September
9, 2008
ABSTRACT
In the international relations arena there
is an increasing debate about the possible advantages and disadvantages of expanding
the Group of Eight (G-8). The aim of this article is — after a brief historical
introduction with reference to the G-8 and its role — to try to understand the
pros and cons of G-8 expansion in the light of the recent public debate.
Introduction
The group
of the world's eight most industrialized countries includes Canada, France,
Germany, Italy, Japan, Russia (only since 2006), the UK and the USA. Previously,
Russia was admitted to the meetings of the then G-7 countries only as an
observer. This forum was created in the 1970s and initially it brought together the governments of France, West Germany, Italy, Japan the U.S and the U.K. At that time, the world was partly
trying to recover from the oil shock of 1973 and the following economic
recession spurred by the huge increase in the price of oil. The idea of
creating a group including the most industrialized countries was linked to the fact
that it could be very helpful to cyclically have a forum where to
discuss at the highest level about the international economic situation. It is
important to understand that also today the G-8 is not an organization but a
forum. The participation of Italy to the group was partially opposed in the
1970s by some other countries that were casting doubts about the stability and
the results of the Italian economy.
The
problem that has arisen since the last years is that the membership of the G-8
is not completely matching anymore all the real powerhouses of the world economy.
This means that G-8 countries are without any doubt important economic players,
but that in order to have a sound and complete discussion about the international
economic trends new members should probably be added to the forum. Among them it goes by
itself to mention China, India and Brazil, but others countries like Turkey,
Indonesia, Mexico and South Africa could also be considered. In Paragraph 1 it
will be discussed the advantages of extending the G-8 membership, while in
Paragraph 2 it will be done an evaluation of the disadvantages of such an
extension.
Paragraph 1 — Advantages
As well as for some other international organizations (but I repeat the G-8 is not an
international organization) the actual real risk for the G-8 is to lose
legitimization if it does not increase its membership. Obviously, if G-8 meetings
continue in the future to have a membership only partially covering the most
important economic players the risk of losing legitimization will become a
reality. The world economy is not anymore only driven by the U.S., Europe and Japan.
Asia is — economically speaking — rising powerfully and the balance of power is
moving from the Atlantic Ocean to the Pacific Ocean and the Indian Ocean. The
advantages of an extended G-8 membership could well comply with the reason and
the aim of this kind of forum. Similarly to the G-8, the I.M.F. (the International
Monetary Fund) risks losing importance as well, if it does not restructure its voting structure.
Given the fact that an increased membership is necessary for the G-8, the real
issue is to understand how to reform it, i.e., to understand which country
should be admitted.
This is
the core of the problem. According to some analysts the G-8 should be
transformed into a G-20 adding at least 12 more countries. But others speak
of a G-22 adding 14 new members. Probably, the right way to solve the problem
could be to have a first extension of the membership adding those countries,
like China and India, that already represent a big chunk of the world economy. Then,
after this first extension, others could follow suit in the future when their
economies will have increased their role with reference to the world economic
trends.
Paragraph 2 — Disadvantages
The
clear and obvious disadvantage of an increased membership is the possible
slow motion of the decision-making procedures during the meetings of the new
G-10 (G-20?, G-22?). Increasing the number of actors could block the discussions
or bring about additional frictional topics among member states. For
example, the admittance of Russia in the forum in 2006 created a shift of
the discussed topics from mainly economics themes to geopolitical
considerations given the new assertiveness of Russian internal and external
politics (this shift happened well before the Russian intervention in Georgia).
Another good example of the difficulties created by a broad membership,
although in a different context, is the W.T.O., where since the inception of the
Doha Round in 2001 the process has been blocked by the different positions expressed
by the member states.
Another
disadvantage for a G-8 expansion could be that an enlarged membership would
probably require the transformation of this sort of forum, which is the actual G-8,
into a real organization capable of coordinating meetings with more
delegations, topics and possible political frictions among the involved member
states. The forum would have to be transformed into a real organization with
additional costs, which not all the countries want to sustain.
Conclusion
All
this said, according to the expounded analysis, the advantages of G-8 expansion
well outweighs the disadvantages. Maintaining an economic forum that is not
able anymore to represent the world economy is definitely useless. Similarly, other
international organizations will necessarily change their membership and one of
these is the I.M.F. In other words, with reference to the group of the most
industrialized countries it is worth having a new forum with more actors where
the decision-making process could be slow, but where, at least, the forum is a
living body well representing today’s world.