Some years ago the world's richest countries, known as the G7, grudgingly acquiesced to open their annual meeting room doors to accommodate twelve other nations in a separate session. Already operating without China, currently the second largest economy in the world, and Russia, they could see the writing on the wall. Whatever military clout they might have, they knew they were staring at an economic morass.
The pandemic and the Ukraine war has left the United Kingdom, France, and Italy staring at massive budget deficits impacting on pensions and pay-rises. Germany, the ever reliable economic power-house has too, been shifting uncomfortably.
Yet, in a strange, convoluted way, the European Union also finds a permanent seat at G7 meetings. This, in spite of a visible cold-shoulder exhibited to Ursula Van der Lyon when she accompanied Emmanuel Macron to China. All stops were pulled out for Macron, but not so for Ms Lyon -- least of all because she didn't represent a state.
There were sixteen seats in the summit to accommodate India, Brazil, Vietnam, Indonesia, Australia,South Korea, Comoros and Cook Island. If it appears to be a quizzical combination it was meant to be. Future economic powers, enticing markets, political arm-wrestling and inclusiveness of Africa and Pacific Islands all went into the pot.
The G7 continues its fatal path down the anti-China route where it is crystal clear rapprochement as opposed to being at loggerheads in what can work. China has issued a structure to Japan for allowing the anti-China smear campaign to be spewed from its territory. Historical disagreements aside, Japan has in its quiet way been disillusioned by G7 progress or lack of it.
Post Brexit the EU had signed amid fanfare, long term agreements to offset loss of British funds and trade. Not much has been heard of it since. The UK that exported 30% produce to the EU are desperately trying to claw back a treaty for favourable terms.
For all the bonhomie, some things didn't change, not even with Volodomir Zelensky being a special invitee. India stuck to its “non partisan” stand, and stayed clear of directly confronting China while other voices were essentially muted. India has cast its stake in the sand by not inviting Zelensky to the G20 it will host. China and Russia will be notable absentees there.
Somehow the coffee has been spilt. The EU,UK. and the US continue to put billions in Ukraine, the latest being the massive concession of providing F17 fighter jets. It's a bottomless contribution that other countries such as Australia and Japan have not committed to. Realization has dawned that taking NATO closer to Russia is a flawed endeavour. Neither side can afford to lose.
Matters may have been different if the economic malaise had not been so overpowering. Electorates are grumbling at apparent government nonchalance at ironing over their troubles. It can only be a matter of time before they question all the money that's being wrung out of their countries.
In the midst of it all under-developed and developing countries look westwards for investment and much needed support. Here too, strange games are at play. India continues to be one of the largest recipients of World Bank loans. Sri Lanka, having ducked bankruptcy courtesy an IMF loan wants to invest in Bangladesh. A little over a year ago they borrowed $200 million and were given a six month extension to pay back -- now scheduled for September. The Maldives also want to invest even though there had been rumours that they too, wanted a loan from Bangladesh. Pakistan is another sub-continent country wallowing economically.
IMF loans come with taut strings attached. That includes sufficient reserves of foreign currency. Bangladesh applied for a substantial loan as a matter of comfort for the economy. From next year, payback of a host of previous loans kick in. It's all supposed to be made up by more remittances, ambitious exports, and removal of subsidies that will hit across the spectrum. It raises the concern that while check-mating games are being played out, the clouds of collateral damage are looming.
Mahmudur Rahman is a writer, columnist, broadcaster, and communications specialist.
