All nations comprising the seven richest, the less richer twenty and the developing ones, must pull together to counter the issues that face the world as a whole, such as terrorism, climate change and the debt trap.
The Group of Seven composed of the world’s richest countries - Britain, Canada, France, Germany, Italy, Japan and the United States, was structured in the aftermath of the oil crisis in 1974. Representing countries controlling global financial resources, the G-7 was enlarged by co-opting the Russian Federation in 1994 and was renamed as the G-8.
Following Russia’s occupation of Crimea in 2014, its membership was suspended and the group reverted to its original seven members. G-7 was working smoothly till the time U.S President Donald Trump followed a confrontationalist approach with other members at the summit held in Charlevoix, Québec on June 8 and 9 this year. As the presidency of the G-7 moved to the host country, the Canadian Prime Minister Justin Trudeau, in his welcoming note, stated: “Canada is proud to host the 2018 G7 Summit in Charlevoix. This vibrant region captures everything that our country is about – from bilingualism, to cultural diversity, to stunning scenery in every season. I look forward to welcoming my counterparts this year in beautiful Charlevoix. I’m sure they will fall in love with the region, just as Canadians have done for generations”.
The U.S President Donald Trump called for the re-admission of Russian Federation in the fold of G-7 but President Vladimir Putin gave a cold shoulder to the American suggestion. The Charlevoix summit will be known for one major event: the isolation of the United States as other members of the G-7 refused to support the American trade policy and the unpleasant behaviour of the U.S. President in which he called the Canadian President “"meek and mild" and "dishonest and weak." The imposition of tariffs and other trade restrictions by the United States on Canada and other G-7 members also became a source of discord during the deliberations at the G-7 summit.
The Group of Seven is more than forty years old and, except from 1994 till 2014, when the Russian Federation was a co-opted member of G-7 (then called G-8) the world’s seven richest countries met every year to discuss global economic, political and security issues and how to retain the edge of Western democracies in world affairs. From the cold war to the post-cold war, the issue of terrorism dominated the proceedings of G-7 summits. During 2018, the major themes of G-7 summits were: investing in growth that works for everyone; preparing for jobs for the future; advancing gender equality and women’s empowerment; working together on climate change, oceans and clean energy; building a more peaceful and secure world, etc.
The G-7 countries possess 62% of the global wealth which comes to 280 trillion dollars and 46% of the world GDP. Yet the richest countries of the world have been unable to help resolve 10 major global issues: poverty, underdevelopment, illiteracy, malnutrition, environmental threats emanating from global warming and climate change, terrorism, drug trafficking, nuclear proliferation, armed conflicts and displacement of people. When the G-7 was established more than 40 years ago, threats of environmental pollution, global warming, climate change and melting of glaciers were not that serious. Now, a major challenge faced by the world is depletion of water and energy resources. Unfortunately, the United States, which is still the world’s largest economy, is not mindful of seriously coping with environmental threats, particularly controlling emission of gases from its factories and industries.
In order to broaden the response of the world to multiple threats to human survival, another organization called the G-20 was formed comprising the richest countries of the world and emerging economies. The idea was to follow an integrated approach backed by developed and developing countries on dealing with issues which are critical and dangerous. Composed of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Republic of Korea, Russia, Saudi Arabia, Turkey, South Africa, UK, U.S. and the European Union, the G-20 tries to strive for dealing with issues which are primarily located in the developing world but their solutions are both in the First and the Third World countries.
Ten major identified issues which confront the Third World cannot be dealt by the G-20 unless a twopronged approach is not pursued. First, structural reforms should be introduced in the developing world in terms of good governance, rule of rule, justice system and sustainable development. Corruption and nepotism also must be taken up as they are responsible for derailing the process of social and human development in the Third World and they must be eradicated. The First World countries representing the G-7 need to realize that the fundamental challenges faced by the developing and least developing countries is the debt trap. There are numerous Third World countries facing growing debt issues as around half of their budget is used to pay back loans. Pakistan is a vivid example
of the debt trap with 91 billion dollars in external and another 90 billion dollar in internal debt. Together, the two consume around 35 per cent of Pakistan’s budget.
The International Monetary Fund (IMF), the World Bank (WB) and the Asian Development Bank (ADB), which are the three major multilateral lending agencies, are primarily controlled by the G-7 countries. Since the mid-1970s when the G-7 was established till now, no concrete steps have been taken by the richest countries to provide a bailout package to the worst sufferers of foreign debt. The demand for a New International Economic Order (NIEO) which was the essence of the North-South Dialogue that began in the early 70s failed to address demands of the countries of the South like better prices for the export of raw material resources; transfer of technology, financial resources and easing of the payment of loans from the IMF, WB and ADB.
The real challenge for the G-7 is the unrealistic and hostile attitude of President Donald Trump on matters of trade, environment and immigration. It is not with the G-7 that Trump is in conflict; he has also imposed tariffs and other trade restrictions on imports from China. The split in the G-7 as a sequel to the policies of the Trump administration will not only weaken the Western alliance but will give an impetus to BRICS (Brazil, Russia, India, China and South Africa), a loose alliance of likeminded countries who want to transform the world from unipolar to multipolar. So far, the West has kept its edge on the global economy, information and technology but erosion will occur if the G-7 is unable to maintain unity. The sheer responsibility of causing a rift in G-7 will rest with the United States because of its imprudent and unrealistic policies of the Trump administration on issues which are critical in nature such as trade and economic cooperation, the environment and dealing with the developing world.
Unless the G-7 is able to address issues which are causing serious challenges to the world, primarily climate change and global warming, the West will also not be able to maintain its edge in global economy, military and technology. In essence, the G-7 and the G-20, along with the D-8 (Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey), must work together to eradicate poverty and social backwardness and to achieve the millennium development goals. Certainly, challenges of the 21st century cannot be just dealt by the richest countries of the world but require collective and coordinated efforts of all members of the United Nations.
The writer is Meritorious Professor of International Relations at the University of Karachi.