G-15: A Different Economic Summit

KUALA LUMPUR, Malaysia's elegant capital city, played host in early June to the first economic summit of the new ``Group of Fifteen'' countries: Algeria, Argentina, Brazil, Egypt, India, Indonesia, Jamaica, Malaysia, Mexico, Nigeria, Peru, Senegal, Venezuela, Yugoslavia, and Zimbabwe. The inauguration of the G-15 economic summit launches a debate about how to judge and measure true ``development.'' The combined populations of the G-15 total 29.6 percent of the world's people. By contrast, the Group of Seven industrial countries (the US, Britain, West Germany, France, Italy, Canada, and Japan) meeting this week in Houston make up 12.7 percent of the globe's population.

Press coverage of global economics has been both traditional and conventional. Alternative, unofficial voices, such as those of non-governmental groups including the London-based The Other Economic Summit (TOES) have been barely audible. In an era of shuffling trade blocs such as Europe 1992, the North American Free Trade Zone, and the Eastern European countries, the new G-15 is a natural response.

The G-15 grew out of initiatives of the South Commission, a group of leaders from developing countries. Included was former president of Tanzania, Julius Nyrere, and Malaysia's Prime Minister, Dr. Mahatir Mohamed, who hosted the G-15 summit. President Suharto of Indonesia was in Kuala Lampur as was India's prime minister, V.P. Singh, who felt G-15 would enhance cooperation between southern countries. The summit's final communiqu'e included references to a new post-cold war global economy, and a need for North-South sharing of responsibility.

The new G-15 country-group accepted responsibility for their own development and change, and cautioned the industrialized nations on ``their formation of economic groupings... that could lead to a fragmentation of world trade.'' Key issues included unresolved external debt problems and the ongoing transfers of resources from poor to rich countries. Many observers now see the 1980s as a wasted decade - when the economic development process reversed itself with tragic results: widening gaps between rich and poor. These failures produced a crisis of confidence in the South about the viability of European industrial models.

The G-15 pledged to continue to meet and form common approaches to debt problems. It reaffirmed a commitment to ``a balanced and successful conclusion to the Uruguay Round of GATT negotiations which takes into account the concerns and needs of developing nations.'' The Group called for new approaches to drug enforcement - crop substitution rather than eradication programs. A strategy on funding environmental protection will be presented at the 1992 UN Environment Conference in Brazil.

G-15 will likely continue the work of the South Commission whose report, ``Toward a New Way to Measure Development,'' formed new economic models and measures of progress. The report concluded that more realistic ``scorecards'' of development were needed. New indicators would include such non-monetary indexes as literacy rates, life expectancy, unpaid productive work - along with indicators of energy-efficiency, military versus civilian budget ratios, and environmental depletion. The South Commission will release its final report in Caracas, Venezuela on August 3.

The South Commission's work may have triggered the new UN approach to measuring development; it used to rely exclusively on Gross National Product (GNP), as does the World Bank and the IMF. Recently, the UN Development Program released a new ``Human Development Index'' (HDI) which measures such factors as literacy rates and life expectancy.

Comparing the GNP and the HDI measures of human progress changes the ranking of many countries. For example, Sri Lanka, whose GNP is only $400 per person, actually offers its citizens purchasing power equivalent to $2,000 per year, a life expectancy of 71 years (higher than the USSR). Its literacy rate of 87 percent outstrips the US (about 80 percent).

Costa Rica, with purchasing power of $3,760 per head, 93 percent literacy, and life expectancies of 75 years, streaks ahead of several European countries. The US drops from second (after Switzerland) in the GNP stakes to 19th on the HDI scorecard. The purchasing power of G-7 country members is about $14,000 per head per year, while this average among G-15 member countries is about $3,500. Thus, by some quality of life measures, many polluted industrial countries may fall behind more pristine, resource-rich ones in the South.

The G-15 will cause a re-thinking of ``development.'' New definitions will emerge as differences between money and real wealth are clarified. Many South nations may develop along their own specific, cultural paths, rather than slavishly following World Bank and IMF formulas. The end of the cold war also signals the end of ideological, mutually exclusive capitalist or socialist paths to progress. The realities of the UN's fourth development decade of the 1990s are likely to be more complex. The G-15 will enrich this debate as countries find their own innovative potential in an era of global interdependence.