To start with, my “G” doesn’t stand for globalization, it stands for the G-8, the leaders of the industrial powers, who are now meeting for their annual summit in Hokkaido, Japan.
They’re meeting in troubled times. The distributional issues of globalization–the fact that the benefits are shared extremely unequally–have finally come to the fore, especially now that consumers of the West are feeling the pinch from rising food and energy prices.
The public is in agreement about the inequality stemming from globalization. The Christian Science Monitor reports: “The majority of the public in 27 out of 34 countries surveyed said the benefits and burdens of economic change are not being shared fairly.”
The problem is not inequality per se. The problem is the global political risk associated with it. Expect electoral turbulence around the world, expect accelerated shifts in international relations, expect the Saudis and China to get more influence as the global role of the West comes under question.
In his Washington Post column, Jim Hoagland came down particularly hard: “The world that these leaders and their predecessors have promised for the past three decades is not today’s world of energy and food-price shocks, global financial irresponsibility, menacing climate change, and terrorist networks seeking weapons of mass destruction. The G-8 leaders — most of them disdained by their publics in these hard times — have failed, and they should accept responsibility.”
No wonder, then, that the UN Secretary General cautioned on the eve of the summit: “Never in recent memory has the global economy been under such stress.”
Some argue that the G-8 needs to be expanded to a G-20 to make the group more representative and thus assure better global management. Hoagland rightly suggests more focused economic management, centered around a G-3: US, EU, and Japan. But neither will be sufficient. The first will be impossible to manage; the other is out of touch with global shifts.
A forward-looking concept of economic management should balance representation, future outlook, and focused manageability. It’s time to think of a G-4: US, EU, China, and India. Fixing energy problems or financial excesses across borders, and battling climate change or global terrorists will all fail without the active involvement of the two most populous (and increasingly assertive) countries of the world.