India and G-8 Summit

The Group of Eight or G-8 is a global forum for the governments of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States. The member states of the G-8 together account for about 65 per cent of the world economy.¹ The group’s activities include year-round conferences and policy research, culminating with an annual summit meeting attended by the heads of government of the member states. The European Commission is also represented at the meetings.

Each year, member states of the G-8 take turns assuming the presidency of the group. The holder of the presidency sets the group’s annual agenda and hosts the summit for that year. The presidency for 2007 belongs to Germany, which recently hosted the 33^rd G-8   summit in  Heiligendamm from 6 to  8 June 2007.

Viewed in a broad perspective, the concept of a forum for the world’s major industrialised democracies emerged following the 1973 Oil Crisis and subsequent global recession. In 1974, the United States created the Library Group, an informal gathering of senior financial officials from the United States, the United Kingdom, West Germany and Japan. In 1975, President Valery Giscard d’Estaing invited the heads of government from West Germany, Italy, Japan, the United Kingdom and the United States to a summit in Rambouillet. The six leaders agreed to an annual meeting organized under a rotating presidency, forming the Group of Six (G-6). At the behest of the United States, Canada joined the group in 1976, and the group became known as the Group of Seven (G-7). The European Union is represented by the President of the European Commission and the leader of the country that holds the Presidency of the Council of the European Union and has attended all meetings since it was first invited by the United Kingdom in 1977.²

Following the disintegration of the Soviet Union and ending of the Cold War in 1991, Russia emerged as the successor state of the former Soviet Union. Beginning with the 1994 Naples summit of G-7, Russian officials held a separate meeting with leaders of the G-7 after the main summit. This group became known as the Political 8 (P-8), or colloquially as the ‘G-7 plus 1’. At the initiative of United States, Russia formally joined the group in 1997, resulting in the formation of Group of Eight (G-8). This was partly a gesture of appreciation from the then US President Clinton to Russian President Boris Yeltsin, who steadfastly pursued economic reforms in Russia and remained neutral to the eastward expansion of NATO. This decision was not without its detractors; on 18 February 2005, US Senators Joe Liberman and and John McCain called for Russia to be suspended from the G-8 until democratic reforms and political freedoms in Russia were ensured by Russian President Vladimir Putin.

The G-8 is deemed to be an informal forum, and it, therefore, lacks an administrative structure like those for international organizations, such as the United Nations or the World Bank. It neither has a permanent secretariat nor offices for its members. The presidency of the group rotates annually among the member countries, with each new term beginning on 1 January of the year. The country holding the presidency is responsible for planning and hosting a series of ministerial-level meetings, leading up to a mid-year summit attended by the heads of government.

The ministerial meetings bring together ministers responsible for various portfolios to discuss issues of mutual or global concern. The range of topics include health, law enforcement, labour, economic and social development, energy, environment, foreign affairs, justice and interior, terrorism and trade. The best known of these meetings is the G-7, which refers specifically to the annual meeting of financial ministers from the seven member countries excluding Russia. There are also a separate set of meetings known as the “G8+5”, attended by finance and energy ministers from all eight member countries in addition to the People’s Republic of China, Mexico, India, Brazil and South Africa; created at Gleneagles, Scotland in 2005, primarily to reach a consensus statement on a post-2012 Climate Change settlement. As well, representatives from the European Commission are present at all G-8 meetings.

In June 2005, justice ministers and interior ministers from the G-8 countries agreed to launch an international database on paedophiles.³ The G-8 officials also agreed to pool data on terrorism, subject to restrictions by privacy and security laws in individual countries.⁴ Also in June 2005, the national science academies of the G8 countries signed a statement on the global response to climate change, joined by Brazil, the People’s Republic of China and India, three of the largest emitters of greenhouse gases in the developing world, behind the United States which produces 20 per cent of all emissions. The statement stressed that scientific understanding of climate change is sufficiently clear to justify nations taking prompt action,⁵  and explicitly endorsed the consensus of the Intergovernmental Panel on Climate Cange. Later in 2005, the G-8 pledged more money to help fight the AIDS pandemic. The $50 billion pledge represents a doubling of the amount already allotted by the G8 to fighting the disease.

India and G-8

India’s participation in G-8 summit was facilitated by the British Prime Minister Tony Blair when India was invited along with other member countries of the so-called ‘Plus-Fives’- India, China, Brazil, Mexico and South Africa, at the 2005 Gleneagles G-8 Summit.  Continuing that practice, German Chancellor Angela Merkel invited the member countries of ‘Plus-Fives’, to participate in discussions on major agenda items at the 2007 Heiligendamm G-8 Summit. Though all five countries have established themselves as ‘emerging powers,’ India has quietly placed itself at the vanguard through an active and constructive diplomacy. Should the G-8 canvass alternative viewpoints in efforts to address the most pressing international issues, the Indian government will be well placed to advance its proposals.

It is worth mentioning here that India has made positive contribution to global initiatives, particularly within the United Nations organization (UN), where it ranks as the third contributor of military and civilian police personnel to peacekeeping missions.⁶ In fact, India is currently being considered for a permanent seat in the UN Security Council. Britain and France have both publicly endorsed India’s bid, while Russian President Vladimir Putin called India “our candidate number one.”⁷ India is also an active member of the World Trade Organization (WTO) and a central figure in powerful regional blocs. India is a leading member in the Association of South East Asian Nations (ASEAN), the South Asian Association for Regional Cooperation (SAARC), the South Asian Free Trade Agreement (SAFTA), the Group of 20 (G20), the Group of 33 (G33), and the Group of 77 (G77). India demonstrated leadership among non-G8 nations during the Doha Round of WTO trade negotiations, calling for the elimination of Western agricultural subsidies. Thus India has necessary credentials to discharge its functions as a responsible member of G-8.

With a population exceeding 1 billion (and growing at 1.606 per cent per year)⁸ and a total GDP of USD4.287 trillion,⁹ India is fast emerging as a truly global economic force. The world’s eleventh largest economy,¹⁰ India has averaged over 7 per cent real GDP growth since 1994;¹¹ some analysts expect growth to reach 10 per cent in 2007.¹² According to a report by Goldman Sachs, India will overtake France, Italy and the United Kingdom to become the world’s fifth largest economy by 2025.¹³ The same report predicts that, on current trends, India will become the world’s second largest economy behind China by 2050.

India’s burgeoning economy, which is currently worth the USD796 billion is fueled primarily by information technology (IT), pharmaceutical, and business processing industries. India’s large pool of young, highly-skilled workers and increasing technical capacity has made it a major hub for scientific research and development.¹⁴ In 2005-2006, turnover from the IT sector alone surpassed USD23 billion, while biogeneric production and contract services in the pharmaceutical industry amounted to USD8 billion.¹⁵ International corporations have been anxious to establish themselves in India’s growing economy; their increased investments have facilitated economic modernization.¹⁶ Foreign direct investment (FDI) has grown by 100 per cent over the past two years to reach USD2.04 billion.¹⁷   

Market-oriented economic reforms undertaken by India in the aftermath of confronting a balance of payments crisis in 1991 have proved instrumental in providing a fillip to the Indian economy it has adopted several significant reforms aimed at liberalizing foreign investment and exchange regimes, reducing trade barriers, safeguarding intellectual property rights, and updating the financial sector.

Challenges Ahead   

India is likely to face many impediments before it could count itself among the world’s agenda-setters. The German presidency’s emphasis on economic liberalization and sustainable resource use does not seem to augur well for India, as it is conspicuously absent from WTO negotiations and the Kyoto Protocol. India is one of the world’s worst polluters, emitting over 1.2 million tonnes of greenhouse gases in 1994, or approximately 15 per cent of emissions in the Asia Pacific region in that year.¹⁸ However, India’s concerted attempts to streamline the financial sector and to create a more investment-friendly business environment have been plagued by labour market rigidities, regulatory controls, bureaucratic corruption, ¹⁹ and political weakness.²⁰

International community seems to be anxious about India’s ongoing territorial disputes with Pakistan as well as its reluctance to accede to the NPT and CTBT. It is one of only eight states that have not signed the NPT, and has been censured in the past for conducting nuclear missile tests. A recent civil nuclear cooperation deal with US could collapse unless India agrees to stop its nuclear testing and prohibit spent fuel reprocessing.²¹

Over the past couple of years India has evinced keen interest in the agenda of the G-8 summits and has taken steps to implement the main decisions of Summit in its national, regional and international interaction. Undoubtedly India is not bound by the same obligations as G-8 member countries; it has taken steps over the past year to incorporate the policy principles of the 2006 G-8 summit held at St. Petersburg in its national strategy, particularly with respect to alternative energy. Indian commercial and public electricity demands are predicted to double by 2015.²²

In order to meet its future economic needs; India has begun to shift its energy supply system away from conventional fossil fuel sources and toward the development of a civil nuclear programme. Nonetheless, India is poised to push ahead with its nuclear development programme with 15 small and two medium-sized nuclear reactors in commercial operation, another six under construction, and three fast-breeder reactors scheduled to begin construction before 2020.²³

India’s status at recently held 33^rd G-8 summit at Heiligendamm in Germany was that of a ‘special guest observer.’ As at the Gleneagles (2005) and St. Petersburg (2006) summits, India was asked to consult on a select few topics. Early indications from Agence France Presse suggested India and its fellow outreach countries would be allowed to participate in discussions on intellectual property rights (IPR), rules governing working conditions, and climate change.²⁴

India has a significant role to play in discussions on climate change and sustainable resource use. Its continued refusal to join the Kyoto Protocol and commit to reducing emissions prompted German sherpa Bernd Pfaffenbach to encourage emerging economies to play a more ‘positive role’ in the fight against climate change: “A country such as India could improve its international image by being seen to act.”²⁵ Though it has so far demurred, India’s political ambitions within the international community may lead to sizeable concessions at Heiligendamm.

It was reported in the German media that Germany would seek to engage India and other developing countries in a structured dialogue about intellectual property rights (IPR) enforcement and strengthened and standardized rules against the trade of falsified products. India’s relatively weak patent laws have adversely affected international pharmaceutical and chemical companies, causing losses of more than USD450 million to trademark piracy. However, India has long maintained that developing nations should not be held to the same standards as their industrialized counterparts. The Indian government has continually asserted that any further IPR changes must be state-specific. India’s involvement in further negotiations at Heiligendamm will be vital to finally establishing a more robust international IPR protection system.

As part of an initiative known as the “Heiligendamm Process,” Germany has allowed the Plus-Five countries, including India, to attend ministerial meetings previously reserved for fully-integrated members. On 9 February 2007, India and its fellow outreach nations were guests at the working dinner of the G-7 Finance Ministers meeting in Essen. They also attended the meeting of G-8 Ministers for development cooperation in Berlin on the 26-27 March 2007, and were  present at the foreign ministers meeting in Potsdam at the end of May 2007.

As G-8 member states wrangled over the final text of climate change on 7 June, US President George W Bush said India and China ‘must’ be involved for success of any effort to fight global warming. Subsequently, in a landmark move the G-8 member countries on 7 June 2007 agreed to halve dangerous greenhouse gas emissions blamed for global warming, by 2050. The summit host, German Chancellor Angela Merkel, however, said though she was ‘very, very satisfied’ with the agreement the accord was a compromise as it fell short of her hopes for a binding deal. “Many countries moved on this issue,” Merkel said, adding that the accord gave impetus to negotiations beginning in Bali in December to find a successor to the UN-backed Kyoto Protocol on capping greenhouse gases that expires in 2012.²⁶

It is interesting to note that on the sidelines of the G-8 summit, the five ‘outreach’ countries- Brazil, China, India, Mexico and South Africa – also known as G-5 countries, held a separate meeting on 7 June 2007  wherein it was agreed to explore prospects of joint collaboration in cross border investment, research and innovation, climate change, energy and development. This could be termed as an attempt on the part the G-5 countries to seek to take advantage of their inherent strength. The joint press statement issued after the meeting of the G-5 countries reflected the consensus view that all of these challenges must be addressed from a multilateral, regional and bilateral perspective, taking into consideration the interests and capacities of different states’. The leaders of the G-5 countries reiterated their shared conviction that developing countries must participate more actively in the ‘consolidation of strategies’ to deal with challenges in an increasingly inter-dependent world.²⁷

It is worth mentioning here that India and other member countries of the ‘outreach’ G-5 are not active participants in the G-8 processes, as Prime Minister of India, Dr. Manmohan Singh said on 9 June 2007: “In  fact G-8 communiqué was issued even before our meeting and we did make the point that in future, if similar meetings have to take place, then we should get a chance to discuss issues of our concern before the G-8 meeting so that our point of view can be reflected in the thought processes of the G-8. And I said we have come here not as petitioners but as partners in an equitable, just and fair management of the global comity of nations which we accept as the reality in the globalized world.”²⁸

In his meeting with German Chancellor Merkel on 8 June 2007, Indian Prime Minister had reiterated the same point to and she recognized there was merit in what was said. Dr. Manmohan Singh hoped that next year’s meeting, “if we are invited, will be in a form in which we have a chance to interact with the G-8 nations before they interact amongst themselves.”²⁹

The dynamic role being played by the ‘outreach’ G-5 countries in the global economy  is a new reality, which the developed countries respect and they recognize there could be no meaningful management of the global issues in which India, China and other emerging countries like Brazil, South Africa, Mexico are not involved. The G-5 insisted on not taking climate change issue out of the jurisdiction of the United Nations, and G-8 members agreed to this suggestion. On the ticklish issue of greenhouse gas emissions, India floated the idea that developing countries’ per capita emissions will at no time exceed that of the Developed countries. If the Developed countries did more to reduce their green house gas emissions per capita, developing countries would also reward them by doing more. India’s suggestion was welcomed by other member countries, and it was perhaps an important contribution made by India at the G-8 summit.

Conclusion 

India’s burgeoning economy, geographical size, population, and geopolitical position make it eligible not only as a leader in regional affairs, but also an increasingly vital partner in international decision-making. Its ability to influence the global agenda prompted British Prime Minister Tony Blair to deem India’s formal inclusion into the G-8 ‘crucial.’³⁰ Other G-8 leaders have also been receptive to the idea of an expanding G-8.  Russian President Vladimir Putin invited India and China to a pre-summit meeting in 2006 where he stated that the interests of the three countries were ‘practically identical’³¹ and that Russia would ‘of course support’ any proposal to include India in the group.³² It is interesting to note that other G-8 leaders have found it increasingly difficult to disregard the reality of India’s emergence on the world stage. In 2004, then Italian Prime Minister Silvio Berlusconi said, “It doesn’t make sense for us to talk about the economy of the future without the two countries (India and China) that are protagonists on the world stage.”³³

However, India’s induction into the G-8 would enhance India’s international responsibilities towards developed as well as developing countries. In the first instance, it would entail its exit from the G-77, much as Mexico was forced to quit the group in 1994 following its accession to the Organization of Economic Cooperation and Development (OECD). Though a final decision remains distant, New Delhi must carefully weigh its options and determine what it is willing to sacrifice for a place beside the world’s wealthiest nations. Even outside the Group, as it has proved during Doha Round negotiations, its influence on global economic and political affairs will continue to grow. Besides, India can make positive contribution by highlighting the priorities of the developing countries and seeking endorsement of the developed countries on those issues in an amicable way.

References

1. Based on UNDP data
2. “EU and the G8”, http://society.guardian.co.uk/children/story/0;html
3. David Batty, “G8 to launch international paedophile database”, The Guardian, 18 June 2005.
4. Martin Wainwright, “G8 to pool data on terrorism”, The Guardian, 18 June 2005.
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25. Berlin presses for emerging nations’ role at G8 summits, Financial Times, (London), 25 January 2007, accessed on 30 May 2007, http://search.ft.com/ftArticle?queryText=berlin+presses+for&y=0&aje=false&x=0&id=070125000838.
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28. “PM’s on board interaction with media on flight from Berlin to New Delhi”, PIB Press Release, 9 June 2007.
29. Ibid.
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33. ‘G8 May Become G10 as India, China Tipped to Get In’, The Tribune Online Edition, (Chandigarh), 11 June 2004, accessed on 6 June 2007, http://www.tribuneindia.com/2004/20040612/biz.htm#1.

Source: Third Concept/July 2007/Vol.21/No.245/P.no. 7/