What did G-7 talks achieve?

Leaders of industrially developed countries named G-7 (Group of 7) met in Japan in the last week of May for two days to discuss issues of global concern. What attracted observers as most curious about this meeting was the retro nature of the grouping. Considering the many changes that had occurred in geo-politics and the global economy the grouping of countries was enlarged from 7 to 20, the enlargement coming from the inclusion of what was recognised as emerging countries. Accordingly, meetings of leaders of G-20 countries have been held regularly for the past several years. 

Reverting to status quo ante i.e. the old format of G-7 countries came as a surprise to the members of the expanded club. The re-incarnation of G-7 was seen not only as a retrograde step but also as largely irrelevant to the present circumstances. If it appeared unrealistic to address global problems and issues by 7 countries of the world in the recent past, it is even more so now. As time goes by, the world is becoming more inter-linked whether it is for fighting terrorism and trafficking in humans or dealing with economic crisis. The convening of G-7 in the backdrop of growing globalisation of crisis does not augur well for concerted and coordinated efforts for their resolution. It seems politics and not economic and environmental (climate) issues guided the leaders of G-7 excluding the other members of G-20. Antagonised by Russia over its policy in Ukraine and China for its assertive posture in the South China Sea the leaders of the almost defunct G-7 countries thought it expedient to leave them beyond the pale. It goes without saying that the exclusion of two powerful countries from a global meeting is counterproductive and may exacerbate the political and security crises for which they are being blamed. 

The decision to invite six Asian countries under the outreach programme was a good gesture but was not enough to redress the skewed balance of power represented by the group and appeared to many as inadequate to impart the G-7 meeting a 'global' look and reach. It is hoped that the foolhardiness of such biased and myopic attitude has been realized by the leaders of G-7 and due importance will be given to G-20 while discussing global economic, political and environmental issues.

From the proceedings of the meeting it appears that mainly four issues featured in the G-7's packed schedule. It is interesting to note that these issues were not formalised as 'agenda' which is the norm in such meetings and for which meeting of 'sherpas' (technocrats) are held prior to the summit. The four issues discussed at various lengths in the meeting are : (a) the sputtering global economy, (b) China's assertiveness in the South China Sea, (c) the refugee crisis in Europe and (d) the Brexit i.e. Britain's possible withdrawal from the European Union (EU). Looking at the issues it is apparent that some of these are of regional importance while a few have implications for the global economy. 

China's activity to extend its territorial boundary in South China Sea is clearly a geo-political issue of regional importance affecting Japan, Vietnam, Philippines, Taiwan and Indonesia. Of these countries Japan is the most vociferous in its opposition to China's forays into South China Sea as it is seen as a territorial aggression. In their opposition to China the contesting countries have found an ally in America who considers the Chinese move as a challenge to its supremacy in maritime Asia. Japan and America are keen to corral support for a fitting pushback against China's claim to sovereignty over the South China Sea. Excepting calling on China to use restraint G-7 achieved little by way of retaliatory action against China. Perhaps some concessions could be extracted from China had it been invited as a participatory country but that opportunity was foregone by the decision to keep it outside. On the other hand, this ploy served to harden the attitude of China. 

Speaking on the refugee crisis the president of the European Council said that the world needs to act together on the issue gripping Europe and not leave the continent to battle the problem alone. He urged the global community to show solidarity and recognise that this is a global crisis. Last year some 1.3 million refugees, mostly from war-ravaged Syria and Iraq and conflict-ridden Libya and Afghanistan asked for asylum in the countries of the European Union, particularly Germany and Sweden. From the origins of the refugees it is clear that they are the victims of war and civil strife behind which are the policies of America and its allies in Europe. Since the global community is not involved in the genesis of the crisis, it can do very little to mitigate the suffering, far less to resolve it. America and its allies in Europe sowed the wind through their ill-conceived policy of regime change and consequently they are now reaping the whirlwind. No recognition of this 'original sin' was made in the G-7 meeting even obliquely. It is not because of geography that most of the responsibility has been placed on Europe, but because of the short-sighted policy on geo-politics in the Middle-East that the quagmire created has to be resolved by the West through a change in the policy. 

As regards Brexit, it is an issue that directly concerns Britain and the rest of the European Union. It is not a global issue and hardly qualifies to be discussed in a global meeting. America's anxiety over the breakup of a united Europe as a bulwark against Russia might have prompted its inclusion in the G-7 proceedings but the global community at large is not directly concerned with this.

The sputtering global economy, with on-again, off-again gyration towards recovery from the 2008 financial crisis deserved to take centre stage  in the formal talks as the members of G-7 are major players (though incomplete in the absence of China) in the world economy. In spite of the need to have concerted measures in this area, divisions over whether the solution lay in spending more and pursuing easy monetary policy or save through austerity proved difficult to overcome. With Japan and most of EU countries on one side and Germany on the other recovery with ultra-low interest rates and stimulus measures, the Organisation of European Cooperation and Development (OECD) said, 'It is clear that reliance on monetary policy alone has failed to deliver satisfactory growth and inflation'. According to OECD's economic outlook, the longer the global economy remains in the low-growth trap, the more difficult it will be to break the negative feedback loops, revive market forces and boost economies to high-growth path. The lack of unanimity over the course of action to be taken to bring back stability to the sputtering global economy has been the most glaring failure of the G-7 meeting. On the other hand, the Japan-US currency dispute that spilled over into verbal altercation at the meeting showed the deep division that prevails over exchange rate and apprehension about currency war for competitive gain. In short, the prospects for a stable global economy did not gain any traction in the G-7 meeting. This would have been its crowning success if a consensus could be reached among the participating countries.

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