Madhav Nalapat

G8 must make way for new system

By M D Nalapat (China Daily)
Updated: 2010-07-07 07:54

Over the years, there has been a crescendo of voices from the US and the EU urging that large emerging economies such as India and China be "responsible stakeholders in the international system".

What is left unsaid is that such voices expect Delhi and Beijing to be responsible to Washington and Brussels. They would like the leaders of both Asian giants to adopt (or to agree to) policies that harm the interests of their own citizens, and promote the interests of a few in the US and the EU, such as the large financial institutions that have almost destroyed the world economy by their greed, or oil and copper companies who assist speculators to drive up prices of raw materials in a way that harms the economic interests of the 2.5 billion people of India and China combined.

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Take the example of the EU. This huge association seeks to shut the door to competition from the big emerging economies, by putting in place numerous tariff and non-tariff barriers to entry. At the same time, they seek to maximize the sale of luxury cars and other high-priced items to the Asian markets. Clearly, for the EU mandarins, "Free Trade" means freedom for the EU to sell goods to Asia, but no freedom for Asian entities to have reciprocal privileges in European markets. It is the same with human beings.

Both Europe and Asia should follow the same policies on giving each other market access and welcoming migration, rather than the one-way traffic that is the norm presently.

When the G8 was expanded into the G20, it was expected that the new forum would set right the imbalance in global consultations on financial matters by ensuring that the voices of China, India and Brazil are heard before policy gets decided. In other words, just as the G7 became the G8, the G8 would become the G20.

Instead, the G8 has continued, and has imposed a format whereby they meet in advance of the G20 summits and work out a common position that they then ask the other 12 countries to accept. The G8: G20 format has become a means to influence the big emerging nations to once again accept the policy leadership of the US and the EU, rather than being a forum to reconcile the needs of both the developed as well as the emerging countries.

If the G8 continues, then the "G12" need to meet in advance of such get-togethers the way the G8 does, so as to seek to find common positions on global issues.