G7 Summit

Context:

Prime Minister’s participation in 47th G7 Summit

The 47th G7 summit is currently taking place for 11–13 June 2021 in Cornwall in the United Kingdom (virtual format).
The participants will include the leaders of the seven G7 member states as well as representatives of the European Union.
Theme for the Summit is ‘Build Back Better’
UK has outlined four priority areas for its Presidency these are:
- Leading the global recovery from coronavirus while strengthening resilience against future pandemics.
- Promoting future prosperity by championing free and fair trade.
- Tackling climate change and preserving the planet’s biodiversity
- Championing shared values and open societies.
International pressure has also been built over the G7 countries to contribute funds towards climate change and the provision of surplus Covid-19 vaccines for economically weaker countries. This shall also be a cause of concern for the 7 countries as they themselves have faced severe economic losses during the pandemic period
Discussion over raising funds for climate finance is another key issue to be taken care of during the 47th G7 Summit
The Prime Minister of the United Kingdom, Boris Johnson, has invited leaders from India, South Korea and Australia.

What’s in it for India?

Tackling China: With an assertive China looming, the US is calling all like-minded countries to partner in dealing with Beijing. If US and UK want to take the leap forward and constitute a global democratic alliance of 10-11 countries, it will be an important signal.
Vaccine Shortage: As India faces a massive shortage of vaccines, Delhi will be watching the allocation announced by the US President very carefully. Recently, the US had said that it will distribute vaccines to India as part of it’s “strategy for global vaccine sharing”
Russia: On Washington’s rapprochement with Moscow, New Delhi will be extremely relieved as the US can then focus on China. This will relieve some tension that are built into India-Russia relationship due to US rivalry with Russia.

The Group of Seven (G7) is an inter-governmental political forum
It consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
The heads of government of the member states, as well as the representatives of the European Union, meet at the annual G7 Summit.
As of 2018, the G7 represents 58% of the global net wealth ($317 trillion), more than 46% of the global gross domestic product (GDP) based on nominal values, and more than 32% of the global GDP based on purchasing power parity.
The seven countries involved are also the largest IMF-advanced economies in the world.
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.

The concept of a forum for the world’s major industrialized countries emerged before the 1973 oil crisis. On March 1973, the U.S. Secretary of the Treasury convened an informal gathering of finance ministers from Germany, and the United Kingdom.
In mid-1973, at the World Bank-IMF meetings, Shultz proposed the addition of Japan to the original four nations, who agreed.
The informal gathering of senior financial officials from the United States, the United Kingdom, Germany, Japan, and France became known as the “Group of Five”
In 1975, a summit hosted by France brought together representatives of six governments: France, Germany, Italy, Japan, the United Kingdom, and the United States.
In 1976, with Wilson out as prime minister of Britain, Schmidt and Gerald Ford felt an English speaker with more experience was needed, so Pierre Trudeau, the Prime Minister of Canada, the next largest advanced economy after the first six, was invited to join the group and the group became the Group of Seven (G7).
Since first invited by the United Kingdom in 1977, the European Union has been represented by the president of the European Commission and the leader of the country that holds the presidency of the Council of the European Union; the Council President now also regularly attends.

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.

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.

There are a number of disagreements in the Group of 7 internally, e.g. clash of the USA with other members over taxes on imports and action on climate change.
It is also facing a challenge from fast-growing emerging economies like India and Brazil are not members of the G7. However, In 1999, G20 was formed to bring more countries on board to address global economic concerns. You can know in detail about the G20 Summits in the link provided here.
G7 The organization has also been criticized for not reflecting the current state of global politics or economics.

Source: PIB

Mains Question:

Discuss the relevance of G7 countries today. What are the reforms necessary to make the grouping more effective?

(Answers Comment below)