Tuesday, June 5, 2012
Is G8 relevant anymore?
Recently the usual G8 meeting was held. You know the G8, the group of the most industrialized countries plus Russia ( I don’t know why they have to invite Russia since it is not that industrialized). My point here is that this G8 is becoming irrelevant day by day since it does not involve the fastest economy (No.2 in the world) China, nor the fast rising India and Brazil. Although G8 can be called industrialized but the name now should include also the most heavily indebted countries of the world who are increasing beholden to fast rising economies. Even if they want to set the agenda, the markets are not taking them at face value, since the political will along with financial constraints are lacking. Many of these G8 countries could become irrelevant and their influence diminished as other now developing countries achieve faster rate of growth with more population growth and more savings. The G8 countries populations are declining and their senior population is increasing putting more burdens on the working population and the government. The social welfare schemes are coming under increasing stress due to resource constraints. This has put the industrialized countries in severe debt and they cannot keep on piling debt without drastically scaling back their welfare structure or increase immigration to lower their cost of production. But I don’t see this happening and as such in the coming years the meetings of G8 will become a big Yawn like the Warsaw pact of the cold war era.