GROUP OF EIGHT. G8 Expansion: China, India, and Beyond? Harvard Model Congress Europe 2006 BY MATT SULLIVAN. Introduction. Explanation of the Problem

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1 GROUP OF EIGHT G8 Expansion: China, India, and Beyond? BY MATT SULLIVAN Introduction In studying global politics and economics, some observers tend to view international organizations as relatively static bodies. However, this perspective misses the underlying complexity. Global institutions are subject to constant change rules are amended, challenges evolve, and new problems arise. One of the most profound ways international institutions evolve is through changes in their membership. For example, the World Trade Organization (WTO), North Atlantic Treaty Organization (NATO), and European Union (EU), have all been transformed through the addition of new member states. Such changes are often hard to predict. During the height of the Cold War, who could have imagined that Poland and the Baltic States would leave the Soviet sphere and join groups such as NATO and the EU? These changes are not to be taken lightly: membership in international groups can either reflect dramatic shifts in national identity or result in dramatic shifts in that identity. Perhaps some of each phenomenon is present. Like these other institutions, the Group of Eight (G8) must also frequently reexamine its composition, and decide whether changes in membership may help the organization better fulfill its objectives. Explanation of the Problem Heads of state from the world s most advanced industrial nations gather at the G8 conference to discuss several of the central challenges of international affairs. Member states of the G8 have been characterized by thoroughly developed economies, liberal democratic systems of government, and their location in the Western Hemisphere (with the exception of Japan and Russia). The organization sought to include decision-makers from the states with the greatest ability to control the international agenda, shared common values, and could use their influence to address major challenges in the international sphere. However, recent changes in the global landscape have led some leaders to question whether the G8 adequately reflects the current distribution of global political and economic power. Those leaders, including several current G8 members, have proposed bringing additional countries into the fold, and no two countries have received more attention than China and India. Underlying the debate over G8 expansion are major theoretical questions of the G8 s raison d être, its reason for existence. The institution s future is at stake, as its membership controls its potential and constraints. Introducing more opinions and perspectives will diversify the G8 discussions and agenda, but could that diversity render the G8 incapable of fulfilling its mission and of speaking with a unified voice on the major challenges of our time? That fundamental question cannot be ignored as the G8 Committee enters its deliberations over the benefits and costs of expansion. The Formation of the G8 History of the Problem In addressing the question of G8 expansion, it is useful to trace the history and evolution of the G8 as an institution. The origins of the G8 may be traced to the early 1970s, when the United States organized a group of financial officials in response to the oil crisis and worldwide economic recession. The Library Group, as the gathering was called, included officials from France, Germany, Great Britain, Italy, Japan, as well as from the United States. In 1975, French President Valéry Giscard d Estaing organized a summit in Rambouillet, and proposed holding annual meetings to discuss major economic and political issues. With this action, the G6 was born. 1

2 G6, 7, 8 The G6 however, lasted for only a year. The 1976 meeting included Canada, whose inclusion was supported by US President Gerald Ford. For eighteen years, the G7 remained in the same form. Following the collapse of the Soviet Union and end of the Cold War in 1991, another new candidate emerged. The Russian Federation had assumed the Soviet Union s place on the United Nations Security Council, and positioned itself under Mikhail Gorbechav s policies of glasnost and perestroika to join the ranks of the industrial democracies. In 1991, Russia began meetings with the G7 following the main summit. The 1994 Naples summit marked the first use of the term G7 plus 1 to describe the proceedings, and, in 1998 Russia was allowed to participate officially in the main summit. This marked the creation of the G8 as it exists today. Recent Developments China Emerges as a Contender In recent years, proponents of G8 expansion have pointed to economic data as the strongest case for new membership. Russia, the most recent entrant to the G8, ranks only tenth in the world in gross domestic product (GDP), the standard measure of economic output, in a recent International Monetary Fund study. The World Bank, in contrast, places Russia 16 th, behind such nations as the Netherlands, Brazil, and South Africa. More importantly, China and India now rank second and fourth, respectively, in GDP levels that surpass all but two of the current G8 members. Clearly, then, the traditional view of the G8 as encompassing the biggest and richest no longer holds true. Serious speculation about the possibility of Chinese membership in the G7/G8 began in Chinese president Jiang Zemin visited the United States in October 1997, and President Bill Clinton reciprocated with at trip to Beijing in June This growing relationship helped to elevate Chinese standing and began to pave the way for China to join the international community in a previously unforeseen capacity. The central goal of these meetings in the late 1990s, however, was Chinese membership in the WTO. Joining the G7 as an eighth member was at best a secondary consideration. More recently, British Prime Minister Tony Blair host of the 2005 G8 summit and other leaders have advocated new debate over a possible invitation for China to join the ranks of the G8. Two processes serve as models for a possible Chinese ascent to the G8: the addition of Russia to the G7 in 1998, and the approval of Chinese membership to the World Trade Organization (WTO) in In each case, membership was granted only after a multi-year process, during which time the candidate country proved its worthiness for membership while present members of the institutions prepared themselves for the coming evolution. Russia and the G8 The five-year ascension of Russia to G8 membership between 1994 and 1998 offers a possible model for future expansion. Approval of Russian membership was generally viewed as a reward for a combination of reform and acquiescence on the part of Moscow throughout the 1990s. Following the disintegration of the Soviet Union in 1991, the remaining Russian Federation could have moved in an aggressive, nationalist direction or sought to maintain a state-run economy. Instead, President Boris Yeltsin guided Russia throughout the early 1990s on what many in the West understood to be a courageous, though often painful process of dramatic market reforms and privatization. In addition, Yeltsin oversaw the drafting and ratification of a new constitution that leaders in G8 member states hoped would put Russia on a solid path toward democratic consolidation. Another issue the expansion of NATO also motivated supporters of Russian membership. With the collapse of the Soviet Union, the NATO alliance had fulfilled its original objective in keeping the Soviets out of Western Europe. Nevertheless, Western leaders sought to redefine NATO s mission and expand its ranks to include former Warsaw Pact countries. Allowing the eastward expansion of NATO did not come easily to Russians, who viewed much of the adjacent territory as part of a near abroad in which their primacy must be maintained. Russia, however, did agree to stand aside in the mid-1990s as talks of NATO expansion intensified. Its tacit cooperation on the NATO issue led leaders such as American President Bill Clinton to advocate G8 membership as a reward for its acquiescence. After attending several G7 summits in a reduced role, Russia s rise to full membership came in completion in 1998, when the first G8 summit was held in Birmingham, UK. Although Russia is a full-fledged member, as the smallest economy of the group it does not participate in economic and financial discussions. 2

3 Rethinking the Decision? A number of leaders in G8 nations, however, have been disappointed with the path Russia has taken since earning its membership. Since the rise of President Vladimir Putin in 2000, Russian democracy has slipped toward greater authoritarianism and centralized control. Democratic freedoms have eroded considerably in the last several years, with the suppression of independent media and politically-motivated arrest of former Yukos chairman Mikhail Khodorkovsky, just two examples of the Kremlin s heavy-handed tactics. In February, 2005, the changes led American Senators Joseph Lieberman and John McCain to call for Russia s suspension from the G8. As the Russian case demonstrates, membership alongside industrial democracies does not guarantee that a state s domestic policies such as those of China will shift decidedly toward those of its G8 peers. China and the WTO Understanding the debate in the late 1990s over Chinese membership in the WTO is useful for anticipating issues that would reappear in discussions over admission to the G8. At the same time, skeptics of Chinese membership in the WTO leveled a number of complains against the policies of Beijing. Many of these objections are likely to resurface in a future debate over G8 membership. Skeptics of Chinese membership in the WTO, for example, pointed to a number of concerns regarding the country s ability to function positively as a member of the institution. In the wake of an Asian financial crisis, the late 1990s in China came to be characterized by weakening growth, high unemployment, and increasing social unrest. Export growth was stagnant through 1998 and into Arguments for Chinese institutional membership are grounded less in current GDP and trade figures than in projections of strong future growth, and in the late 1990s, a substantially more prosperous future for China was far from guaranteed. Supporters of Chinese entrance into the WTO argued that membership would raise direct foreign investment, helping to force inefficient state-owned enterprises to reform. Moreover, they believed China would also be pressured to reform its banking sector, which only recently began to give in to foreign pressures to lessen its exchange rate manipulation. If Beijing is fully convinced that G8 membership is in its best interests, the argument of supporters goes, the G8 may have greater leverage in persuading China to implement such reforms. Rise of the Indian Economy While Indian membership to the G8 is a more recent suggestion than the membership of China, the strong economic growth and large GDP of this still developing nation presents a compelling case on economic grounds. India s GDP per capita nearly doubled between 1990 and 2002, and has posted an average growth rate of 6.8% per year since In 2004 the estimated GDP was $3.3 trillion, making India the fourth largest economy in the world Summit Recently, UK Prime Minister Tony Blair sought to use Great Britain s 2005 G8 presidency to advance the issue of global climate change, and it is in this context that he began to advance the case for Chinese membership. Part of Blair s strategy involved inviting Chinese President Hu Jintao to a special climate change session on July 6. Over the past half-decade, the United States has remained opposed to the Kyoto Protocol, the most important agreement yet reached on curbing global warming. The US opposition is rooted in a belief that restricting greenhouse gas emissions from American industries would give an unfair economic advantage to other producers, including those in China and India, who would not be subject to limitations. Even today, China trails only the US in annual carbon dioxide emissions, and its demand for energy is growing rapidly. India, too, is a major polluter, ranking fourth in the world in greenhouse gas emissions. Though falling below the world average on a per capita basis, since 1990 India s total emissions have risen by a whopping 80%. Unless top polluters are on board, particularly China and the US, the likelihood of an effective climate accord is dim. As such, Prime Minister Blair appears correct in thinking that the questions of climate change and Chinese membership may be mutually supportive, and are best pursued in parallel. At the same time, the climate change issue may be used strategically by prospective G8 member states. Indeed, discussions of climate change offer China a major opportunity to demonstrate its willingness to cooperate on major international issues. Focus of Debate Given the nature of the G8, perspectives of individual countries and their leaders are relevant considerations. Indeed, several G8 leaders have begun to embrace 3

4 the idea of an expanded G8. The G8 question differs from some institutional expansion, however, in that the candidate countries are not fully and undividedly committed to earning membership. For example, while many Baltic and Eastern European states were clamoring for entrance into NATO in the mid-1990s, China and India have other objectives that influence the degree of their commitment to working toward G8 membership. As such, their stances must be considered along with those of the current member states. Great Britain British Prime Minister Tony Blair, a supporter of Chinese and Indian membership, sought to use Great Britain s 2005 G8 chairmanship to bring leading developing countries closer into the institution s decision making. Blair invited the heads of state from China, India, Brazil, Mexico, and South Africa to attend the 2005 conference at Gleneagles. Italy membership in the G8, are the promotion of democracy and further currency reforms. Human rights abuses, limitations on the civil liberties such as freedom of the press and freedom of religion are continual concerns, on which the US would like to see the G8 use their leverage to encourage reform. Some American officials, such as former US ambassador to the UN Richard Holbrooke and former commerce undersecretary in President George W. Bush s first term, Grant Aldonas, have expressed clear support for including both China and India. Their argument is that both countries have large and growing economies and a significant impact and stake in the state of the global economy. The United States must decide whether the best strategy for pressuring China to implement change is requiring that strict benchmarks of democracy be met and refusing entrance to China until those standards are reached, thus putting off any possible formal inclusion in the near future, or whether bringing leading developing countries to the table will be the most effective way to work with them for change. Russia Italian Prime Minister Silvio Berlusconi shares the general sentiment of his British counterpart. Berlusconi has argued that it no longer makes sense to hold meetings regarding the world economy with two major protagonists, China and India, absent from the talks. Canada Canadian Prime Minister Paul Martin has suggested holding an annual G20 summit while maintaining the G8 meetings. The Canadian position, another highranking official said, is based on a recognition that considerable global power and influence emanates from other countries outside the G8. The governor of Canada s central Bank, David Dodge, has been an outspoken supporter of increasing the G8 to the G12, with the addition of China, India, Brazil, and South Africa. United States Washington has continued to foster a working relationship with China, with President George W. Bush concluding a visit to Beijing in November The primary US diplomatic concerns, and likely requirements for Recently, Russia and China have sought greater economic, political, and military partnership. They have joined forces in pressuring several governments in Central Asia to evict Western (primarily American) forces that have been based there since the invasion of Afghanistan in Nevertheless, Russia and China both want to expand their influence in Central Asia, and may soon find their interests at odds. In the near future, Moscow s position on Chinese membership will be of considerable importance, as Russian president Vladamir Putin hosts the 2006 summit. China Chinese statements have shown both interest in and reluctance toward greater integration in the G8. China has much to gain by retaining its status as a leading developing country instead of embracing the G8. China and India s exemption from the requirements of the Kyoto Protocol, for example, are based on an idea that the countries development would be hindered by costly pollution-limiting measures. In addition, China has been free in recent years to invest in other developing countries (particularly in Africa) without feeling pressure to impose benchmarks or meet environmental standards, as G8 members typi- 4

5 cally do. Indeed, China is not eager to surrender its status as the world leader among developing countries. On the other hand, China has begun to take some steps to satisfy Western critics. In mid-2005, Beijing agreed to soften its policy of pegging the yuan to the dollar though this reform still fell short of many critics demands. For the G8, the Chinese attitude toward membership will be a major factor in determining the timing and conditions of possible membership. India At the present, membership in the G8 is secondary to a larger Indian institutional objective: a permanent seat on the UN Security Council. Across India s political parties, support is high for greater representation at several of the world s major organizations, and thus G8 membership is seen both as inherently valuable and as a stepping-stone to other, greater aspirations. India s democratic government would also be a closer ideological fit than China in the traditionally democratic G8. Possible Solutions The G8 has several options in addressing a fundamental problem facing the organization: how can the institution continue to identify itself as an overseer of the world economy when several of the largest and fastestgrowing international players are not included? Three categories of possible solutions, listed below from the most passive to the most transformative, may be considered as this G8 meeting proceeds. Status Quo First, the G8 member countries may elect to maintain the G8 as it stands today. Leaving the organization in its present form would prevent the loss in homogeneity that some leaders fear. Moreover, none of the eight member states would have their influence diluted by the addition of more voices. At the same time, failing to entertain the possibility of changes risks undermining the G8 s authority to speak as the collective voice of the leading global economic powers if certain influential states are excluded. Ad Hoc Participation Second, the G8 countries could commit to inviting other states to participate on a regular or rotating basis. Using Prime Minister Blair s 2005 model, for example, non-member states could be invited on an ad hoc basis. Such invitations may be issued by either the host country or the G8 as a whole, and could be determined according to the issues scheduled for debate at a given summit. Nevertheless, this sort of solution may lead to discontinuity in the G8 s focus, as certain countries may not be represented at meetings on an annual basis. Increasing Membership Third, the G8 could decide to initiate a process that would culminate in membership for one or more new countries. Although this solution could make consensus more difficult to attain, this solution alone will alleviate the gap between the original concept of the G8 as the biggest and richest and the current distribution of global economic power. Questions an Agreement Should Address Above all, any proposed solution to the issue of future membership must determine the conditions under which new offers of admittance may be offered. Membership could be tied to certain categorical benchmarks: for example, China would have to commit, in principle, to working with other member states to address the problem of global climate change. Democratic reforms and domestic poverty alleviation are two other possible benchmarks by which countries may be judged. If opting for this third, most ambitious alternative, the members of the committee should be prepared to outline a timeline and framework for expansion. Conclusion Unlike other topical discussions, the question of G8 expansion will have far-reaching and permanent ramifications for the future of the G8. The organization has no 5

6 enforcement mechanism, meaning that all decisions arrived at by its member states are dependent on the willingness of those countries to voluntarily follow through on their mutual commitments. With the addition of new members comes a greater likelihood for resistance to some proposals, but so too does a potential for a broader base of progress on modern challenges ranging from democratization to health epidemics to global poverty. The issue of expansion is a serious one, and your decisions at this conference will impact the G8 s ability to bring positive international change for decades to come. Bibliography: Bellini, James. The Out-of-Date G8. ABA Banking Journal. February, 2005, p. 14. Celebration, and Concern. The Economist. November 10, 2001 (US Edition). G5 gets seat at table but is in no hurry to join. The Financial Times. July 7, 2005, p. 8 (in special Gleneagles Summit section) Hilsum, Lindsey. The Chinese are Coming. The New Statesman. July 4, Lardy, Nicholas R. China s WTO Membership. The Brookings Institution, Policy Brief #47. April Available at < policybriefs/ pb47.htm> (Cited September 2005) Teather, David. China and India Groomed for Membership. The Guardian (UK). November 11, < (cited August 2005) Time to Bring Rising Powers into G8 Fold. South China Morning Post. July 6, 2005, p. 14 Welcome to China, Mr. Clinton. The Economist. June 27, 1998 (US Edition). 6

GHG emissions can only be understood

C H A P T E R 7 Socioeconomic Development GHG emissions can only be understood properly within the broader socioeconomic context. Such a context gives a sense not just of emissions, but the degree to which