WHEN leaders of the world's seven leading industrial nations end their three-day meeting in Tokyo on Friday, success may well be measured by what has been salvaged, rather than by grand initiatives. A proposed $4 billion privatization package from the Group of Seven for Russia, for example, drew a belated "preposterous" from Japan. The size of the package is now expected to be closer to $1.5 billion.
Considering the conditions under which the G-7 is meeting, a salvage operation would be an accomplishment.
Politically, new leaders have risen to power in the United States, France, Canada, and Italy. The postwar dominance of mainline parties in Japan and Italy is collapsing under the weight of corruption scandals and voter mistrust. Scandals in Britain have undercut support for Prime Minister John Major. And in Germany, Chancellor Helmut Kohl is struggling with the economic and political costs of reunification with eastern Germany.
Economically, Canada is enjoying modest growth. But the US recovery may be weakening again. Of the European G-7 members, only Britain shows signs of a strengthening economy; the others face rising unemployment. And Japan is in the throes of a recession.
These conditions have left just about every G-7 nation testy about trade relations. Although talks continue, Japan is balking at President Clinton's bid to set numerical goals to increase access for US imports. France, already digging in its heels against reducing farm-trade barriers in negotiations on the General Agreement on Tariffs and Trade (GATT), reacted angrily when the US slapped anti-dumping duties on certain types of imported steel from 19 countries, including France. Canada imposed similar dut ies on several G-7 partners.
These moves have diverted attention from Mr. Clinton's attempts to encourage G-7 countries, especially Germany and Japan, to stimulate their economies and encourage global growth. Germany's move to cut spending by $14.7 billion in 1994 and reduce borrowing from 15 percent to 10 percent of its budget over several years encouraged the Bundesbank last week to lower two key interest rates. Germany's recession and high interest rates have helped perpetuate continental Europe's economic stall. Japan has adopte d a $116 billion economic stimulus package. Clinton himself comes to the table with a deficit-reduction package entering its final stages in Congress.
The president intends to focus on "macro" policies at the meeting, asking his colleagues to establish growth targets for their economies - not an easy task when dealing with seven sovereign nations. But when economic interests coincide, as they do now in the need to revive world economic growth, governments may get more impact by moving in a coordinated fashion than they would by moving independently.
Setting growth targets, plus the reduced Russian aid package and any progress in moving GATT talks forward, would constitute a successful salvage operation.