The end of the G8

Tony Payne - Director of SPERI

In other words, we can see in retrospect that the move from a G7 to a G8 was just a first, hesitant, slow and awkward response to the breakdown of the era of Western-led management of the global economy which began to make itself apparent in the mid-1980s and has then unfolded with ever greater force to the present day.  Russia’s entry into the G club was the product of a tactical manoeuvre when what was called for was a strategic response.  The establishment of a G20 summit at the height of the financial crisis in the autumn of 2008 was that eventual strategic response.  It included, and still includes, Russia and so it is inconceivable now that the G7 will need or want to shift back to its G8 mode.  That phase in the modern history of global governance has passed.

Second, the G7 summit is revealed again to be what it has actually always been: namely, the ‘West’ in political economy guise.  It will no doubt be deemed to have had a successful meeting in Brussels, especially so without Russia, and probably that will be true.  Its longstanding strengths as a grouping – principally, its shared ideological assumptions and its relative informality – remain in place.  But so do its failings:  in particular, the narrowness of its membership in the context of a changed and still changing global political economy that rendered it inadequate to the task of steering the world as a whole out of financial crisis in 2008.  And, remember, the final call on this inadequacy was made by none other than a US president in the person of George W. Bush!

This does not necessarily mean that the G7 will wither away and disappear, although over time it might.  More likely, at least in the medium term, is that it will re-make itself as a caucus of Western countries within the wider ambit of G20 decision-making.  It will be joined as a sub-G20 grouping by the BRICS countries whose leaders now meet regularly to exchange views and coordinate positions and possibly also by a newly emergent MIKTA grouping, comprised of Mexico, Indonesia, Korea, Turkey and Australia, all of which are also G20 members.  This informal gathering of ‘middle powers’ was conceived at the Los Cabos G20 summit in 2012 and has thus far only met at foreign ministers level.  It doesn’t yet quite know what it wants to become, but it could easily emerge as another internal caucus grouping.  

Third – and it is important to reiterate this – the G20 is reconfirmed by all of these developments as the apex global organisation in relation to the governance of the global economy.  I posted some thoughts about the G20 on this site more than a year ago.  Unfortunately, I haven’t been required to change my mind very much.  I wrote then that the G20 was badly needed as a global ‘steering committee’, but I noted that it was but a vehicle, with no engine under its bonnet, no map in its glove-box, merely awaiting a new driver to come along periodically to take it out on the road as the convenor of the next summit.

I learned more in Moscow about the work of an informal troika of past, present and future summit leaders that now seeks to give the organisation some continuity and shape.  In other words, given that the next G20 summit will take place in Brisbane in November this year, Australian officials have been working closely with their Russian predecessors and are already starting to talk to their Turkish successors.  This will help, for sure.  But it isn’t enough and it is vital now that more high-level attention is given to building up and refining the best available global governance body that in this messy world we have managed to bring into being.