Despite widespread belief in a decline of the West and obsolescence of G7-G8, the actual statistics show that G7-8 remains overwhelmingly important, both as a vehicle for mutual cooperation and a guide for the world economy. A G14 or G20 could not provide an adequate substitute for it.
The statistics demonstrate conclusively that the changes in the world economic balance are much smaller than advertised. The basic realities are still the old ones. The group of the industrial democracies of the world – OECD, with G7 as its informal executive committee – has a whopping 77% of global GDP. The G20, or G7 + 13, adds a mere 10% more, claiming 85-90% of global GDP. BRIC (Brazil, Russia, India, China), the group of new economic powers, has only 12% of global GDP.
Clearly, the weight of the emerging powers, whose economic clout is said to be rendering the G7 obsolete, is much less than usually assumed. Ideology, not fact, motivates the assertions that G7 and OECD, in order to stay relevant, must take in new members and turn themselves into North-South dialogue platforms.
Replacing the G7 by a G14 or G20 would bring a host of problems. The G14-20 are forums; it is only G7 that is “group” in the meaningful sense of the word: a collectivity that sticks together regularly enough, in its policies, that its economic weights can be added together and understood as a collective weight for global purposes.
The societies in the G14-20 have fundamental differences of interest, amplified by different ways of life and divergent perspectives. These differences would make a merger of their societies suicidal for many of them; they allow for episodic cooperation, but not for reliable integration or creation of strong joint authority structures. Integration is possible when it is a matter only of overcoming separate raisons d’etat not separate raisons de societe. The differences in raison de societe among the G20 members preclude a deep integration that encompasses them all; and in the absence of integration, their differences of interest continue to get translated into opposing strategic orientations and power politics. That is why their 85-90% total means very little, far less than OECD’s 77% total.
The G7 countries, indeed practically all the OECD countries, have a profound underlying unity. Their socio-economic structures and conditions are so similar that they could be considered almost a single society. Their commonalities of societal interest are potentially overriding of the opposing interests of state; and this potentiality has been largely realized through their joint institutions. This is why the deep European integration, and the more loosely organized but still substantively deep integration of the trans-Atlantic arrangements, has occurred within the OECD space, but not in the global space. Integration is possible in this era within the OECD space, not in the G20 space or the UN space.
OECD has corresponded to the largest group possible at any time with such deep unity. The group keeps growing over the decades, as more countries become homogenous with the original trans-Atlantic core. It has thereby not only not declined, but increased its share of global GDP, even while emerging economies also grow; and has kept its coherence at the same time, making its 77% share a meaningful statistic.
Raising the share still further, from 77% to 90%, would add little new capability; as it would be done by throwing out the coherence, it would subtract far more. This is the one thing that could truly render the G’s obsolete. It would destroy their capability to provide a measure of consistent guidance to the world economy. Out the window would also go the trend of cumulative global security and growth that the G7-OECD leadership has provided over a number of decades. It is easy to deprecate this achievement in the current moment of downturn. Nevertheless it is this achievement that has allowed the rise of the BRIC countries in the first place.
This in no way negates the use of the G14-20. G14 has had value as a G8 outreach, or G8 + 6. G8 has had value as a G7 + 1, with a truly cohesive core. But were this well articulated structure to be dissolved into an undifferentiated G14, it would lose its coherence, and most of its public utility with it. G20 has been used as a venue for raising funds for stimulus at this moment of financial crisis, and as a forum for the major economies of all parts of the world: a negotiating platform between North and South. Specific bargains are needed at this time; a forum is needed. But it is just that, a forum, not more; above all not an an option for replacing G7.
Dr. Ira Louis Straus is coordinator of the American branch, Committee on Eastern Europe and Russia in NATO. This piece first appeared at Atlantic Community.