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Whither G8?
It would seem that old imperialistic groupings do not fade away: they simply reinvent themselves. The Group of Eight (G8 – formerly the G6) was founded by France in 1975, for the governments of six major economies, in the wake of the 1973 oil “crisis”. The price of oil might have risen with the OPEC takeover of production, but that just meant somebody had to intermediate the new massive and surging global capital flows. The US, UK, France, Japan, Germany and Italy were that “somebody” joined the next year (1976) by Canada. G7 was the rich club man’s club that decided they were going to manage the global economy.
Russia got a “squeeze- in” in 1998 for political reasons – G8 was born – but by then there were signs that “managing” the world economy was not going to be so easy. For one, their share of the global production was shrinking steadily as the newly “emerging” economies in the Far East, China, Brazil, and India forged steadily ahead. G8 has always been favoured by the Europeans – the EU has a permanent place at the table, even though it does not have a vote.
By 2008, with the financial meltdown in the US and Europe threatening to bring G8 economies down to their knees, President Bush decided that discretion was the better part of valour and convened a summit of the emerging economies along with G8. This was the beginning of G20. G20 economies comprise 85% of global gross national product, 80% of world trade and two-thirds of the world population. Now one could credibly aspire towards global economic coordination.
But even though the leaders agreed to meet annually (and they did) and as early as 2009 announced that the grouping would replace G8 as its main economic council, G8 has continued to meet. They convened at the end of May in France, and one would have thought that they might have wanted to focus on the Euro-zone crisis that had exposed serious flaws in the single currency’s ability to manage the debt crisis of several of its members. Or conversely, on the low economic growth rates and high unemployment rates – especially that of the US at almost 10% – from which they seemed incapable of extricating themselves.
But amazingly, they decided that henceforth, G8 would now engage in the promotion and extension of democracy. They announced that they had taken cognisance of the “Arab Spring” that was sweeping across North Africa and West Asia, and were going to fund the democratisation movement in Tunisia and Egypt alone, to the tune of US$20 billion. That they could commit monies that would come from the World Bank and other regional multilaterals showed that notwithstanding the expansion to G20, power was still with G8. As more democracies emerged, G8 promised that more money would be forthcoming.
A week later, an IMF report declared the external financing needs of oil-importing Middle East and North African states would top $160 billion over the next three years. All for democracy: the oil in the region is purely coincidental.
The G8 summit also backed the extension of the mandate of the European Bank for Reconstruction and Development into North Africa and the Middle East. The bank was created after the Cold War to help former Communist states become market economies.
All of this, of course, is on top of the war for democracy that is being escalated in Libya and winding down in Iraq and Afghanistan by the principals in G8. Russia evidently claims that while it does not support the aerial bombardment of Libya, it agrees that Gaddafi must go. The rest of Africa – especially sub-Saharan Africa, would have been pleased that in their communiqué, the G8 powerhouses had not forgotten them. They declared staunchly that it stood side-by-side with Africa and would intensify its efforts to achieve peace and stability, economic development and growth, regional trade and investment.
No money, but it is the thought that counts, doesn’t it? So we can all rest a bit easier as we go to sleep at night. G8 cares.
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