As world leaders depart Pittsburgh, Foreign Policy explains how the G-20 came about and how the G-8 became obsolete.
So much for the G-8.
At the Pittsburgh G-20 summit, most discussion focused on trenchant issues such as the global financial recovery, climate change, and revelations about Iran’s nuclear program. But still, U.S. President Barack Obama made headlines by announcing the consortium of the world’s 19 biggest trade economies plus the European Union will supplant the more selective G-8, as the global go-to group on international economic issues.
Emerging-world powerhouses China, India, and Brazil applauded the decision. But the announcement also demonstrated that chatter about which countries are and aren’t included in a given summit — which countries participate and which countries can only “observe” — often has too prominent a role in the summit itself.
Indeed, Obama’s warm, wide arms can’t hide a brutal social truth. The 36-year history of the Gs — starting with the “Library Group,” and ending, for now, with the G-20 — is the story of global economic and financial policy. But it’s also the story of vicious Mean Girls-type exclusion for any country whose trade volumes, GDP growth, and politicking can’t hack it.
Here is how the in-crowd has evolved.
George Shultz testifying at a hearing.
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1973: In the wake of the oil crisis and devaluation of the dollar, U.S. Treasury Secretary George Shultz invites finance ministers from Britain, Japan, France, and West Germany to Washington to discuss policies on international trade and economics. This secretive “Library Group” continues to meet periodically.
From left to right, German Chancellor Helmut Schmidt, U.S. President Gerald Ford, and France’s Valery Giscard d’Estaing meet in Helsinki in the summer of 1975, shortly before the creation of the G-6.
1975: In November, French President Valery Giscard d’Estaing hosts the finance ministers of the “Library Group,” plus Italy, in a castle outside Paris. A French statement diplomatically reports that the countries “consider it their duty to consult among themselves to assure a sustained growth rate for their own economies, and, in cooperation with other countries, greater world prosperity.”
But already, other countries are feeling left out of the closed-door talks on topics such as inflation and trade. World Affairs notes, “Although Canada was not mentioned in the announcement, U.S. officials said it was also expected to attend.” (It did, though just as an observer.) This November meeting establishes the G-6. The countries agree to meet with developing countries in December.
Alan Greenspan holding his head during congressional testimony.
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1976: Alan Greenspan, then the chair of U.S. President Gerald Ford’s Council of Economic Advisers, suggests another economic summit of the G-6 countries. The meeting is held in Puerto Rico during the run-up to the Ford-Carter presidential contest.
Latecomer Canada knocks at the door again and officially joins the group, which becomes the G-7. But the original G-5 finance ministers continue to meet without anyone else. And, in 1977, The Economist suggests opening the summits up to more middle-income and developing countries, with the headline, “A summit for only seven?”
James Baker stands with former U.S. Presidents Jimmy Carter and Gerald Ford.
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1985: Despite the growing of the G-5 to the G-7, and the increasing frequency of calls to expand the group, the original members continue to meet alone.
This year, after heated discussions at New York City’s famed Plaza Hotel, U.S. Treasury Secretary James Baker convinces the other G-5 finance ministers to help him in depreciating the dollar. This “Plaza Accord” is hailed as one of the most important international agreements to emerge from the high-level economic summits. The Washington Post describes it as an “unprecedented display of international harmony.”
The G-5 also bands together to help stop the burgeoning developing-world debt crisis. Three weeks after the meeting, Baker announces a $29 billion loan plan.
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1987: Over the course of 1986, the G-5 finance ministers repeatedly discuss in private the sustained economic turbulence due to the declining value of the dollar. This angers Italy enough to make its trade minister boycott the official G-7 summit in February 1987. (Apparently Canada didn’t mind as much.)
The cabinet-level ministers meet in Paris to debate and eventually sign the “Louvre Accord” — after the building which houses the museum and, at the time, the French Finance Ministry. It puts in place measures to stop stabilize the value of the dollar.
British Prime Minister Tony Blair, Japanese Prime Minister Ryutaro Hashimoto, German Chancellor Helmut Kohl, Russian President Boris Yeltsin, U.S. President Bill Clinton, French President Jacques Chirac, and Canadian Prime Minister Jean Chretien meet in 1997.
Tim Brakemeier / AFP/ Getty Images
1994: Russia, which had been one of the “observer nations” to the various G-groups’ summits, participates in a meeting of the G-7 in Naples, Italy. This consortium is, somewhat awkwardly, called the G-7+1.
Russia had gone through a highly rocky transition from a planned to a free-market economy, with a plunge in economic well-being and hyperinflation. Still, the former Soviet outsider promised to become a central player in Europe, given its ample commodity reserves. Thus, in 1998, in Birmingham, England, the G-7 agreed to let Russia in, and the G-8 was officially born.
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1999: At a 1997 summit in Vancouver, U.S. President Bill Clinton creates the “Willard Group” (also known as the G-22) — the G-8, plus 14 developing countries.
Summit fever leads, in 1999, to the creation of the G-33: a working group of the G-22 plus even more developing nations. But it has a short life. G-8 ministers scotch the whole-world approach and create the G-20, which meets for the first time in Berlin in March. The group attempts to deal with the collapse of the Asian market and ensuing economic crisis in Russia. The European Union, independent of its constituent countries, also wins a spot at the table.
In the coming years, the G-20 continues to meet with regularity to discuss economic issues. (The G-8 does as well.) Member-nations come and go — but the group sticks with the moniker “G-20” to avoid confusion.
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Recent years: G-8 and G-20 memberships remain politicized — and gossipy.
In 2008, U.S. Senators John McCain and Joe Lieberman call on the United States and other G-8 countries to expel Russia as punishment for its military incursion into Georgia. Lieberman, an independent on the Senate Armed Services Committee, says, “We’re not going to let Russia, so soon after the Iron Curtain fell, to again draw a dividing line across Europe. It is simply unacceptable.”
A year later, shortly before the G-8 summit in L’Aquila, Italy, ministers from several countries reportedly call for the suspension of, well, the host country. The United States had taken over the “Sherpa calls,” the telephone meetings before the summit, and determined that the main topic of discussion would be aid to poor countries. One unnamed official told The Guardian, “[This] is just unprecedented. [The U.S. calls are] a nuclear option. The Italians have been just awful. There have been no processes and no planning.”