. What else is new? Next, the G7 communique praised progress in Argentina and Turkey, two of the most visibly distressed emerging market countries, for taking steps to reinforce their counties against future crises.
Just to be sure, it urged those countries to continue implementation of their reform programs "in close collaboration with the IMF and other relevant international financial institutions." Check in with your financial parole officer once a week.
By my way of thinking, the IMF was the winner coming out of the Genoa G7 because it got confirmation of its role as the world's financial fixer-upper.
No new money or loans were explicitly promised, much less recommended, in the communique, for the likes of Turkey or Argentina.
Still there was a curious statement: "The international financial institutions and the G7 countries should stand ready to help countries adopt the policies required to ensure sustained access to capital markets." What could this choice specimen of G7 lingo mean? Talk countries in crisis out of taking desperate measures, like slapping on capital controls or other policies that would impede the free flow of investor capital? I must be dreaming.
A more likely interpretation is that this is a round-about way of saying bankroll all comers, Turkey, Argentina, and anyone else who qualifies, so that nobody ever defaults on sovereign debt.
For if a country defaults, surely it loses its access to capital markets, at least temporarily. And if it has no access to capital markets, it will go broke. So what's the logic here? We shouldn't let a country default because then it might default? Or maybe the G7 means that for as long as a country has access to capital markets it can borrow its way out of default? Anyway, where does this leave the new Bush administration? Wasn't it the plan of US President George W. Bush and Secretary of the Treasury Paul O'Neill to drive the IMF, in particular, out of the bailout business? Stand your ground Mr. O'Neill.
David DeRosa, president of DeRosa Research & Trading, is also an adjunct finance professor at Yale School of Management and the author of In Defense of Free Capital Markets. The opinions expressed are his own.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft