Wednesday, July 15, 2009

Advent of G-14

The decision of Group of Eight (G-8)--the United States, France, the United Kingdom, Germany, Italy, and Japan--leaders to turn it into G-14, made in L'Aquila, Italy, is a historical step in many respects. If it does materialize, five countries with a growing economy, namely India, China, Brazil, Mexico, and South Africa, will join the world's eight leading industrial countries.

If Egypt is also included in the group, it will be a forum representing almost 80 percent of the world's population. This is an indication of the rapid changes to be introduced in global governance.

Emerging Economic Powers
Before Russia joined G-8, it used to be an organization of the world's seven most prosperous capitalist countries. They were regarded the deciding factor in world economy. They wielded the power to direct it, and took full advantage of this situation. As long as the erstwhile Soviet Union existed, they faced some challenges in pushing their agenda of a capitalist market.

However, with its disintegration, they had their way. Russia, bearing the mantle of the Soviet Union, itself opted for capitalist economy. China had already moved fast toward a market-led economy. With Russia joining the G-8, the organization seemed to be all-powerful. With rapid changes in global balance of economic power, it, however, soon turned into an anachronism. Rich countries were forced to reach out to emerging economic powers.

To endorse their professed intention for a developed world, invitations were extended to them gradually. These countries known as G-5 hold their meetings regularly. Their decisions also have an impact on the decisions made by the G-8.

Strong Case for G-14
Italian President Silvio Berlusconi has now made a strong case for G-14. This came as no surprise. Yet, this development could hardly be imagined one-and-half decades ago. What of treating them on equal footing, rich nations even refused to take their demands seriously.

The US President Barack Obama says in reply to a journalist's question that a solution of the economic crisis problem was unthinkable if a country like India remained outside the group. The world has really undergone a vast change!

Present Realities
According to reports received from there, the global system will be reviewed. That implies that the governance of the international organizations will have to be changed. The World Bank, International Monetary Fund (IMF), and other global financial institutions, and also the WTO will have to be reconstructed.

The process of political decisions must also change in accordance with the present realities in the world. In other words, the structure of the United Nations has to be changed. The alterations in global governance suggested at the G-8 summit can, therefore, be expected to prove to be a more suitable format to show a new world economic way.

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