G7 faces legitimacy crisis as new players gain influence

OTTAWA—It is no coincidence that NATO boss Jens Stoltenberg came to Ottawa right after the G7 Summit in Italy. He is likely helping Prime Minister Justin Trudeau ensure that between the photo-ops and unimportant resolutions, the next G7 in Kananaskis, Alta., also includes loads of fearmongering. The G7 bills itself as an informal alliance of the world’s major economies. It is in reality a coalition created in 1973 to uphold Western hegemonic control over the global economy. It includes Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union. It is not bound by global treaties or international oversight. The presidency rotates annually. The G7 has no underlying bureaucracy and is accountable to no one. It emerged from then-U.S. President Richard Nixon’s decision in 1971 to make the American dollar inconvertible to gold. In his attempt to fight inflation, he let the dollar float free but not before cutting a deal with Saudi Arabia to price its oil only in U.S. dollars. This led to the collapse of the Bretton Woods system for international financial exchange in 1976 with the Jamaica Accords. That’s when Canada joined the group. The Bretton Woods system was created in 1944 as a post-Second World War strategy for British and U.S. domination of the global economy. To help the mission, it established the World Bank, World Trade Organization, and the International Monetary Fund (IMF). As David Barkin, distinguished professor at Metropolitan Autonomous University in Mexico City explains, the goal was to set the U.S. up as the global manufacturing hub and the U.K. as the financial centre. To secure raw materials and to build purchasing capacity for American made goods, the IMF was tasked with producing debt-driven dependencies, especially in the Global South. The IMF’s heavy-handedness eventually caught up with it. The fund began to be despised by the developing world, which, along with the energy crisis of the 1970s, eventually led to the demise of Bretton Woods. A less intimidating, more socially conscious replacement was needed. That’s when the G7 came in, as an ad-hoc economic alliance to espouse things like nuclear disarmament, food security, and gender equality. The real intention stayed the same—to exert coercive control of the international economy. The declaration of the 2024 summit in Italy illustrates this amply. As they do every year, the G7 leaders once again reiterated the need of “partnering with African countries, reinforcing food and energy security, addressing the triple crisis of climate change, biodiversity loss, and pollution and promoting human-centered artificial intelligence.” They will not take action on any of it. What they will do is “support for Ukraine and a just and lasting peace in the Middle East as well as their commitment to a free and open Indo-Pacific.” These lines were buried deeper in the press release. Decoding the jargon, the message is clear: the G7 will continue the NATO proxy war with Russia, keep supplying support and arsenal to Israel for its campaign in Gaza, and gear up the NATO war machine for an eventual showdown with China. That, arguably, is a cynic’s view. A more balanced view is that the G7 appears to be in a crisis. Like Bretton Woods in the 1970s, it is losing legitimacy. No one believes its jargon, nor pays attention when its leaders like the 2024 host, Italian Prime Minister Georgia Meloni, commits to “freedom, democracy and human rights,” and then proceeds to invite her fellow right-wing populist counterparts—India’s Narendra Modi and Argentina’s Javier Milei—to the summit. The fact is, the G7 is losing ground, rapidly. Other players have entered the game and are altering the rules. The BRICS is an international group made of Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. With China at the helm now, the Banque de France estimates BRICS own 35 per cent of the global GDP (in purchasing power parity). The IMF estimates the G7 retains about 30 per cent. More importantly, the BRICS are outpacing the G7 for share of GDP growth, at 16 and 14 per cent, respectively. At this rate, the BRICS are poised to replace the G7 hegemons of the global economy by 2028. The Canadian presidency in 2025 offers Trudeau a chance to reboot the G7 with honest stocktaking. NATO has never won a war—not in Iraq, Afghanistan, or in Ukraine. China is not about to vanish, nor is Russia. Europe, meanwhile, is embracing far-right xenophobia. These are the facts. Rote points about some “rules-based order” and issuing hollow resolutions won’t change them. Trudeau can take the G7 to a new policy outlook, one which uses peace and diplomacy and makes NATO the tool of last resort, not of first instinct. It will force the G7 to rely on negotiations, not threats of violence, to regulate the global economy. Done right, a paradigm shift could help it build goodwill with supplier countries and improve the quality of life around the globe. These suggestions present an idealistic view. The likes of Jens Stoltenberg will dismiss them as naïve and altruistic. It is what happens when a system loses its legitimacy. The fearmongers take over, which renders the system even more irrelevant. Finally it dies, just like Bretton Woods. Bhagwant Sandhu is a retired director general from the federal public service. He has also held executive positions with the governments of Ontario and British Columbia. The Hill Times

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G7 faces legitimacy crisis as new players gain influence

Trudeau can take the G7 to a new policy outlook, one which uses peace and diplomacy and makes NATO the tool of last resort, not of first instinct.

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