G-7 formulates double-barrel agenda - GulfToday

G-7 formulates double-barrel agenda


President Joe Biden attends a working lunch with other G7 leaders to discuss shaping the global economy in Elmau, Germany. AP

The G-7— a group of the most industrialised and democratic countries, comprising the United States, the United Kingdom, Canada, Germany, Japan and the European Union (EU) — meeting at the Yoga Pavilion in Schloss Elmau in Kuren in southern Germany on Sunday, has formulated a double-barrel agenda, an economic one indirectly countering China’s multi-trillion dollar Belt and Road Initiative (BRI), and the political one targeting Russia over the Russia-Ukraine war.

The economic package involves helping built global infrastructure, and American President Joe Biden has promised $200 billion in public and private spending, and the other members of G-7 are expected to make similar commitments. It has however been clarified that the aim is not match every dollar that China spends on its own version of developing global infrastructure spanning over 100 countries, a 21st century version of the old Silk Route which served as the artery of global trade in the pre-modern period.

The Western powers seem to sense that it is more important to counter China’s growing clout in the global economy because Russia has never been a great economic power even at the height of the Cold War of the 1950s through 1970s.

The Russian or the Soviet Union influence was military and ideological. China, on the other hand, is challenging the Western economic influence as a competing market economy. The Chinese version of the market is described by the Chinese leaders as “socialism with Chinese characteristics”. The market success of China in the global economy is a serious challenge to the capitalist, democratic West.

The G-7 plan to unfold a global economic initiative has been in the works for a year now. It has been called “Partnership for Global Infrastructure Investment” in place of the earlier “Build Back Better World”.

The plan centres around global health, gender equity and digital infrastructure. Many of the promises made by the rich countries to help build the global economy are viewed with much scepticism because the rich countries have not helped in reducing the debt of the poor countries, and they have not done enough on the climate change front.

During the Covid-19 pandemic, the rich countries have even refused to share the Covid vaccines with the poor countries. It is also the case that China’s BRI has run into trouble and China has not been able to push it with the speed and efficiency it wanted to.

Two of the countries, which were informally party of BRI, Sri Lanka and Pakistan, are in deep economic crisis and they have turned to the West-dominated International Monetary Fund (IMF), and the two countries are in deep debt with China.

China has been involved in debt restructuring with these two. The G-7 countries are trying desperately to keep many more countries in their own camp. That is why, at every G-7 summit, there are the guest countries. This time round, India, South Africa, Indonesia, and Senegal are the guest countries at the summit.

Interestingly, both India and South Africa are also part of another formation, BRICS (Brazil, Russia, India, China and South Africa), and which had attended a BRICS virtual summit late last week, pose a challenge to the G-7. The rich, industrialised and democratic countries want to keep the four guest countries, which are all working democracies, in their camp. And India and South Africa are sure to make their own demands on G-7.

It only goes to show that neither America nor China can help to rebuild the global economy. It is beyond their capability. And if there are too many poor countries, neither America nor China can hope to remain the rich and expanding economies that they are now, each in its own way.

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