G20 : Economic Cooperation ahead

G-7 agenda this year and what is in it for India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : G7

Mains level : Read the attached story

At the invitation of UK PM, PM Modi will participate in the Outreach Sessions of the G7 Summit this week.

Note the members of G7 and G20. UPSC may puzzle you asking which G20 nation isn’t a member of G7.

The Group of 7

  • The G-7 or ‘Group of Seven’ includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
  • It is an intergovernmental organization that was formed in 1975 by the top economies of the time as an informal forum to discuss pressing world issues.
  • Initially, it was formed as an effort by the US and its allies to discuss economic issues.
  • The G-7 forum now discusses several challenges such as oil prices and many pressing issues such as financial crises, terrorism, arms control, and drug trafficking.
  • It does not have a formal constitution or a fixed headquarters. The decisions taken by leaders during annual summits are non-binding.
  • Canada joined the group in 1976, and the European Union began attending in 1977.

Evolution of the G-7

  • When it started in 1975—with six members, Canada joining a year later—it represented about 70% of the world economy.
  • And it was a cosy club for tackling issues such as the response to oil shocks.
  • Now it accounts for about 40% of global gdp.
  • Since the global financial crisis of 2007-09 it has sometimes been overshadowed by the broader g20.
  • The G-7 became the G-8 in 1997 when Russia was invited to join.
  • In 2014, Russia was debarred after it took over Crimea.

Agenda of G-7 this year

  • The UK currently holds the presidency of the G7 and has invited India, along with Australia, Republic of Korea and South Africa, as guest countries for the Summit.
  • The meetings will be held in hybrid mode.
  • The theme for the summit is ‘Build Back Better’ and the UK has outlined four priority areas for its presidency:
  1. leading the global recovery from coronavirus while strengthening resilience against future pandemics;
  2. promoting future prosperity by championing free and fair trade;
  3. tackling climate change and preserving the planet’s biodiversity; and
  4. championing shared values and open societies.

Is India attending it for the first time?

  • Since 2014, this is the second time PM Modi will be participating in a G7 meeting.
  • India had been invited by the G7 French Presidency in 2019 to the Biarritz Summit as a “Goodwill Partner” and the PM participated in the Sessions on ‘Climate, Biodiversity and Oceans’ and ‘Digital Transformation’.
  • During Prime Minister Manmohan Singh’s UPA rule, India attended the G8 five times.
  • Russia was indefinitely suspended in March 2014 after the annexation of Crimea, reducing the count of the G8.

What to watch out for at this G-7 summit?

  • This will be President Biden’s first visit to Europe, where he will signal his key message “America is back”.
  • He has flown down to the UK, where he will meet British Prime Minister Boris Johnson, Queen Elizabeth II and other allies at the G7 summit.
  • He’ll continue on to a NATO conclave in Brussels on June 14, before his conversation with Russian President Vladimir Putin in Geneva two days later.
  • This sequencing of events has been done to coordinate Washington’s moves of consultations with allies before meeting the Russian President.
  • This ties in well with the US President’s initial foray into multilateralism — he held the first summit of leaders of “the Quad” — Australia, India, Japan and the US.
  • This was aimed at increasing vaccine production and aligning their positions toward Beijing.

Why is this meeting important?

  • The US-Russia relations are going through a rough patch — some analysts even refer to it as possibly their nadir since the end of the Cold War.
  • Interestingly, the venue of the Biden-Putin meeting — Geneva — is the place where then US President Ronald Reagan held his first meeting with Soviet Union’s Mikhail Gorbachev in 1985.
  • The key element that is making Washington take the important step of engaging with Moscow to contain the damage in their bilateral ties is that the US wants to focus on its strategic rival, China.

What’s in it for India?

  • India has long called for reforming global institutions and groupings to reflect modern-day geopolitical realities.
  • Trumps’ offer to expand G7 fitted into New Delhi’s idea of being part of the global high table.
  • With an assertive China looming, the US is calling all like-minded countries to partner in dealing with Beijing.
  • If Biden and Johnson want to take the leap forward and constitute a global democratic alliance of 10-11 countries, it will be an important signal.
  • India is likely to get vaccines from the US — both directly as well as through COVAX. Initial estimates suggest India will get about 2 to 3 million vaccines in the first tranche.
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