Alfred Herrhausen Gesellschaft - Das internationale Forum der Deutschen Bank - 2007 G8-Summit

The timing for the German Marshall Fund and Alfred Herrhausen Society conference could not have been chosen better to discuss “Reconciling National Security and Economic Development.” While the German Federal Ministries were making the final preparations for the meeting in Heiligendamm and German media coverage was focussing on security measures and civil rights, discussions on the conference’s podium were at times controversial, but above all constructive.

How close this conference was to the pulse of the political community was reflected not just by the high-level composition of the three panels. This was also vouched for by the audience of specialists from embassies, foundations, international organizations and corporations, and especially by the speech given by Jörg Asmussen, who presented the strategy and expectations of Germany’s Ministry of Finance.

Asmussen is Head of the National and International Fiscal and Monetary Policy Department at the German Ministry of Finance and was thus directly involved in the preparatory work for the Summit in Heiligendamm. Right at the start he gave not only an introduction into the issues, but also profound insights into the objectives of the German Federal Government – a look behind the scenes of today’s politics.
“It is important that we actively shape globalization,” stated Asmussen. World economic growth benefited not only the “G8”, Asmussen went on to say, but also the developing and emerging market countries. Thus, the topic of the meeting was not just the global economy itself, but also the insight that the world’s resources are finite. According to Asmussen, economic policies, energy security and environmental protection were thus intricately linked to one another. Asmussen went on to say that globalization until now has undergone a phase of extraordinary growth – however, it was growth whose distribution and structure would have to be evaluated to a greater degree. “For this reason,” Asmussen said, “Germany’s Federal Government has placed the focus of this G8 Summit on two issues: growth and responsibility in the world – as well as growth and responsibility in Africa.”

This was an issue that received a positive response above all from Jim Kolbe, Senior Transatlantic Fellow of the German Marshall Fund: “I find the German Federal Government’s Africa initiative to be extremely positive,” said Kolbe. “It is very good and entirely correct that the G8 now directs it attention even more to Africa. Based on my previous experience, I have become somewhat cautious with exuberant euphoria. It is – especially in Africa – simply not so that a lot of money helps a lot. But the new initiative focussing on good governance, sustainability, transparency and structural change is very promising overall.”

Within the framework of the first panel on energy security, economic development and stability, Africa was repeatedly the focal point of the debate. The bottom line: China’s commitment does bring large sums of money to Africa. At the same time, the population profits too little when trading in resources is not linked to structural changes that lead to more just social and political systems in the countries involved.

Antónia Costa Silva from Partex Oil and Gas, Viktor Ebling from Germany’s Ministry of Foreign Affairs, Fareed Mohamedi from PFC Energy and Richard O’Neill from the American Federal Economic Regulatory Commission unanimously concurred that in any event the greater importance of Asia, and above all China, was a fact that the G8 would have to address, especially if the G8 would like to implement effective energy security and environmental protection policies.

The second panel of the day on international investments, sovereignty and protectionism with Jim Kolbe, Raphael Kaplinsky from the Open University in Milton Keynes, England, and Edward Graham from the Peterson Institute for International Economics had similar words of caution: even if economic competition has increased as a result of globalization, success could hardly be brought about by trying to isolate oneself. Edward Graham emphasized that although the U.S. appreciates the benefits of foreign investments – they are, in fact, only welcome with reservations. And this is so, according to Graham, even though there have only been a negligible number of cases in which damages were actually caused by foreign investments.

In contrast, a more sceptical opinion of globalized markets was presented by Raphael Kaplinsky. Even if globalization has led at least to bottom-line global economic growth until now, rising unemployment has been reported in both OECD countries and China. The resulting lack of future prospects was partly responsible for the spreading belief in “magic solutions” – for example, Christian or Islamic fundamentalism, warned Kaplinsky.

Problematic aspects, in particular, the development of international copyright law based on the Trade-Related Aspects of Intellectual Property Rights agreement, were discussed by the final panel of the conference. Anjan Das from the Confederation of Indian Industries, Jan-P. Hoffmann from Deutsche Bank Research, Joseph Straus from the Max Planck Institute and Christopher S. Wilson, U.S. Trade Representative, emphasized above all the benefits of intellectual property rights for emerging market countries. How to balance companies’ interests and the third world’s need for inexpensive medicaments remained a controversial question. “The system,” warned Joseph Straus, “must become more effective and more rational, and not just follow what the U.S.A., Japan and the Europeans do.”

It is a view shared by others besides Straus, especially considering the demonstrations and protests surrounding the G8 Summit. However, the Berlin conference on May 24 was miles away from the fundamental rejection of the G8 Summit and from the abridged media coverage, as Wolfgang Nowak, Managing Director of the Alfred Herrhausen Society, the International Forum of Deutsche Bank, emphasized: “I am particularly pleased that we have an event here that focuses on content. The debate in the media is currently preoccupied with fences, dogs and cars set on fire. Unfortunately, only too infrequently are the issues themselves covered. I am very satisfied with this debate, at times controversial, with profound insights into the issues at stake.”