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.
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