The power of eight
The G8 economic club is losing influence in a fast-changing world. But next week’s summit at Lough Erne, in Co Fermanagh, is still the most powerful gathering ever in Ireland
High security: razor wire near Lough Erne, in advance of the G8 leaders’ arrival. Photograph: Paul Faith/PA
Power play: David Cameron, Barack Obama, Angela Merkel and José Manuel Barroso watch the overtime shootout of the Chelsea v Bayern Munich Champions League final at last year’s G8 summit at Camp David. Photograph: Pete Souza/White House
Never before have so many of the world’s most powerful people gathered on this island. As G8 delegations fly into Belfast and Dublin this weekend to attend next week’s summit, British prime minister David Cameron has done the entire island a favour by hosting the annual gathering of one of the world’s most exclusive clubs on the shore of Lough Erne, in Co Fermanagh.
If nothing else it will put Ireland in the world’s spotlight for reasons other than those that have brought it to international attention in recent times: recession, bank crashes and bailouts.
But will the wielders of so much power deliver – for inhabitants of this island, its neighbour or anyone else – when they tackle the three issues on a typically eclectic G8 agenda: tax, trade and transparency? To a very large extent the answer depends on a much more profound question: in a world in which power is becoming more evenly dispersed, is the G8 club a relic of decades past when the West ruled the roost or is the Europe-North America big-state bloc with its Japanese appendage a spent force?
The answer to the second question is that the G8 countries still matter a great deal in global affairs. But their collective clout is waning. In recent years it has been waning fast, both because of real weaknesses in the US, Europe and Japan on the one hand and, on the other, explosive economic growth in most of the rest of the world.
The main reason the eight still matter is money. Together their economies accounted for half of the wealth created last year, as measured by gross domestic product (and they managed this with less than a seventh of the planet’s population). In terms of accumulated wealth – stocks, shares, bonds, property and the like – they are even more dominant. With the overwhelming majority of the world’s biggest companies headquartered in G8 countries, their economic clout remains enormous.
But it is the still pivotal global role of the US that really makes the G8 a force to be reckoned with. Despite talk over decades that it is a nation in decline, it remains the world’s sole superpower. Militarily it is a colossus, spending more on its defence forces than the next 10 biggest national spenders combined. Politically, in every region of the world it remains a major power, if not the major power. Underpinning all this is its economic might: its economy is by far the biggest and twice the size of China’s, its nearest rival.
But if that snapshot of global power in 2013 shows the West still forming the core of the international system, it does nothing to illustrate the changing dynamics of world politics.
For the G8 countries recent times have been abysmal, causing their long relative decline to accelerate. The US economy has had its worst five-year period since the Great Depression, and its increasingly polarised politics has weakened it at home and abroad.
Japan is close to marking a quarter of a century of economic stagnation and is one of the oldest, and most rapidly ageing, societies. Russia remains largely an extractive, commodity-based economy, and, like all autocracies, it is politically brittle.