Has the rich man's G8 had its day?

10th July 2009, Comments 0 comments

Formed in the aftermath of the 1970s oil price shocks in order to allow the world's major industrialised democracies to coordinate economic strategy, the group now faces competition from huge emerging powers such as India and China.

L'Aquila -- As G8 leaders were joined Thursday at their summit by counterparts from the world's major emerging economies, the question was once again being asked: Has the rich man's club had its day?

Formed in the aftermath of the 1970s oil price shocks in order to allow the world's major industrialised democracies to coordinate economic strategy, the group now faces competition from huge emerging powers such as India and China.

Many think the rich world cannot now rise to global challenges like climate change and the economic crisis without the help of these fast developing states, and some argue it has a moral duty to listen to their voices.

The G8 powers have taken much of this on board, and now invite developing world leaders to their meetings: The programme for Thursday's deliberations looks like an algebra problem, featuring talks billed as "G8 + G5 + 1".

Thus the G8 -- Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- meets with the "outreach five" -- China, India, South Africa, Brazil and Mexico -- and with the "+1", in this case Egypt.

Nevertheless, the big eight are clearly still billed as the "motor" of world economic planning, and the 8+5+1 structure still excludes many rising powers in Africa, Latin America, South Asia and the Arab world.

Increasingly, eyes are turning to yet another mathematical formula, the G20, which includes all the G8 and G5 members plus Argentina, Australia, Indonesia, Saudi Arabia, South Korea, Turkey and the European Union.

Since the start of the economic crisis this group has taken the lead in formulating a global response, and some of its members would like to see it supplant or even replace the less representative G8 as a policy maker.

This thought seems to have been in the heads of the American and British delegations as they planned for this week's events -- both emphasised ahead of the G8 that it stood at the halfway point between two G20 summits.

"This summit falls squarely between the G20 summit in London and the G20 summit that we will host in Pittsburgh at the end of September," said Michael Froman, US President Barack Obama's deputy national security advisor.

"This will be more about exchanging views at this midpoint between the two G20 summits than an opportunity to produce a series of specific deliverables."

A senior British official, briefing reporters ahead of Prime Minister Gordon Brown's departure for Italy, described the summit as merely "an important milestone" between the G20s in London and Pittsburgh.

After the first day of the summit, which was limited to G8 leaders, France's Nicolas Sarkozy said he had always thought it would be "unreasonable" to try to rescue the world from recession without involving the emerging nations.

"So, does that mean that we should pass from a G8 to a G20, sparing ourselves a G14 stage? I'm not sure," he said.

"Is that to say that the G8 should disappear? No. We could quite easily envisage meeting within the context of a two-and-a-half day G14."

"What I'm against is the idea that the Eight are called for two and a half days, and the Six just for a morning. I'm not saying the Eight don't have things to say to each other," he explained.

At least one G8 member, however, remains opposed to diluting the influence of the core group. Japan, while admitting that China's economic muscle would qualify it for the G8, thinks the group should stand for more than that.

"The G8 countries are defined as the industrialised democracies," Japanese government spokesman Kazuo Kodama told reporters at the summit. "Now China has its own political system, but would you call China a democracy?

"The G8 has an important role to take a lead on the global economy. The G20 has been doing a lot of good things, but the fact of the matter is that a still important role has been played by the G8 and G7," he said.

Tokyo, which was cool towards the addition of Russia when the G7 became the G8, fears a dilution of the G8's ability to make decisions if too many voices are round the table.

"Could a Group of 20 have a meaningful discussion in 60 minutes?" asked Kodama, referring to Wednesday's working lunch for the leaders.

And even at eight, consensus was hard to find. Even though odd-man-out Russia signed up to the G8's climate plan -- which China and India oppose -- President Dmitry Medvedev's delegation later distanced itself from the deal.

AFP/Expatica

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