– WAG the Dog

G8 summit exposes need to get other countries involved
By DAVID CRANE

WITH THE G8 LEADERS winding up yet another costly summit, this time in St. Petersburg, Russia, it is worth asking how much value this annual extravaganza delivers.

The reality is that on most of the issues the G8 leaders want to deal with, other players are needed if solutions are to be found. Although the G8 countries — United States, Japan, Germany, France, Britain, Italy, Canada and Russia — are important, they cannot by themselves deal with most of the challenges facing the world today, from climate change and energy shortages to nuclear proliferation or the threat of a pandemic.

Other countries, such as China, India, Brazil, Mexico and South Africa must be involved.

Leaders from these other countries are invited to join G8 discussions on some issues, but they are peripheral participants and clearly not at the table of G8 leaders or central to decision making.

This represents an enormous gap in our ability to set global priorities and deal with global problems.

As former World Bank vice-president Johannes Linn told a recent Washington symposium, the G8 "has set itself up as a quasi-steering group for the world but it cannot effectively and cannot legitimately deal with many of the key issues," adding that "five years from now I cannot possibly see how a G8 would still be relevant."

In the years ahead, managing globalization in all its dimensions will be the world’s toughest challenge, so we need some way to guide global development.

We will have a larger population — about nine billion people compared to about 6.5 billion now.

We will have much greater demands for energy and other natural resources, with a global economy more than four times bigger than it is today and far greater pressures on the environment, from climate change to clean air and water.

When the "G" group was started in 1975 as the G6 (United States, Japan, Germany, France, Britain and Italy) it was faced with the Cold War challenge of the Soviet Union and presented itself as an alliance of democracies. (Canada was admitted in 1976 and Russia as a full member in 1997.)

The rise of countries such as China, India, Brazil and Mexico as major economic players was not anticipated. Even South Korea was at a much less developed stage of economic accomplishment.

Today, the world is much different and it will be even more different in the years ahead.

China could be the world’s largest economy by 2050 and already ranks fourth, behind the U.S., Japan and Germany. India is coming on strong.

At the same time, the U.S. has been weakened by its large and growing debt to the rest of the world while Europe, Russia and Japan face declining populations.

Various suggestions have been made on how to move beyond the G8 as a body to help guide and manage the planet we all share.

British Prime Minister Tony Blair has proposed the G8 become the G13 by adding China, India, Mexico, Brazil and South Africa.

Another suggestion, one heavily promoted by former prime minister Paul Martin, is to create what has become known as an L20 — a summit of leaders from the same countries that already belong to the G20 of finance ministers.

The G20 was established in 1999, in the aftermath of the Asian financial crisis, to advance global economic stability and growth.

Martin, then Canada’s finance minister, was its first chair. In addition to the G8 countries it includes Australia (the current chair), Argentina, Brazil, China, India, Indonesia, Mexico, Saudi Arabia, South Africa, South Korea, Turkey and the European Union presidency.

Johannes Linn, now at the Brookings Institution, says an L20 would represent 90 per cent of the world economy, about two-thirds of the world population and capture almost all the issues and major players that matter.

Angel Gurria, the new OECD secretary general and former finance and foreign minister of Mexico, is a strong supporter of the G20 and an L20.

"The idea is valid. It has potential. It is needed. It is worth pursuing," Gurria told an Ottawa conference.

One of the opportunities for each G8 chair is to set the agenda for the leaders’ summit he or she hosts.

Canada next gets to host the G8 in 2010.

In preparation for that summit, we should already be starting to study what will replace the G8.

In the interests of a better-managed global society that is prosperous, safe, healthy and sustainable, a new approach is needed.

David Crane is a Canadian economics writer. ( dcrane@herald.ca )