Right now, the 50th meeting of the Group of Seven (G7)
has taken place against a backdrop of increased geopolitical tensions, protectionist trade policies, and a fraying of the global order shaped by Western-inspired institutions.??
The seven member states (Canada, France, Germany, Italy, Japan, the UK, and the US) were joined by the leaders of 10 emerging economies as they tackled issues including international security, the governance of AI, climate change, and food security.??
“The creation of the G20 a quarter-century ago marked a milestone in the postwar world order, building on the momentum of market-led globalization. But it is now losing influence due to geopolitical divisions and a reversion to nationalist policies,” says Iacob Koch-Weser
, an associate director at BCG specializing in geopolitics and trade.?
“In this difficult moment, the G7 can work to reassert its leadership on global issues, such as AI regulation and international security. Ultimately, in a more interconnected, multipolar world, it can’t work in isolation.”
The broader G20 group has recently proved too diverse to achieve meaningful agreements and leaders from China and Russia did not attend the last meeting. ? ?
These are some of the key challenges facing the G7:?
- Since the G7 was first established in 1975, the economic weight of many emerging markets has substantially increased relative to the industrialized economies that were the basis of post-war institutions for multilateralism.? Emerging economies such as India and China are not only wealthier and more populous, they also want to exert independent influence on the global stage, while countries in the Global South want to ensure their interests are better represented.??
- The BRICS group
of emerging nations is growing both in the number and strength of member countries, and in ambition. The ten nations that are, or will be, part of the group account for 40% of crude oil production and exports, one quarter of global GDP, and two-fifths of global trade in goods. It also has a New Development Bank and a BRICS payments app that enables transactions in non-dollar currencies.?
- Wars in eastern Europe and the Middle East have become protracted and consequential for entire regions. While the war in Ukraine has galvanized the G7 to present a united front, there is a clear difference in approach among world leaders. India, for example, has not imposed financial sanctions on Russia.??
- Far-right movements are growing at the expense of the centrist parties in some industrialized nations. This could lead to the erosion of the G7 from within, as politicians favor nationalist policies and put less emphasis on multilateral institutions.?
- There has been criticism of the G7 for not adequately addressing the interests of the Global South when faced with crises including climate change and the COVID pandemic. Western debt restructuring and loan mechanisms—which often come with conditions and constraints—have also been less appealing than China’s approach of funding critical infrastructure. That means that China is exerting considerable influence on these nations. And while the G7 has been vocal about the need to promote democracy and free markets, the sentiment has not always been widely echoed by leading emerging economies.??
There are also many opportunities for the G7 to continue shaping world affairs:??
- Despite a backlash against globalization in some quarters, there is a clear need for alignment among like-minded leading nations, especially when it comes to international security. Aside from geopolitics, a coordinated global response is needed on climate change, migration, and the regulation of AI.?
- The trend away from just-in-time supply chains, as well as increased caution about overreliance on imports from China, means that many trade routes and relations are being reconfigured
. This is an opportunity for the G7 nations to establish stronger relations with some of the emerging economies, and cement new relationships.??
- Some members of the BRICS group such as Brazil and India have important relationships to foster with the US in particular, and may be able to exert influence from within the alternative grouping. G7 nations could consider how to double down on these relationships, for example through the infrastructure projects for an India-Europe trade corridor as an alternative to China’s Belt and Road initiative.??
- The G7 has a first-mover advantage in the timings of its annual meeting. G7 leaders meet in early summer and their statements may then influence the agenda for meetings of the G20 and BRICS in the fall.??
MARK J. GUAY, P.C. - We Build Great Teams?
5 个月Great summary. Thank you.
Founder and Consultant-Researcher In Sustainability chez Sustainability Consulting Group
5 个月I. Thx! II. The recent G.7 was successful. III. The current Systemic Risks can offer opportunities for reflexion that can boost democracy and the western's global leadership. IV. It belongs to us to oppose the Post-West Era Agenda led by Global South and Alternative Global agenda. In fact, while the one led by Putin is associated with a zero and negative sum game, the one of the west needs to be driven by a positive sum game that reduces the deficiencies of democracy. V. Of course, we can't afford to ignore how recent amplification of socioeconomic inequalities have led to the PESSIMISTIC APPROACH OF THE IMPACT OF POLITICAL ANTHROPOLOGY ON THE INTERNATIONAL RELATIONS. It belongs to us to create the condition of Optimistic approach. I'm optimistic person by nature. I'm sure as well that Cognitive and Behavioral Sciences could help. Most of the current geopolitics tensions could be considered as behavioral issues. For example, Pr Putin said that he has a HISTORICAL RIGHT TO INVADE UKRAINE. Which means, he's subject to historical anchoring bias. Therefore, if we work hard to reduce the effects of cognitive biases into the conscious and unconscious decision-making process of politicians, we could reduce tensions.
Business Consulting & Photojournalism
5 个月Within the G7 group the public seem to have a differences of opinion, view and priorities to that of the leaders. The recent annual meet up comes across as fire fighting global issues at expense of national ones. The G20 is much more of broader countries with emerging economies perhaps to align with the values of G7 as the bench mark. The problem is G7 economies relies on other nations on trade and development. Although, G7 might be seen as a exclusive club with same shared vision, value and dominance. BRICS perhaps was set up to balanced out G7 western dominance. Equally, the SCO Shanghai Corporation Organisation set up on the Belt & Road Initiative. With India, they seem to bridge between all organisations from G7 to SCO with non-alignment and capitalising on all fronts. The reinforced statement on climate change targets set by G7 is perhaps its own goal which could industries becoming uncompetitive to extra regulations and costs where as SCO and G20, Climate change is a lower priority. It goes back to emerging nations right to make development then G7 telling them detriment the environment but it was OK when the G7 caused pollutions during the industrial periods of 18th and 19th century.
Head de Expans?o Comercial CI 360o | Gest?o de Novos Negócios CI 360o Criando a melhor assessoria de Investimentos para Assessores e Clientes
5 个月Very interesting analysis. ?G7 is facing a critical need for multilateral cooperation amid rising geopolitical tensions and shifting global dynamics. With the G20’s influence waning, the G7 must lead on issues like AI governance, climate change, and international security. By engaging emerging economies and addressing the Global South’s concerns, the G7 can reassert (and keep) its relevance and foster a more stable, multipolar world order.
Customer Service Specialist at Mercedes-Benz Stadium
5 个月Interesting! Eye opening and informative.