Group of Seven (G7) Summit 2024

Group of Seven (G7) Summit 2024

Context: India is participating as an Outreach Country in the G7 Leaders’ Summit in Italy.

Origin of G7

• The G7 originated from a 1973 meeting of finance ministers and central bank governors in Paris, France.
• This meeting was convened in response to major economic challenges at the time — an oil crisis, rising inflation, and the collapse of the Bretton Woods system.
• In the Bretton Woods system, the value of the US dollar was fixed against gold. It required countries to guarantee the convertibility of their currencies into U.S. dollars to within 1% of fixed parity rates.
• Subsequently, the idea evolved as a forum where major industrialised democracies could coordinate economic policies to address common challenges.

Evolution and relevance

• G7 has evolved from an economic forum to a platform that aims to address a range of global challenges.
• While it lacks a permanent administrative structure, the G7 rotates its presidency annually, and the presidency serves as a temporary secretariat.
• Its relevance has been questioned as the combined share of its members in global GDP has fallen.
• According to the think tank Bruegel, the G7’s share of global GDP has declined from roughly 50% in the 1970s to around 30% in 2018.
• Experts argue a reconfigured G7+, which would include a common euro-zone representative and make space for China, India, and Brazil.
• It is questioned due to the inability to achieve consensus on issues like climate change.
• However, G7 has been instrumental in coordinating economic policies, promoting free & fair trade practices, shaping global governance issues, and supporting security cooperation & development assistance.

Agenda of G7 summit 2024

• It includes defending the “rules-based international system”. Key priorities include migration, climate change, food security, and the implications of artificial intelligence (AI) for humanity.
• It aims to coordinate economic policies to stabilise the global economy amidst concerns over inflation and trade tensions.
• Summit will focus on addressing climate change by discussing strategies to reduce carbon emissions and promote sustainable energy sources.
• In the context of COVID-19, G7 will prioritise global health initiatives, including pandemic preparednessn and vaccine distribution.
• Additionally, the summit will address geopolitical tensions, including relations with China and Russia, andnongoing conflicts with global implications.