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by: Andrew Schrumm and Ruth Davis
Published: July 7, 2009

The days of the traditional G8 Summit are numbered. No longer can these eight powers convene effectively without the strong participation of the major economies of the global South. Pressured by a massive shift in global economic power, and matched by growing fatigue in the G8, a proliferation of different formats -- from G8+5 to MEM-16 to G20 -- have stretched legitimacy across the process. The stage is now set for the next "G" episode, to be played out this week at the G8 L'Aquila Summit in Italy.

The G20-G8 Continuum

While the proliferation of summit configurations offers involvement and concessions to different constituencies, it creates real problems for effective global governance. Front and centre are the G20 as an economic crisis committee and an evolving G8 which has embraced variable geometry to address specific problems with different countries around the table. Should this be seen as a phase of transition in global governance? If so, how much will leaders seek to invest in any of the different formats if they are seen as temporary? Is there a danger of a "wait-and-see" policy in global affairs, right at the time when there are urgent problems which need decisive and concerted attention?

The coexistence of G20-G8 is a bit like "festina lente"; leaders are making haste slowly, along various parallel tracks. However, the division of labour between the groups needs clarity. Without question, successful operation of the G20 has changed the game, as at the outset, the leaders of China, India and Brazil were on an equal footing as the traditional economic powers, a status that will be hard to downgrade. The G8-proper has several potential raison d'ĂȘtres as a political and security forum. It could seek to catalyze the reform of international organizations to being more in line with the real global balance of power, try to bypass bottlenecks in institutional negotiation and come up with fresh ideas to break stalemates. Indeed, German Chancellor Angela Merkel has seemed to suggest that the G8 should be seen rather as a body for discussion, consensus building, and declamatory statements -- for example, on the issue of the consolidation of single European seats on the IMF Executive Board. Meanwhile, she has indicated, decision making should be in the hands of the G20.

Unsustainable Configurations

The Italian G8 presidency has offered variable geometry as a mechanism to balance such tensions of representation and effectiveness. For each day of the 2009 summit, a cluster of different leaders have been invited for topical discussions on issues ranging from trade to climate to aid. The entire second day will feature the G5 -- China, India, Brazil, South Africa and Mexico -- group of major southern economies active in the Heiligendamm Process (HP) of enhanced dialogue on economic and environmental issues. The third day will see in upwards of 30 African leaders at L'Aquila to discuss new aid relationships in context of the economic crisis.

Although this approach has tempered expectations for straight-up reform while allowing for inclusion of the key non-G8 countries, it will not be a sustainable practice over the long-term. What it does is insert a new layer of complication into the G8 process, sustaining the "who's in, who's out" mentality. In trying to avoid the question of conditions for membership, what it has done is muddle any constructive discussion. In terms of economic power, China and India stand above many G8 member countries, while their influence in diplomatic affairs is growing. How can the G8 function effectively, now and in the future, without formal participation of China and India?

Putting labels on these various formats artificially creates problems of inclusivity. By definitional standards, some countries straddle categories -- Russia may be in the G8 but has been a leader in the BRIC-group, and Mexico may be in the G5 but it is an active member of the OECD -- where variable geometry creates more of these problems.

Changing Attitudes within the G8

While supposedly based on like-mindedness, the G8 club should not be seen as a monolithic bloc. The well-documented differences among its members on institutional reform serve to explain its slowness to embrace of change. The United States is assumed to be the natural leader in global economic and political affairs, with recent renewed declaratory interest in multilateralism. There is a tacit understanding that the US has the capacity to set the agenda and provide a role and direction for the G8 and G20, but it has not yet set out its stall. Indeed, Obama's G8 sidetrips to Moscow, to Ghana, and his audience with the Pope have arguably overshadowed his participation in the summit.

The Japanese position on G8 outreach and expansion was notably transformed by its experience of holding the presidency in 2008; then Prime Minister Taro Aso has publicly stated that "the G8 on its own cannot deal with several issues the world faces" and that working with emerging economies through the HP "is the way to better global governance in the 21st century." Meanwhile, Canada, the 2010 host, has remained supportive of the traditional G8, emphasizing "shared values" and celebrating its track record as a "highly successful group." Prime Minister Stephen Harper seems to pay little attention to the significant reallocation of global wealth and influence and how global governance should respond.

What about Europe? Europe has been failing to adjust to the new realities for a long time; the tenth anniversary of the euro came and went, yet the EU still lacks an international strategy or a common position in multilateral forums such as the G8. The split responsibilities for exchange rate policy between the European Central Bank and the eurogroup of finance ministers are hampering the ability of the euro to be a world currency, while the reluctance to move towards common positions is helping erode Europe's relevance and power at the global level.

Delaying the Inevitable?

Ahead of the joint declaration, clear indications have emerged that the Heiligendamm Process will be extended for another two-year term, providing for sustained informal and targeted dialogue among G8 and G5 countries. If not a transformative outcome, the continuation of HP may offer ongoing, substantive dialogue among the major economies on important issues while at the same time providing for careful reflection on the long-term G8-G20 structural questions. The global economy may be in a very different state in two years, and leaders will be better disposed to questions of global governance once the period of crisis management has passed.

In the meantime, the spectacle of summitry continues. The G8 Summit at L'Aquila this week will be swiftly followed by the G20 Summit at Pittsburgh in September. The ebbing prestige and waning enthusiasm for the G8 faced with the energy surrounding the G20 seems to suggest the writing is soon on the wall. But Pittsburgh should help provide some more concrete clues about the US position and in turn, the future of global economic governance.

Ruth Davis is Junior Research Fellow, International Economics, Chatham House

Andrew Schrumm is Research Officer, CIGI

See CIGI-Chatham House blog on G8 L'Aquila 2009

This commentary is a result of the July 6, 2009 workshop, "The G20-G8 Continuum: Global Governance in a World of Crisis," hosted by Istituto Affari Internazionali in Rome, in partnership with CIGI, Chatham House, and G8 Research Group.


About the Author

Andrew Schrumm, former Partnerships Manager

The opinions expressed in this article/comments are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors and/or International Board of Governors.