G7

Introduction

• The Group of Seven (G7) is an inter-governmental political forum consisting of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
• Its members are the world’s largest IMF advanced economies and wealthiest liberal democracies
• As of 2020, the collective group accounts for a little over 50% of global net wealth (which is $418 trillion), 32 to 46 percent of global gross domestic product, and about 770 million people or 10 percent of the world’s population
• Since the start of 2022, Germany has taken over the presidency of the G7

Activities and initiatives

• The G7 was founded primarily to facilitate shared macroeconomic initiatives in response to contemporary economic problems; the first gathering was centred around the 1970s energy crisis, and the ensuing global recession
• Beginning in the 1980s, the G7 broadened its areas of concern to include issues of international security, human rights, and global security
  • For example, during this period, the G7 concerned itself with the ongoing Iran-Iraq War and Soviet occupation of Afghanistan
• In the 1990s, it launched a debt-relief program for the 42 heavily indebted poor countries (HIPC)
• At the turn of the 21st century, the G7 began emphasizing engagement with the developing world
  • At the 1999 summit, the group helped launch the G20, a similar forum made up of the G7 and the next 13 largest economies (including the European Union), in order to “promote dialogue between major industrial and emerging market countries”
• Following the global financial crisis of 2007–2008, G7 finance ministers pledged to take “all necessary steps” to stem the crisis
• Presently, The G7 has continued to take a strong stance against Russia’s “destabilising behaviour and malign activities” in Ukraine and elsewhere around the world

G7 and India

• India had been invited by the G7 French Presidency in 2019 to the Biarritz Summit as a “Goodwill Partner” and Prime Minister participated in the Sessions on ‘Climate, Biodiversity and Oceans’ and ‘Digital Transformation’
• In 2021, Indian Prime Minister virtually attended the summit from India where he made a pitch for a coordinated global response against coronavirus disease (Covid-19) and future pandemics with the mantra of “One earth, one health”
  • The prime minister also sought support for the proposal, initiated by India and South Africa, at the World Trade Organization (WTO) for a waiver of patent protections for Covid-19 vaccines and technologies.
  • Also, Indian Prime Minister expressed that India is a natural ally for the G7 countries in defending the shared values from a host of threats stemming from authoritarianism, terrorism and violent extremism, disinformation and economic coercion
  • India also expressed its civilizational commitment to democracy, freedom of thought and liberty
  • Further, India called upon the G7 nations to keep their unfulfilled promise of setting aside $100 billion annually to finance mitigation and transfer of technology to developing countries to meet the challenges posed by climate change

Does G7 need a reset to reflect the world of today?

• 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 with a language of “a community of values”
  • Freedom, democracy, human rights, rule of law, world prosperity and sustainable development were touted as those key values.
• But in recent times, 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
  • Further, in the last few decades, many multilateral and mini-lateral 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
• Assessing the situation from above, 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
• Hence, 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