G7 and its significance for India "EMPOWER IAS"

 

In news:

• The United Kingdom has invited PM Modi to attend the G7 summit that is scheduled to be held in June.

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G7

• The Group of Seven (G7) is a forum of the world's seven largest developed economies whose government leaders meet annually to discuss international economic and monetary issues.
• The G-7 has its roots in an informal meeting of the finance ministers of France, West Germany, the U.S, Great Britain, and Japan (the Group of Five) in the wake of the 1973 oil crisis. That, in turn, inspired the French President to invite the leaders of those countries, and Italy, to Rambouillet in 1975 for further discussions on global oil.
• The next year, Canada was also invited to join the group and the first meeting with all G-7 nations was hosted by the United States which was held in Puerto Rico in 1976.
• Summits are held annually and hosted on a rotation basis by the group's members.
• The 2018 summit was hosted by Canada in Quebec from June 8-9.
• The 45th G7 summit was hosted by France from August 24-26, 2019, in Biarritz in Nouvelle-Aquitaine, France.

 

Members

The G7 members are recognized as the seven wealthiest and most advanced nations in the world. The members are:

• France,
• Germany,
• The United Kingdom,
• Italy,
• The United States of America,
• Canada,
• Japan
• The European Union is sometimes considered an eighth member of the G-7, since it holds all the rights and responsibilities of full members except to chair or host the meeting.

 

Expansion to G-8 (the Group of Eight)

• The G-7 responded as the global economy evolved. In 1991, the Soviet Union pledged to create an economy with freer markets and held its first direct presidential election.
• Following the 1994 G7 meeting in Naples, Russian President held meetings with G-7 member countries, in what became known as the P-8 (Political 8).
• In 1998, after urging from leaders including U.S. President, Russia was added to the G-7 group as a full-time member, creating a formal G-8.
• However, in 2014, Russia was suspended from the group after the annexation of Crimea and tensions in Ukraine.

 

Purpose

• The major purpose of the G-7 is to discuss and deliberate on international economic issues. It sometimes acts in concert to help resolve other global problems, with a special focus on economic issues.
• G7 fills out numerous global top lists:
  • Leading export countries,
  • Largest gold reserves,
  • Largest nuclear energy producers,
  • Top contributors to the UN budget.

 

Evolution of the G-7

• When it started in 1975—with six members, Canada joining a year later—it represented about 70% of the world economy.
• And it was a cosy club for tackling issues such as the response to oil shocks.
• Now it accounts for about 40% of global gdp.
• Since the global financial crisis of 2007-09 it has sometimes been overshadowed by the broader g20.
• The G-7 became the G-8 in 1997 when Russia was invited to join.
• In 2014, Russia was debarred after it took over Crimea.

 

Significance of G7 for India

• India will get more voice, more influence and more power by entering the G7.
• After the UN Security Council (UNSC), this is the most influential grouping.
• If the group is expanded it will collectively address the humongous issues created by the Wuhan virus,
• Diplomatically, a seat at the high table could help India further its security and foreign policy interests, especially at the nuclear club and UN Security Council reform as well as protecting its interests in the Indian Ocean.

 

The G-20

• The G-20 is a larger group of countries, which also includes G7 members.
• The G-20 was formed in 1999, in response to a felt need to bring more countries on board to address global economic concerns.
• Apart from the G-7 countries, the G-20 comprises Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.
• Together, the G-20 countries make up around 80% of the world’s economy.
• As opposed to the G-7, which discusses a broad range of issues, deliberations at the G-20 are confined to those concerning the global economy and financial markets.
• India is slated to host a G-20 summit in 2022.

G7 Vs G20

• Members: The G20  is a larger group of countries, which also includes G7 members.
• Apart from the G7 countries, the G20 comprises Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.
• Share in Global Economy: The G20 countries make up around 80% of the world’s economy. G7’s share in global GDP has fallen to around 40%.
• Range of Issues: As opposed to the G7, the G20 discusses a broad range of issues including those concerning the global economy and financial markets.