G7 HOPES AND DISAPPOINTMENTS

On June 11-13, the G7 summit was held in the resort town of Carbis Bay on the Atlantic coast of Cornwall in the south of England. The meeting was the first face-to-face G7 summit in almost two years. As expected, the main topics of discussion were: post-pandemic economic recovery, the epidemiological situation in the world, problems associated with climate change, situation around the Iranian nuclear deal, actions against Russia and many more.

The ends justifies the means?

The G7 Leadership Summit in 2021 was chaired by the UK and aimed to unite the leading developed countries in the fight to rebuild their national economies after the COVID-19 pandemic, and to create a greener and more prosperous future. At least, this was declared by the organizers of the event.

In doing so, the following goals were set: to lead world leadership in the process of global recovery from the pandemic while creating conditions for increasing resilience to future pandemics; promote prosperity by advocating free and fair trade; continue to fight climate change and preserve the planet's biodiversity; defend global common values.

In addition to the summit, Great Britain intends to hold a series of meetings between various ministers of the G7 states during the year, both virtually and in different parts of the country. These meetings will discuss economic, environmental, health, trade, technology, development and foreign policy issues.

Seven ministerial tracks will be held during the year. At the same time, each of them will will support a key part of the current agenda with a single purpose - to lead the world efforts to restore the global situation in the post-pandemic period.

For example, the goal of ministerial meetings on finance, trade, digital technologies will be to support free trade. Meetings of ministers of health must develop common approaches to protect human health and global resilience to future pandemics. Climate and environment ministers will contribute to the development of measures to improve the environment. Finally, the meetings of the ministers of foreign affairs, sustainable development and the interior will focus on upholding shared values, including democracy and human rights.

By the way, the G7 format includes the leaders of Canada, France, Germany, Italy, Japan, Great Britain and the United States. The EU, represented by the Presidents of the European Council and the European Commission, participates in all discussions as a guest. Using the rights of the host country, the UK also invited the leaders of Australia, India, South Africa and South Korea to participate in the summit.

The choice of the guests was not accidental, as it ensured the participation in the summit of those countries that are currently not only the leading trade and economic partners of Great Britain, but also its partners in political dialogue.

At the same time, the choice of means for the implementation of the declared goals does not always justify their achievement. Thus, it is no secret that in order to implement their policies, most participants often do not hesitate to apply economic sanctions. Russia, China, Iran and a number of other states have long suffered from such sanctions, and, most likely, the list of sanctions will be extended in the coming years. Meanwhile, the restoration of one part of the world economy to the detriment of the interests of another is not the most successful strategy.

In addition, the International Chamber of Commerce (ICC) has issued a warning that the actions of the G7 leaders could incur serious costs to the global economy if they do not fundamentally change their approach to combating the COVID-19 pandemic.

Vaccine nationalism is dangerous!

G7 reports released ahead of the Carbis Bay summit showed that the UK and the US pledge to provide emerging economies with about 600 million doses of vaccines over the next two years. But ICC (an institutional representative for more than 45 million enterprises) warned that those commitments still fall short of the major collaborative efforts needed to tackle the impact of the coronavirus on the global economy.

ICC Secretary General John W. Denton, speaking on the very eve of the summit, made an interesting statement. Although the gesture of Great Britain and the United States ahead of the summit certainly deserves recognition, said Mr. Denton, from a global point of view, this is nothing more than childish steps to contain the spread of the virus.

“To put it simply, these figures are a drop in the bucket compared to the expected global production of 12 billion doses of tested vaccines this year alone. We see a clear risk that the world's richest countries will continue to stockpile vaccines at home, thus exposing their own citizens to the boomerang effect of COVID-19 and sorts and the costs associated with ongoing disruptions in global supply chains," said Mr. Denton.

ICC called on G7 leaders to maintain a clear and coherent roadmap to gradually bring the pandemic under control and provide vaccines to everyone, everywhere. At the same time, Denton added: “If the G7 wants to show real solidarity with the developing world, it must decide to divide up all available surplus vaccine stocks and remove trade barriers that continue to affect the supply of vaccines, the tools needed to end the pandemic, including tests and treatment.”

According to IMF estimates, $50 billion will be required to support the further increase in vaccine production capacity and to accelerate vaccination processes in developing countries, which is a small investment compared to the potential return on a quick victory over the pandemic. As such, the only way for the G7 governments to ensure a lasting economic recovery from the COVID-19 crisis is to invest in a major collaborative vaccination effort around the world.

China is consolidating?

One of the top political issues discussed at the summit was the issue of containing China. According to many Western analysts, the need for joint efforts to counter the expanding influence of China is of paramount importance for the G7 states. The Belt and Road Strategy accompanied by cheap and long loans issued without the need for political commitments, in fact “buys” the sympathies of African and Asian countries, making Beijing's influence in them more unconditional. This reduces the influence of the leading world states on countries with a resource economy.

According to one of the leading American experts on China, Matthew Henderson, the Belt and Road strategy was sold to the rest of the world as a soft, egalitarian, win-win alternative to aggressive US-led capitalism.

“But China used this strategy as a scheme to increase its wealth for only one strategic goal - to promote the economic, political and military hegemony of the Chinese Communist Party (CCP) around the world,” the American expert said.

Much of the infrastructure made available under the Belt and Road Strategy creates favourable market access for China. At the same time, it makes unlucky client states, whose governments are more concerned with solving their own short-term problems, debt dependent on China.

There is no shortage of comparing the two economic giants of the planet - the United States and China. Thus, the emergence of the United States as an economic power in the 19th century was associated with the creation of a single world transport infrastructure under the common control of Washington - from the Suez Canal to railways in India and Argentina, as well as the telegraph system.

China is currently busy building its own infrastructure - it now has more high-speed rail networks than the rest of the world combined. This is the starting point for the implementation of its strategy, whose goals extend beyond its borders to Eurasia, Russia, Southeast Asia and Europe.

Remarkably, not all G7 member states are sceptical about, let alone openly hostile to China. A number of European countries have very good relations with Beijing, and Italy is a member of the Belt and Road project. Therefore, it would be naive to expect unanimous approval of the strategy of action towards China from the participating states of the UK summit.

Summit of prestige

Despite different assessments of the G7 summit, almost everyone - both critics and supporters - agree that this summit can be considered a means to restore the lost prestige of the format. The fact is that in recent years the prestige of the platform began to decline rapidly. Compared to the G20 platform, which is becoming more popular and more prestigious.

It is no coincidence that many analysts believe that the prestige of G20 - a forum for finance ministers and heads of central banks of the nineteen largest countries in the world, as well as the EU - has surpassed that of the G7. New world powers, including Brazil, China, India, Mexico and South Africa, whose absence in the G7 was often noted, belong to the G20. The member states of the group represent about 80% of the world's GDP and three-fifths of the world's population.

Many observers claim that the G20 was most effective during the 2007-2008 global financial crisis. The G20 leaders first met in Washington in 2008 after the fall of investment bank Lehman Brothers. Although it has been more difficult to reach such a consensus in the years since the crisis, the G20 summits have given rise to ambitious goals. At the 2014 summit organised by Australia, leaders adopted a plan to boost their economies by 2.1%, which they failed to achieve though. In 2016, in Hangzhou, China, President Barack Obama and Chinese President Xi Jinping used the summit to announce their accession to the Paris Climate Accord to reduce harmful emissions into the atmosphere.

Obviously, due to its larger membership and global reach, the G20 is capable of solving many more issues than the G7. At the same time, making decisions and monitoring the progress of their implementation within the G20 format is much more difficult than within the G7 procedures.

The UK summit of G7 clearly demonstrated the limits, as well as the potential of coordinated action on urgent global economic problems. Obviously, compared to the financial crisis of 2008, when the G20 agreed on a $1 trillion package of measures to rescue the global economy, the results of the current summit to overcome the post-pandemic crisis were much more modest. And the question of whether the summit breathes in a new spirit of cooperation in a world with increasing ideological polarisation and global competition remains open.