TCS Daily

The G-8: Abolish or Transform It

By Claude Barfield - June 9, 2004 12:00 AM

Sometime in the next day or two I am sure to get calls from reporters at leading newspapers asking me to comment on the prospects and significance of the declarations that will conclude the annual meeting (Tuesday-Thursday) of heads of state for the G-8 countries -- U.S., Japan, Canada, France, Germany, United Kingdom, Italy and Russia. Since the pooh-bahs are convening at Sea Island, Georgia, the number of U.S. newspapers paying attention may be larger than usual -- no doubt economics reporters have lobbied hard for the sun-filled, leisurely assignment by the sea. This year, as in preceding years, economic motherhood will be the order of the day: viz., continued high oil prices threaten the global recovery; macroeconomic imbalances lead to trade imbalances and should be curbed; nations should take all possible steps to increase the rate of economic growth; vigilance against global terrorism is vital to avoid incidents (such as that in Spain) that could trigger economically debilitating global instability... and so on, blah, blah, blah.

Some commentators will lament the lack of "action forcing" commitments (see Jeffrey Sachs' jeremiad regarding world poverty in June 7 Financial Times) and meaningful follow-up on past pronouncements. For many of these people, the G-8 is failing as an agent of "global economic governance." And therein hangs the problem -- they forget that the original G-7 (pre-Russian addition) was never really an agent of "global economic governance" -- rather it started as an informal meeting of the heads of state of the most important economies in the world (even in 1978, this distinction was dubious as the inclusion of Canada and Italy demonstrated). Flanked by a few advisers, these heads of state took the opportunity give a human face to economic diplomacy and to discuss common problems informally behind closed doors. Though a final statement was always part of the action, initially it merely reflected a fairly innocuous common denominator of national sentiments and goals.

Unfortunately, in the years since the first meeting in 1978, the purported role and ambitions of the G-8 have grown more grandiose, the participants in its annual meetings have swelled with many more bureaucratic hangers on, and -- most important -- its membership has lost any claim to real economic (or political or military) importance. It is time to rethink the whole G-8 concept, goals and membership.

I am not alone in arguing for this rethink. For instance, two very able scholars at the Brookings Institution, reflecting upon the fact that the current G-8 meetings "shut out the great majority of the world's population and a significant share of the world's economic power," have recommended a big expansion of its membership to a G-20. In rudimentary form, such an organization of finance ministers already exists, having been called into being by Germany in 1999 to discuss international financial and other economic matters. Today, Canadian PM Paul Martin is agitating to upgrade the G-20 to heads of state meetings (the G-8, plus Argentina, Brazil, China, India, Indonesia, Korea, Mexico, Saudi Arabia, South Africa and Turkey).

While put forward with the best of intentions, the Brookings scholars' proposal is not the way to go. The resulting cacophony of voices would more nearly represent a newly discovered Tower of Babble than a forum for reasoned discourse. Rather than expanding the membership and the substantive ambitions of the leaders' meetings, the better solution is to drastically downsize the membership (and the size of the individual delegations) to make it truly reflect future economic and political power -- and at the same time, go back to less ambitious agendas of the early G-7 years.

Why not, in good realist fashion, rebuild on the basis of current and future potential economic and political power -- why not start with a basic G-3: the United States, the EU and China? As the lone superpower, there can be no quibble about the United States. As for Europe, it is time to "fish or cut bait," not only with regard to the G-8 but also with regard to the United Nations and other international fora. The EU is now composed of 25 nations, and this year will vote on a constitution, moving far along to formalize its status as some kind of nation state. Thus, there is no defensible rationale for mere regional states in the union -- the U.K., Germany, France, Italy, etc -- to appear as separate nations. Just as the United States does not insist on representation for California or New York (though they are larger than most of the current G-8 nations) so too the EU should be represented by the president of the European Commission.

What to do about Japan vis a vis China? For the past three decades, after Japan emerged as an economic power statistically, it has doggedly refused to exercise a scintilla of authority or leadership on any international economic or trade issue. And given its history in World War II, and the continuing strong pacifist strain in its population, it will never step forward to tackle the world's diplomatic or security challenges. China, on the other hand, with all the problems this entails, much be recognized as a coming power in Asia and the world.

Starting with the G-3, without succumbing to the political correctness that seems to underlie the concept of a G-20, one could selectively add some representation to accommodate both the realities of population growth and future regional economic and political power: as a start for suggestions, how about Brazil, South Africa and India. One might also consider some kind of rotating membership for middle-level and rising powers. The point is that in the future it will be much more important for President Bush or his successors to establish a personal relationship with China's Wen Jiabo, South Africa's Mbeki, and Brazil's Lula, than to schmooze with the likes of Chirac, Shroeder, and even Tony Blair.

And finally, please, with the new order, no grandiose "bloviation" (courtesy, H.L. Mencken) in the final declaration about creating a Mideast Democracy out of the whole cloth.

Claude Barfield is Resident Scholar at the American Enterprise Institute.


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