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THE WORLD | RUN-UP TO A SUMMIT

At G-8 Meeting, Bush Will Face a Test on Substance

Europe: Other leaders will be looking to the U.S. for ways to deal with an expected decline in global production and trade growth.

July 19, 2001|ROBIN WRIGHT | TIMES STAFF WRITER

LONDON — With the world's wealthiest countries all facing a serious economic slump that shows no signs of bottoming out, President Bush arrived in Europe on Wednesday to face leaders from Europe, Japan and the Americas eager for his ideas and direction on reversing the trend.

After three foreign tours to introduce himself to Washington's closest allies in the Americas and Europe and to put his administration's issues on the table, this trip will be the president's first real test on the global stage. This time, he will be expected to produce something more tangible, analysts say.

His varied itinerary ranges from dining with Queen Elizabeth II today on his first stop in London to rallying U.S. troops stationed in the volatile Yugoslav province of Kosovo during his final leg Tuesday. But the trip is built around a critical three-day summit of the world's leading industrialized nations in the Italian port city of Genoa, where debate will be intense inside the conference center and on the streets.

The Group of 8 leaders--from Britain, Canada, France, Germany, Italy, Japan, the United States and Russia, a newcomer added to the original Group of 7--won't be the only participants in the summit. In what has become a growing challenge for all major meetings of world leaders, an estimated 100,000 protesters also are expected to descend on Genoa to demonstrate on issues ranging from globalization and debt relief to AIDS and the environment.

Mass demonstrations at two recent summits--when Bush met with 33 leaders from the Americas in Quebec City and with 15 European Union heads of state and government in Goteborg, Sweden--broke down into violence and stole the limelight. The scope of demonstrations in Genoa is expected to dwarf all past protests, including the 1999 World Trade Organization demonstrations by about 35,000 in Seattle.

The summit carries particular importance this year because of the world's woes. A U.N. study issued last week warned that the world faces a "significant decline" in the growth of global production and trade this year. And it concluded that the length and severity of the U.S. economic slowdown will be the decisive factor in determining the world's fiscal health this year.

"The problem we face is that one engine seems to have stalled or slowed down or is not pulling at the rate it was," Ian Kinniburgh, a senior U.N. economist, said in Geneva when the report was released.

The report, which described the slowdown in America in the second half of 2000 as "extraordinary," noted that the world has been a "plane with one engine" since Asia's 1997-98 financial crisis.

Globally, the growth in international trade is expected to drop from 12% last year to 5.5% this year, said the United Nations' "World Economy in 2001." And the growth in gross product worldwide is expected to slow from 4% last year to 2.5% this year.

The central theme of the summit, an event that dates back to 1975 and rotates among the original G-7 members each year, is poverty alleviation. In Genoa, Bush hopes to advance a "vision of partnership" between the G-8 and developing countries based on mutual responsibility, National Security Advisor Condoleezza Rice told reporters before the trip.

The formula being advanced is a foreign extension of Bush's "compassionate conservatism" at home, Rice said. It calls for developing countries to introduce reforms that will promote democracy, open and fair judicial systems and economic accountability while ending corruption in order to attract foreign and private investment. In exchange, the wealthy industrialized nations will help provide the technical tools and financial resources to promote growth.

Developing countries have also been invited to attend--a practice started at last year's summit in Okinawa, Japan--and they include Algeria, Bangladesh, El Salvador, Mali, Nigeria and South Africa.

During the summit, the full G-8 will also formally launch the new Global Fund for AIDS and Health, which may prove to be the most tangible product of the Genoa meeting, U.S. analysts predict. The fund will emphasize prevention as well as treatment of the global pandemic that has already killed 22 million people and infected 36 million others.

The fund has so far won commitments of about $1 billion from governments and private institutions, including $200 million from the United States. But to have an impact, health experts estimate, it will need between $7 billion and $10 billion annually. Rice said she hopes that significant contributions will be added at the summit.

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