7/4/08

G-8 Soon To Become G-13 - Will G-8 expand to include China, India and Mexico?

. 7/4/08

Way back in 1975, G-8 list had United States, Britain, France, West Germany, Italy and Japan. Canada came on board the following year. Russia formally joined in 1997. It's time to add a few more to keep pace with changing power structure



The Group of Eight nations, holding their annual summit in Japan starting Monday, have always been a club for the world's biggest and brightest economies. Now a growing chorus is saying it's time the clubhouse doors swing open to some newcomers. Outsider China has eclipsed more than half the club's members in economic size and the gross domestic product in Brazil is larger than Russia's.

''When do they move from the G-8 to the G-13?'' asked Lael Brainard of the Brookings Institution, a Washington-based think tank. ''None of these problems can be solved without the participation of countries like China, India, Mexico, Brazil and South Africa.'' Indeed, the G-8's grip on the world economy isn't what it used to be.

The U.S., Japan, Germany, Britain, France, Italy, Canada and Russia accounted for 58 percent of the world economy at current prices in 2007, International Monetary Fund figures show —down from 65 percent in 1997.

As the G-8 members have moved well past their glorious high-growth periods in the decades after World War II, other nations have jumped to the fore as economies to be reckoned with.

Chief among them is China. It's US$3.4 trillion economy is fourth-largest in the world, nipping at the heels of No. 3 Germany. Brazil has the 10th-largest economy, just behind Canada but ahead of Russia. After Russia awaits fast-growing India.

It's not only raw economics. The five nations mentioned by Brainard include serious military powers and the two with the world's largest populations, China and India. In the global warming debate, China is vying with the United States as the world's top emitter of greenhouse gases.

Global power structure altered
''The world has changed dramatically,'' said Robert Hormats, vice chairman at Goldman Sachs (International), who helped U.S. Presidents Ford, Carter and Reagan prepare for economic summits. ''The new global power structure is not what it was.'' It wouldn't be the first time the G-8 has changed its membership.

The group held its initial summit in France in 1975 with six members: the United States, Britain, France, West Germany, Italy and the then-economic upstart in the world, Japan. Canada came on board the following year. Russia formally joined in 1997.

In recent years, as G-8 countries have struggled to address the concerns of the rest of the world, such as poverty in Africa, the list of summit participants has ballooned, though the core nations still hold exclusive meetings.

A total of 22 heads of government — the eight members, seven from Africa, and several from other leading economies — will be at the summit in Toyako in northern Japan, and Japanese officials say it's the largest ever. Members themselves are split over whether they need to formally open the group to new entrants.

French President Nicolas Sarkozy has been outspokenly in favor, and British Prime Minister Gordon Brown also supports expansion. ''I think it is imprudent to invite a country like China, a country like India, a country like Brazil, a country like South Africa, a country like Mexico, just for the lunch on the third day,'' Sarkozy told the French-Japan Club in November. ''It is in our interest to put them at the negotiating table, to treat them like partners and to put them face to face with their obligations.''

Others are not so sure. Host Japan, which has long basked in the honor of being the G-8's only Asian member, has repeatedly shrugged off suggestions of expansion in the weeks leading up to the summit.

''Bringing together the heads of state of, say, 40 countries for two days of talks ends up constraining everyone's opportunity to speak,'' said Masaharu Kohno, the deputy foreign minister. Then there's the question of democracy.

John Kirton, director of the G-8 research group at the University of Toronto, argues the summit's founding principles included promotion of open democracy, and he said the group had played key roles in democratic transitions over the years, including Spain in the mid 1970s and the Soviet Union in the 1990s. By that criteria, China does not meet requirements for membership, he has written.

In any case, the outreach program and the inclusion of a representative of the 27-member European Union in the talks has vastly increased the G-8's relevance and reach, he said. Instead of expanding membership, the group should reform by building up its institutions.

''The G-8 on membership alone is a very large and powerful thing already,'' he said. ''I think it's wrong to say the G-8 has too few members, that it hasn't expanded fast enough, that it's losing relevant capability in the world.''
Source: AP





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