G7 SUMMIT

Source: CNN

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Context: The Group of Seven (G7) countries will meet for the Leaders’ Summit in Italy’s Apulia region between June 13 and 15, with the Mediterranean nation assuming the group’s presidency earlier this year.

Details

G7 Summit 2024

• Prime Minister Narendra Modi will attend the summit, with India having been invited as an Outreach Country.

Agenda for 2024

• Defending the “rules-based international system” amid Russia’s aggression towards Ukraine,
• Addressing the Middle East conflict
• Strengthening partnerships with developing nations, especially in Africa.
• Key priorities include migration, climate change, food security, and the implications of artificial intelligence (AI) for humanity.
• Aims to coordinate economic policies to stabilise the global economy amidst concerns over inflation and trade tensions.
• The summit will focus on addressing climate change by discussing strategies to reduce carbon emissions and promote sustainable energy sources. With climate records tumbling recently, collective action is key to addressing such problems.
• In light of the lessons learned from the Covid-19 pandemic, the G7 will prioritise global health initiatives, including pandemic preparedness and vaccine distribution.
• The G7 will explore the regulation of emerging technologies, data privacy, and cybersecurity to ensure they benefit global development.

What could G7 leaders do about the wars in Ukraine and Gaza?

• Between them, the G7 nations have already imposed on Russia the biggest package of sanctions ever imposed on a large economy.
• They have blocked the country from international commerce and the global financial system.
• G7 and EU nations have also frozen about $325bn (£254bn) of Russian financial assets which were held in their territories, such as the foreign currency reserves of Russia's central bank.
• The G7 nations are now working on a scheme to take the interest those assets have earned and pass it to Ukraine in the form of a loan. This could amount to $50bn.
• Recently, G7 leaders all backed the plan put forward by US President Joe Biden to end the war in Gaza.
• He has proposed an immediate ceasefire by Israel and Hamas, the release of all hostages, an increase in aid for Gaza and a peace deal which guarantees Israel's security and the safety of Gazan residents.

How could the G7 work with developing nations?

• The relationship with developing nations and emerging economies will be central" to the G7 summit, and that it "will work to build a co-operation model based on mutually beneficial partnerships".
• It has invited leaders from 12 developing countries in Africa, South America and the Indo-Pacific region.
• Under the the Mattei Plan, Italy will give grants and loans worth 5.5bn euros (£4.6bn) to several African countries, to help develop their economies.
• The scheme would also position Italy as an energy hub, building gas and hydrogen pipelines between Africa and Europe.

How could the G7 tackle economic security and AI risks?

• As the G7's president in 2023, Japan pushed for the group to draw up a plan for international economic security.
• The G7 adopted an anti-coercion pact, designed to stop countries such as China and Russia using their economic strength to impose their will on others.
• In December 2023, Italy pulled out of the Belt and Road Initiative - a scheme to expand China's ports and transport routes worldwide to boost trade.
• The US has called the initiative "debt-trap diplomacy" on China's part.
• The safety of AI was raised at the 2023 summit in Japan and resulted in the Hiroshima AI Process, intended to promote "safe, secure, and trustworthy AI worldwide".
• The G7 summit may look at drawing up further international regulations for AI safety, building on the AI Act adopted by the EU and the US president's executive order on AI.

Past decisions have had global effects and its relevance today

• Its relevance has been questioned in recent years as the combined share of its members in global GDP has fallen.
• An analysis from the think tank Bruegel (‘The G7 is dead, long live the G7’) said it declined from roughly 50% in the 1970s to around 30% in 2018. The economic growth of China, India and other emerging economies has led to calls for a more representative global governance structure.
• In comparison, the G20, which was established in response to the 2008 financial crisis, is seen as a more inclusive forum.
• The Bruegel analysis argued that the G20’s creation proved the G7’s inability to handle-modern day crises. But due to its size, the G20 was “too big and heterogeneous to make decisions when not mired in deep crisis”.
• There are also concerns about the G7’s ability to achieve cooperation within the group. Example: Then US President Donald Trump was often at odds with other G7 leaders and at the 2019 summit, he skipped a meeting on climate issues

Some of its past decisions have had global effects

• The G7 cannot pass laws. However, some of its past decisions have had global effects.
• For example, the G7 played a crucial role in setting up a global fund to fight malaria and Aids in 2002.
• Ahead of the 2021 G7 summit in the UK, the group's finance ministers agreed to make multinational companies pay more tax.

About G7

Evolution

• Over the years, the G7 has evolved from an economic forum to a platform which aims to address a range of global challenges.
• The G7 originated from a 1973 meeting of finance ministers and central bank governors in Paris, France.
• This meeting was convened in response to major economic challenges of at time – an oil crisis, rising inflation and collapse of the Bretton Woods system. Under this, the value of the US dollar was fixed against gold.
• In turn, other global currencies pegged their values to the dollar. But over time, the dollar was seen to have been overvalued against the fixed rate. Therefore, a new mechanism had to be devised for exchange rates and this required global cooperation.
• Thus, the idea of a forum was born, where major industrialised democracies could coordinate economic policies to address common challenges.

Members and participants

• The G7 (Group of Seven) is an organisation of the world's seven largest so-called "advanced" economies, which dominate global trade and the international financial system.
• They are Canada, France, Germany, Italy, Japan, the UK and the United States.
• The first G7 summit was held in 1975 in Rambouillet, France, bringing together the leaders of France, Germany, the United Kingdom, the United States, Italy and Japan. Canada joined the next year.
• Since 1977, representatives of the European Economic Community, now the European Union, have also participated. The EU is not a member of the G7, but attends the annual summits.
• Russia’s inclusion in 1998 expanded the group to the G8, but its membership was suspended in 2014 following its annexation of Crimea.

Administrative structure

• While it lacks a permanent administrative structure, the G7 rotates its presidency annually and the presidency serves as a temporary secretariat.
• Throughout the year, G7 ministers and officials hold meetings, form agreements and publish joint statements on global events.
• Concluding with a communiqué outlining political commitments, the annual summit influences global governance, agenda-setting and decision-making processes.

Way forward

Experts proposed a reconfigured G7+, which would include a common euro-zone representative and make space for China, India, and Brazil, thereby better reflecting the current global economic landscape in terms of both GDP and population.

Sources:

Indian Express and BBC

PRACTICE QUESTION Q. Critically analyze the relevance of G7 with reference to present geopolitics. 150 words