3 July 2005
Towards
the inclusion of
Diplomatic sources say that the Group of Eight (G 8) industrialized
nations may invite China and
India to join the elite club when its 31st summit meeting is held in Scotland this week or, at least, will agree on doing
so in the next summit in Russia in 2006.
The G8 took root
in 1975, when French President Valery Giscard d’Estaing invited the
leaders of the United
States, Britain, Germany, Italy, and Japan
to hold a summit in Rambouillet,
near Paris, to discuss economic and financial
questions in the world. Canada became
a member in 1976, turning the then G6 into
G7, and with Russia being formally
included in 2002, the G7 was renamed G8. The European Community
or its successor the European Union (EU) has also been part of the club since 1977.
When Russia was
included in the club, some analysts questioned
the move, asking why Russia
and not China? Others wondered if the move only stemmed
from a political consideration, given Russia’s less economic significance
in the world than China’s. They argued that
Washington and its allies brought Russia in to contain any desire
by Moscow to backslide towards cantankerous militarism that might threaten the West.
In
recent years, there have been several calls to expand the club so it
would become more powerful for binding agreements
on global standards concerning good
governance, free trade, human rights, working
conditions, or environmental matters.
One was Belgian Prime Minister Guy Verhofstadt’s initiative in 2001 to bring in representatives of regional economic groups other than EU. The proposal led
to nothing but a move by
French President Jacques Chirac to invite leaders of several developing countries to
have informal dialogues with
G8 leaders at the 29th
summit meeting, held in
Evian, France, in 2003.
The first to call for the inclusion of China and India in the G8 club, however, was Italian
Prime Minister Silvio Berlusconi, who,
during last year’s G8 summit in Sea Island, Georgia, was quoted as saying:
“It does not make much sense
for us to talk about the economy
of the future without [these] two countries that are protagonists on the world stage”. After this statement,
the leaders of Russia, Britain, France, and Germany followed suit, leading some observers
to believe that the European leaders’ enthusiasm to bring in the two Asian
giants, and probably Brazil, was aimed at
balancing the overwhelming presence of the United States.
Statements supporting the expansion of the G8 to G10 or
G11 have also been viewed
by some as a bold diplomatic
manoeuvre by the US and EU
to neutralize the growing clout of the G20, a bloc of developing
nations led by China, India,
and Brazil which are also an integral part of the Group of 77
- the largest single grouping at the
United Nations. By joining the G8, the three
countries would be forced to leave the G20 and G77 and the two
groups would lose considerable influence.
However, one must not forget that offering membership
to China and India is dictated by their current and
potential roles in the world economy and international arena. As recently expressed by Brazilian Foreign Minister Celso Amorim, the G8, by inviting the rising
economic powers to join the ranks
of the club, will do a favour to itself, not to them. The argument is valid as many
issues of concerns cannot be dealt with
without the participation of
these developing powers. Take, for example, the current
and projected rise in oil prices,
which is mainly attributed to the growing consumption
of energy in China and India. Another issue is the group’s
concern over China’s policy of keeping the yuan artificially low and consequently
giving its exports an advantage.
It goes without
saying that the two Asian
giants, in some respects,
are more important to the global economy
than some of the G8 current members such as Canada, Italy, Russia, and even France.
With a growth of 9-10 percent a year over the
past two decades, China has been growing faster than any
major economy. It is now the
world’s fourth largest trading nation, second largest importer of petroleum, third largest car market, and second attracter of direct foreign investment after the US. It produces
20 times more steel than the EU, consumes about 40
percent of the world’s cement, and possesses
more foreign exchange reserves than any
country other than Japan – nearly US$ 610 billion in
2004 compared to only $36
billion, $71 billion, and $61.5 billion in the case of Canada, France, and Italy respectively. By 2010,
China is expected to become the world’s
third largest economy, surpassing Germany.
India, on the other
hand, has been on the rise
for the last 14 years. Its economy has been expanding at 6.5-8 percent annually, making it one of the fastest
growing in the world. The growth momentum
has contributed to a significant
reduction in poverty rates.
India is now a self-sufficient nation in food, one of the leading countries in the field of satellites and their launch vehicle
space, and the world’s largest
exporter of software. It also
has one of the world’s largest pools of highly trained technical manpower. In terms of external debt, India is
in a better position than
Canada, Italy, and Russia. With $140 billion in 2005,
it possesses more foreign exchange reserves than these
three countries and France.
With the expansion of the UN Security Council virtually frozen, India’s membership in the G8 could make
up for its dream to win a permanent seat in the council, especially
that the G8 is now the
international arena where
all political, economic, and security questions are decided.
Some Indian analysts
have already urged New
Delhi to prepare for joining
the club of rich nations and get used
to distancing itself from the fellow
developing countries. According
to one, India needs to do
more to lessen its poverty so it
would not look “like a crow
in the company of swans at the
expanded G8 summit”.
Dr.
Abdulla Al-Madani
*Academic researcher and lecturer in Asian affairs
E-mail: elmadani@batelco.com.bh