Shaking Up the G8

Are the member countries of the G8 group still qualified to shape global policy?

June 26, 2002

Are the member countries of the G8 group still qualified to shape global policy?

To avoid the fatal street violence of the 2001 G8 Summit in Genoa, in June 2002 the leaders will gather in the remote Canadian Rocky Mountain village of Kananaskis. The main message seems clear: The leading democracies want to hide from the twin challenges to the global economy.

The first challenge is pesky protesters. Domestic constituency groups have muscled their way into global affairs — and world leaders don’t like it.

The protesters come from a broad variety of backgrounds – including labor unions, environmentalists, animal rights activists and anarchists. Their unifying complaint, however, is powerful: The global economy undermines democracy.

The second challenge comes from grumpy developing countries. After years of hearing sermons about how trade is the key to fighting poverty, now they are angry that the rich countries keep raising barriers to their best exports – from steel to farm products to textile goods.

Good thing they’re not invited to the meeting. Given their increasing frustration with Western double-speak, they would hardly add to the usually celebratory atmosphere.

There is one simple way to address both problems: Invite a broader selection of democracies to the table. If the G8 really wants to act as a board of directors for the world economy, then it should be a collection of the leading democratic countries from the north and south.

In the 25 years of summits, the biggest change was the addition of a vodka-wobbly Boris Yeltsin to part of the Denver G7 meeting back in 1997 – turning the organization into the G8.

Adding a few key developing country democracies would help immensely. And it would go a long way to make the event unassailable to most protest groups.

So here’s one potent formula for a new G8: It should feature the democracies that matter most in governing the global economy.

Some candidates are straightforward enough.

At the present time, cries of unilateralism abound in world affairs. And yet, the G8 has been a useful, if quiet, tool of U.S. foreign policy. And the world has benefited from having the United States in this framework since it helps to keep that country acting alongside others – not apart from them.

Enough of the “four dwarfs” (Germany, France, Italy and the United Kingdom). With the creation of the euro (and the UK’s eventual adoption of it), Europe now acts as one in setting interest rates and negotiating trade agreements.

Having Europe speak with one voice in guiding the IMF, World Bank and other matters of development assistance would be a major contribution. Consolidating Europe into one voice would open up a few seats at the table.

And for those Europeans who would complain that one seat at the table is not enough for all of them, here is a quick hint: If one seat is good enough for the mighty United States, why is it not good enough for Europe?

This country is still the world’s second-largest national economy, among its most productive societies – and a historic leader in development assistance.

A decade of economic stagnation at home has ignited a surprisingly robust and open debate about change in Japan.

And even though that debate has not yet produced any dramatic new policies, the business community has begun to reform itself.

Is Russia – a present member – really qualified? Well, if Russia is democratic enough for NATO, then it belongs in the G8.

Plus, the United States and EU recently said as much, conferring the status of ‘market economy’ on Russia.

That’s a prerequisite to membership in the WTO that Vladimir Putin so badly wants. Putin is no democratic saint.

But he has firmly placed Russia’s future with the west – and raised its status as the premier transition democracy. Also, don’t forget all that oil.

This is the world’s largest democracy. Always remember that. India’s total population is 10% greater than the four preceding countries combined.

A decade after dramatic liberalization, home-grown Indian companies now compete on par with the best of Silicon Valley or the Nordic miracle state. True, nearly a half-billion Indians still live in poverty.

But so long as India continues to face significant barriers to developed country markets, the country’s leadership will continue to avoid painful domestic reforms.

If Russia, why not Brazil? The engine of growth in South America, it has proven itself a leader among developing countries by coming up with innovative approaches to attracting foreign investment through transparent laws, debt restructuring, incentive-based primary education and fighting AIDS. One more thing: Expect no progress in the WTO Doha Development Round – if Brazil is not on board.

This country is the window of hope to the “lost continent.” It has a powerful first-world economic base that makes luxury cars, wines and telecom equipment that compete worldwide.

A decade after the end of apartheid, many have pointed to failings of the country’s new leadership on issues as diverse as AIDS and job creation.

And yet, what is far more extraordinary is that South Africa has walked back from the brink of violence in ways that far smaller ethnically divided countries have not.

One more seat to assign. What about Canada? Nope, they’re out. Canada won’t like being left out. That is one reason that Canadian diplomats have been so eager to establish the G20 as an alternative to today’s G8.

Yet, the G20 – which includes a number of these countries, as well as a few key trading nations such as Australia and Singapore – is too large to be an effective steering committee.

And a country of less than 30 million people cannot stand alongside these big guys. If every country is a “leader,” then no country is a leader.

The value of the G8 has been that countries willing to rise above their parochial interests have used the forum to shape global affairs. And that is precisely why now is the time to reshape that pivotal group.

The last chair at the G8 table out to go out to Turkey. It is the world’s premier Islamic democracy. No one expects the EU to offer Turkey membership any time soon.

So it will not be represented by Europe. Indeed, it would be miraculous if its economy were ever as integrated into Europe as Mexico’s is integrated into the United States. Still, Turkey almost has all the same arguments in favor of belonging as Russia and South Africa.

It has clung to democracy in the face of authoritarian impulses. It has strategic economic assets that should not be dismissed lightly – and it is a model of tolerance in a world of turmoil. Before long, these attributes may propel it into the club as a full member of the G8.

The list of left-behinds is long – and China would be the loudest critic. The Chinese will complain that — as citizens of the world’s largest nation and fastest-growing economy – they will not tolerate being isolated.

Moreover, some people will argue that it has introduced democratic reforms. Yet, as long as the world’s last communist country blocks labor unions from freely associating, it simply does not meet the basic responsibilities to serve on the world’s “board of directors” of leading democratic economies.

Poland, Mexico and Korea can make good cases that, as large members of the OECD, they should belong. Yet, these economies are integrating quickly into regional partnerships already represented in the above group.

The ASEAN nations — including Indonesia, the Philippines and Thailand – all have made noteworthy political and economic reforms. However, none of these nations, as yet, have demonstrated a desire or ability to be leaders for developing nations. When that happens, perhaps we can start talking about a G9.