Ram Madhav
June 11, 2021

G7 needs a reset. It must reflect the world of today

In his final year in office, the outspoken United States (US) President Donald Trump found G7 to be an “outdated group of countries”

In his final year in office, the outspoken United States (US) President Donald Trump found G7 to be an “outdated group of countries”. He was forthright in his denunciation, saying “I don’t feel that it represents what’s going on in the world”.

Trump’s comments need not be taken as unwarranted criticism, nor is he alone in holding such views about the four-and-half-decade-old body. Like many other institutions of 20th century vintage, The Group of 7, which was established in 1975-76 with seven countries of the developed West — the US, United Kingdom (UK), Germany, France, Italy, Japan and Canada (which joined in 1976) — as members, is facing a credibility crisis in the post-Covid era.

At the time of their inception, G7 countries were the de facto engines of global economy. Together, they constituted 60% of the global GDP. Although essentially a group of the rich, eying to dominate the markets and economy, G7 tried to camouflage its mission in a hoary language of “a community of values”. Freedom, democracy, human rights, rule of law, world prosperity and sustainable development were touted as those key values.

The global economic landscape has undergone a major transformation in the last four decades. Many developing countries have emerged as strong economies in the new century. Countries such as India, Australia, and South Korea have risen as important powers upholding the key values of G7. Purely on economic terms, countries such as China have also emerged as major powers. In the last few decades, many multilateral and minilateral alliances have been formed. A bigger and more inclusive G-20 is present since 1999. Substantive alliances such as Brics, Tpp, Rcep and Quad have also emerged, dominating the world’s economic and strategic space today.

A new trend of microlateralism, where smaller countries play significant roles in addressing specific challenges with the tacit support of big powers, is also being increasingly witnessed today.

Norway played a pivotal role in clinching the Oslo accords in 1993 to attempt to resolve the vexed Palestine-Israel dispute. Such initiatives are growing in number in the new century. Peace in Lebanon was brokered by the Emir of Qatar, Sheik Hamad bin Khalifa al-Thani in 2008, by bringing together the warring factions and clinching the Doha Agreement. Jordan’s Aqaba Process and New Zealand’s Christchurch Call have become substantive counterterrorism initiatives after 2015. Austria created the First Movers Group in 2020 bringing together Australia, Israel, Greece and Singapore for a discussion on pandemic response. Singapore, Chile and New Zealand got together to sign the Digital Economy Partnership Agreement in June 2020. Finland raised more than $3 billion in November 2020 by hosting the Afghanistan Conference.

It is in this exciting climate of multilateral, minilateral and microlateral activism of various countries that a crucial meeting of the G7 heads of state is taking place at the Cornish coast of South West England this weekend.

The economic heft of G7 has substantially decreased over the decades, and its share in global economy has declined to one-third of the global GDP. If G7 countries continue to pursue the old agenda of markets and profits and try to exploit the advantage of the post-Covid economic boom, their relevance might be seriously jeopardized. Historically, pandemics such as the Spanish Flu, Cholera outbreaks and SARS, and other calamities such as the World Wars had led to huge savings. In the immediate aftermath of these events, high levels of consumption were recorded, leading to sudden surges in market economies. What happened after all those events is likely to happen now. But such booms remained a short-term phenomenon in the past, followed by bad recessions.

The time has come for the G7 to find a new rhythm, vision and purpose for its existence in the emerging post-Covid world order. The countries of G7 need to look beyond the future of their markets, into the domain of the values they claim to stand for.

India, Australia and South Korea have been invited to join in the meeting this year. It has led to the speculation that G7 might rechristen itself as D-10, upholding values like democracy, freedom and human rights. The pandemic has catalysed authoritarian concentration of power in many countries. A false and fictitious debate over authoritarian efficiency versus democratic chaos is being deliberately unleashed. The elephant in the room is China. With its enormous techno-economic muscle, it is unabashedly siding with authoritarian regimes across continents and threatening democracies everywhere.

Will the G7 have the appetite to take on this challenge? Can Germany, Italy and France rise above their market and profit interests to hold the bull by its horns? G7 has had a history of overlooking “values” for the sake of economic and strategic interests in the past when Russia was invited as a member in 1997 converting G7 into G8. But when President Vladimir Putin marched his armies into Crimea in 2014, the group was forced to expel Russia and return to the G7 nomenclature.

All other post-Covid agenda items such as climate protection, healthcare, human-centric development and people-friendly technologies depend on this crucial question of growing democratic deficit and how to address it.

“Democracy is the worst form of government”, Winston Churchill used to quip, adding “except for all the others”. Techno-economic authoritarians versus techno-democracies is the battle ahead. G7 has to be on the right side to be relevant.

(The article was originally published in Hindustan Times on June 11, 2021. Views expressed are personal.)

Published by Ram Madhav

Member, Board of Governors, India Foundation

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