ONE could be forgiven a brief moment of confusion after scanning the headlines in advance of today's Group of Seven meeting in Naples, Italy. One set trumpets the plunge in the dollar's value as topping the agenda; another heralds European stability as the meeting's leading topic. So is it money? Is it politics?
The short answer is: both - reflecting the reemergence of economics as a driving force behind politics in the post-cold-war world. And just as other multinational groups are having to reassess their roles (or having those roles reassesed for them), the G-7 - made up of Britain, Canada, France, Germany, Italy, Japan, and the United States - is facing similar scrutiny.
This week, the Bretton Woods Commission, made up of former senior ministers, central bankers, and representatives from the private sector, recommended significant changes to the International Monetary Fund and the World Bank to help stabilize international exchange rates. The group holds that continuing to rely on ``ad hoc cooperation dominated by the G-7 process'' is inadequate to meet the economic challenges of the 1990s.
On trade issues, implementation of the agreement stemming from the Uruguay Round of General Agreement on Tariffs and Trade is moving forward, although the pact awaits congressional approval in the US. Once the agreement is in force, where does this leave the G-7 as a spur for trade talks?
And politically, the locus of decisionmaking often is New York, Brussels, or Washington. Does the annual G-7 gathering merely serve as a redundant venue for discussions taking place elsewhere among many of the same cast of characters? No breakthrough in talks to ease the US-Japan trade dispute here. The government turmoil in Tokyo that has stymied progress for the better part of a year will render President Clinton's meeting with Prime Minister Tomiichi Murayama little more than a courtesy call.
Yet the G-7 has not outlived its usefulness. Last year's meeting saw enough progress on trade issues to add momentum to the successful conclusion of the GATT negotiations. This year, Russia is taking part in the political discussions, which will deal with the war in Bosnia-Herzegovina and political instability in Ukraine. When the leaders of the seven countries that account for 70 percent of the world's economic activity speak, it seems, people still listen.