The Summit of G-7 leaders, the group of the world’s “most industrialised economies”, was held in Germany this week, where India along with Indonesia and a few other countries, was a special invitee. Last week, we told you about the BRICS summit of emerging economies, that was once seen as a complementary and now a potentially competitive grouping to the G-7. What they have in common is that the agenda is driven by the economy.
A bit about the G-7:
1. The Grouping began as the Group of Six in 1975- with a meeting of leaders of US, UK, West Germany, Italy, France and Japan, as a result of the Oil crisis and global currency exchange issues that decided to meet annually.
2. Canada joined in 1976- making it the G-7. The EU leadership is always invited to G-7 meets
3. In the 1990s after the fall of the Soviet Union and reunification of Germany, Russia was added to make it the G-8. However, after Russian wars with Georgia in 2008, and the annexation of Crimea in 2014, the club ousted Russia permanently- and has been united in its sanctions against Russia over Ukraine.
4. India has been a special invitee to the G-7 on several occasions in the past two decades- including 5 consecutive years from 2005-2009 during the global economic crisis. This year PM Modi spoke about climate change, energy transitions and food security.
Criticisms of the G-7:
1. That it is essentially a “First World Elite Club” that hasn’t grown- nor has it revised its membership, given that not all of its members are among the world’s top economies anymore
2. The G-7 countries represent more than 50% of Global GDP and just 10% of the world population, showing how much is concentrated in the hands of a few
3. By cutting out Russia and China, the G-7 ensure the polarisation of the world into the two blocs, even as ties between Russia and China get stronger
4.The fact that G-7 countries are also military partners means that the economic agenda of the grouping often takes a backseat over political issues- in the current scenario- over the Russia-Ukraine war, and the tussle with China
As a result- many of the outcomes of the G-7 held at Germany’s Schloss Elmau resort- where US President Biden, Canadian President Trudeau, French President Macron, Italian PM Draghi, UK PM Johnson and Japanese PM Kishida met over 2 days, had very pointed messaging for both Russia and China.
1. Statement Commitment on Ukraine: G-7 countries underlined their condemnation of what they called “Russia’s illegal and unjustifiable war of aggression against Ukraine” and said they will support Ukraine “for as long as it takes” with financial, humanitarian, military, and diplomatic support. Their combined monetary support this year totals to nearly 3 billion in humanitarian aid and nearly 30 billion in budget aid.
2. Annex on sanctions on Russia: An equally strong commitment to impose costs on Russia
i. coordination on sanctions, especially on the prohibition of transport of oil through sea routes
ii. contracting its central bank’s foreign reserves
iii. reducing its military’s access to funds and components,
iv. and pursuing Russian oligarchs
3. Statement on Global Food Security: G-7 parties remained on target to raise $100 billion and lift 500 million from malnutrition by 2030. Here too the reference to Russia stopping Ukrainian wheat and other grains from being exported- G7 will provide $4.5 bn to help Ukraine produce and export.
4. Partnership for Global Infrastructure and Investment, plan to mobilise $600 billion over the next five years to narrow the global investment gap- in a message to China and concerns over unsustainable debt creations
5. Statements on Climate change and on Just Transition partnerships between the G7 and India, Indonesia, South Africa, Senegal and Vietnam to ensure they are able to keep global warming levels between 1.5 and 2 degrees celcius
6. And finally, a Statement on Resilient democracies, which India also signed on to, committing to ensure free and fair elections, protection of civil society, promoting human rights online and offline, and achieving gender equality. The purpose of this statement was to distinguish the G7- and its special invitees as democracies from authoritarian countries like Russia and China.
Straight from the G-7 summit, their leaders went to Madrid- with the exception of Japan, all G-7 members are also NATO members- and Japan, South Korea, Australia and New Zealand were invited to that summit- as much stronger statements were made about the twin challenges from Russia and from China.
So let’s boil it down to what this means for India- and what are the messages to watch out for globally?
1. India’s tightrope walk between the West and Russia-China has just become more difficult- the G7 statement indicates a point of no-return between the two blocs, even if the much needed Russia-Ukraine ceasefire is worked out.
2. More scrutiny of India’s economic links with Russia- including the import of Russian oil, now hitting about 25% of India’s imports,Coal and Cement, as well as payment mechanisms being explored to subvert western sanctions
3. The US-China rivalry is likely to step up in the Indo-Pacific with the new economic initiatives planned: from Indo-Pacific Economic Forum to the PGII to counter China’s Belt and Road Initiative- Significantly, India joined the IPEF, but Foreign Secretary Vinay Kwatra made a point of saying that India has not signed on to the PGII plan yet.
4. PM Modi’s commitment at the G-7 Resilient Democracies statement will keep the government accountable at upcoming democracy and religious freedom summits in the UK and then the US. Also ahead this year, it will be India’s turn to undergo a Universal Periodic Review at the Human Rights Council, and recent arrests of activists and journalists, as well as the growing communal violence in the country will come under the scanner
5. India’s partnerships with countries like Indonesia, Brazil. South Africa, ASEAN, countries that are still seeking to balance ties with both blocs will get stronger. Just as Indonesian president Jokowi, who is holding the G-20 summit this year travelled to both Kyiv and Moscow, and has invited both Pres Zelensky and Pres Putin to the summit in November, India, as host of next year’s G20 too might seek opportunities to mediate between them.
Already, India’s role as the balancing power in the room is evident: at the BRICS summit last week, India ensured that anti-West language did not enter the text, while at the G-7 outreach, it ensured that statements condemning Russia and China were not part of the documents that India signed. The only question is, how long can India stay on its tightrope, before one or other bloc asks it to pick a side?
1. The G7, Anti-Globalism and the Governance of Globalization edited by Chiara Oldani and Jan Wouters
2. International Summitry and Global Governance: The rise of the G7 and the European Council, 1974-1991 by Emmanuel Mourlon-Druol (Editor), Federico Romero (Editor)
3. The Storm Before the Calm: America's Discord, the Coming Crisis of the 2020s, and the Triumph. George Friedman
4. The End of the World Is Just the Beginning: Author Peter Zeihan maps out a future of reversing globalisation, securing food, energy and their borders themselves
5. The Tragedy of Great Power Politics by John Mearsheimer
6. The New World Disorder and the Indian Imperative by Shashi Tharoor and Samir Saran
7. World Order By Henry Kissinger
8. Dear Barack: The Extraordinary Partnership of Barack Obama and Angela Merkel. By Cludia Clark