The sooner the Group of Eight big economies becomes grows to better reflect the changing realities of global economic power, the sooner we will get agreement and some co-operation on issues like climate change and controlling carbon emissions.

That China, India and Brazil are excluded from the G-8 and while Russia, an over-inflated emerging economy is a member, is the source of all the tension on these and other issues. For this reason it is no wonder China and India told the G-8 where to get off when asked to sign up to the idea of halving emissions by 2050.

The emerging economies represented at the meeting, led by India and China, refused to sign on for the G-8’s pledged 50% in emissions by 2050, even after pressure from the US. They also complained about subsidies developed nations give farmers. The G-8, in turn moaned about poorer countries for stockpiling food supplies and keeping currencies artificially cheap to give exports a competitive edge.

The disagreement again questions the need for the G-8 in its present form. It is more about the Cold War and its ending than facing the 21st century. Years ago it used to be the G-7, and really reflected the leadership of NATO, the military alliance in Europe. Then Russia was added after the Berlin Wall fell and Communism decamped.

But the idea of excluding China, the world’s third largest economy, and probably and including France, Canada, Italy and Britain (even if Britain is the world’s fifth largest economy) is risible. Certainly there’s less of a case for including India: its progress down the development path is nowhere near as advanced as China’s or Brazil’s. But India is an emerging economic and political power and its always better to recognise that than keep them outside and offside.

The G-8 has a nasty white look as well, which doesn’t sit well at the moment and won’t in the future. The present membership of the G-8 — the US, the UK, Japan, Germany, Italy, France, Canada and Russia — represents 870 million people who generate 62% of world economic activity each year. The so-called G-5 developing nations that attended the summit — China, India, Brazil, Mexico and South Africa — account for 11% of global output and 2.8 billion people, 41% of the world’s population.

But looking at the G-8 you can’t say there’s any one economy that stands out as a world powerhouse, unlike China, Brazil and India. The US is enfeebled economically and politically by an incompetent President. Britain is sliding into recession, as is Italy and probably France, Russia is all oil, dark dealings and near hyper inflation. Only Germany and Canada can stand on their own as solid economies with sound political leadership.

Japan, the host, is a cripple politically and its economic health is stretched, almost 20 years after the collapse of its property bubble.

Yet it was this collection of economic cripples and doddering political types (with the exceptions of Germany and Canada) that told the developing world what to do on climate change, food prices and production, but failed to listen to any complaints about agricultural subsidies, the sluggish pace of change on issues like climate change and economic issues.

The low point was the grandstanding French president, Nicholas Sakozy telling the media that meeting of the G-8 were too exclusive. This is rich coming from a man who has done his best to stop the European Commission from slashing agricultural subsidies and boosting aid to poorer countries past a tokenistic $US50 million or so.

Next year’s G-8 summit will be held in Sardinia, at a rich person’s resort, and hosted by a man who might have been in jail had there been a proper application of the law in Italy. I refer to Italian PM, Silvio Berlusconi. That he can be allowed to host such an “exclusive” summit says everything about why it is no longer relevant.

But they will be welcoming Barack Obama as the US President, and Gordon Brown might not be there — the British Labour Party might have gotten rid of him to try and save its own neck.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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