No G-8 Seat for China, Other Big Economies
By TOM RAUM
Neither is India, the world's largest democracy and one of its fastest-growing economies. Nor is South Korea, Brazil, Mexico or Spain, each with a larger economy than G-8 member Russia's. In fact, Spain recently inched past member Canada as the world's No. 8 economy, according to a World Bank tabulation.
Often officials from developing nations are invited as observers to the summit but have no formal roles. Among those invited to this year's gathering is Chinese President Hu Jintao.
Critics view the annual economic summit as a Cold War relic that needs to be reconstituted. It was formed in the 1970s, but economic dynamics are far different three decades later. The astonishing growth of some Asian nations and parts of Latin America have altered the math.
Yet expanding or changing the membership is not on this year's agenda, nor is it likely to be on next year's. Few officials from member nations seem eager to talk about the subject.
White House aides insist the president is more focused on substantive issues.
Igor Shuvalov, Russian President Vladimir Putin's top summit adviser, acknowledges that Russia lags behind the other seven members in terms of current economic output. But stay tuned, he says.
"We believe the importance of Russia in our global world will change. We have very talented people and well-educated labor. We have oil and gas," said Shuvalov in a telephone interview with U.S. reporters. "We will develop very quickly as one of the major G-8 countries."
What is now known as the G-8 was formed in 1975 as the Group of Major Industrialized Democracies. At the time, it consisted of the United States, Japan, Britain, France and Germany - undisputedly the world's five biggest economic powers at the time. Italy was added in 1976, Canada in 1977 and Russia in 1998.
The group holds annual summits. Economic themes are supposed to prevail, but often are overshadowed by events of the day and global politics.
Last year's summit in Scotland was jolted by multiple terrorist bomb blasts on London's transit system. This year's session probably will dwell on North Korea's recent barrage of missile tests and the nuclear aspirations it shares with Iran.
Robert Hormats, vice chairman of Goldman Sachs International and an expert on economic summitry, advocates expanding the G-8 to include other modern economic powers, especially China.
"When this group was formed in the 1970s, the members were the main influences on the globe. Now you've got a lot of other countries that have a lot more influence than they did 30 years ago and who are not in the process," said Hormats, who helped Presidents Carter, Ford and Reagan prepare for economic summits.
China's membership could help the G-8 this year deal with North Korea, Hormats said. He noted that last year, the summit partners called on the Organization of Petroleum Exporting Countries to produce more oil, yet neither Saudi Arabia nor any other OPEC member are participants.
This year's summit is in Putin's hometown, St. Petersburg. It is Russia's first time to hold the rotating G-8 presidency, a controversy itself given Putin's moves to restrict political and economic freedoms.
Sen. John McCain, R-Ariz., Rep. Tom Lantos, D-Calif., and former Secretary of State Madeleine Albright have said Russia should be excluded. A London-based think tank, the Foreign Policy Center, issued a report saying Putin's record makes a mockery of G-8's commitment to free markets and open societies.
But others want Russia to stay and for other nations to join, including nondemocracies that are big economies.
Johannes Linn and Colin Bradford, both former World Bank officials now with the Brookings Institution, have proposed expanding the group to 19 to 20 members.
They would add Australia, Argentina, Brazil, China, India, Indonesia, Korea, Mexico, Saudi Arabia, South Africa and Turkey. They also would add the country of the rotating presidency of the European Union if it was not already a member.
"The problem in a sense for the G-8 is that it has set itself up as a quasi-steering group for the world, but it cannot effectively and cannot legitimately deal with many of the key issues," Linn said.
And it will only get worse. "Five years from now, I cannot possibly see how a G-8 would still be relevant," he said.
But will the G-8 transform itself anytime soon? "Probably not," he said.
Graphic shows the worlds 15 wealthiest countries. (AP Graphic)