How ‘Melodi’ is the flavour of G7, but apart from that there’s anxiety and uncertainty
Prime Minister of Italy Giorgia Meloni takes a selfie with Prime Minister Narendra Modi on the sidelines of the G7 summit, in Apulia, Italy on 14 June, 2024. PTI
The G7 is getting bad press, and that’s hardly surprising. Not one of the leaders assembling in Italy, barring Prime Minister Giorgia Meloni, is comfortably ensconced in their political seats. All are battling not just sheer unpopularity, but also economic shakiness amid the costs of war. Into this mess comes Prime Minister Modi, fresh into a third term, perhaps not quite as comfortable as before, but with the knowledge that his party still commands the largest majority in the country. No one else in Italy comes even close.
G7 leaders have worries
The Politico called it “more like the last supper” than a gathering of the most powerful leaders of the world. President Biden’s polls are lower than that of his boisterous rival Donald Trump, and his son has been convicted on gun charges, with sentencing due just a month before the presidential elections begin. UK’s Prime Minister Rishi Sunak and French Prime Minister Emmanuel Macron are on their last political legs, even as the far-right gains ground and legitimacy.
Germany’s Olaf Scholz faced a similar situation, securing just 30 per cent of the vote in recent European Union elections, while Japan’s Fumio Kishida’s approval ratings have fallen precipitously. Then there’s Canadian Prime Minister Justin Trudeau, who is calculated to have lead his party to a 50-year-low. He’s not coming back. Meloni’s party, the far-right Brothers of Italy, is the only one that has seen a comfortable surge in vote share.
The economic question
Keeping in mind that the G7 is an economic power grouping, it’s important to note that the economies of all but the US, and to a lesser extent Canada, are spluttering. While the UK has, for the first time, posted mild growth (1.7 per cent) as has Germany (0.3 per cent). However, the fact that the US is doing well, with a robust 8.7 per cent GDP growth, won’t endear it to Europeans bearing the brunt of the Ukraine war. The question of who will compensate Europe for this is critical. The proposal for a $50 billion loan—where Europe is the guarantor who takes all the inevitable risks, and the US then potentially uses the money for reconstruction through its firms—is one that is unlikely to take off.
The idea is to pay off the loan using frozen Russian assets—about $260 billion—much of which is held by the EU. However, the Ukraine issue has already severely divided Europe. Using assets that would probably have to be repaid under a future peace deal is not something a politically bruised Germany or France is likely to agree to. In Italy, Prime Minister Modi could hardly be blamed for subtly emphasising this point after disastrous EU elections. He observed that "more than 2,600 political parties, more than 1 million polling booths, more than 5 million Electronic Voting Machines, 15 million polling staff, and about 970 million voters—out of which 640 million people exercised their franchise.” These are mind-boggling figures, and very useful to remind a sometimes-judgmental audience what India is all about, and that a politically stable country is looking for investment.
The burning Ukraine question
On the (literally) burning Ukraine issue, India fortunately has no immediate stake, since the subject was not part of the G7 outreach. PM Modi did meet Ukrainian President Volodymyr Zelenskyy, though it is now clear that the prime minister is not attending the Switzerland ‘peace summit’. Russia, China, and naturally Pakistan, have already refused. Meanwhile, India has sent generous aid to Ukraine, apart from some 15 shipments of 117 MT tons of material. China has also sent aid, but what is concerning the G7 is its ‘non-lethal’ aid to Russia. An incensed NATO Secretary General Jens Stoltenberg observed that “90% of the microelectronics imported by Russia last year came from China including parts and electronic equipment essential for producing missiles, bombs, and combat tanks…” That’s a lot.
G7 leaders have rather strangely called upon China to stop this, even when they mean to issue a statement against Beijing for unfair trade practices. Meanwhile, Indian oil refineries have stopped accepting Russian crude oil, delivered by tankers operated by Sovcomflot, Russia’s largest commercial shipping company that has been sanctioned by the US. That’s a serious blow to Moscow’s economy. And to us. This war is hitting everyone.
Spares for much of the Indian Army’s equipment is still a critical issue, and co-production plans with Russia are stalling. But then, there’s no sign of that General Electric deal for engine production either.
Artificial intelligence
The actual pressing question for India is the future of artificial intelligence (AI). In an unusual gesture, devout Catholic Giorgia Meloni invited Pope Francis to address the moral issues of AI—a first for such an event. The Pope, rather sensibly, spoke of both the benefits and dangers of AI, condemning, for instance, the use of autonomous weapons, an issue already at the center of a heated debate on ethics in war. Interestingly, the Pope had more bilateral meetings than the UK prime minister, perhaps reflecting their respective global standing. For India, the immediate concern is the potential for AI to contribute to unemployment. A 136 per cent surge in tech layoffs is already apparent, often attributed to "cost-cutting" (read: AI), and more could come as coding skills—a key area for India—become increasingly automated.
Bilaterals are about investment
Prime Minister Modi's bilateral meeting with Italian Prime Minister Meloni proved particularly substantive, covering topics such as the forthcoming visit of the Italian aircraft carrier ITS Cavour and training ship ITS Vespucci. This suggests potential interest from the Italian defence industry. The big news in the defence industry is Russia's gradual withdrawal from a highly lucrative market. Less noticed, but hugely important, was the memorandum of understanding (MoU) on intellectual property rights (IPR), which provides a framework for cooperation on patents, designs, and trademarks. This agreement forms a cornerstone for further business-to-business (B2B) cooperation.
The bilateral meeting with Japan was brief but reiterated the promise of a targeted five trillion-Yen investment in India between 2022 and 2027. Japan entered a ‘technical recession’ last year, and with falling private consumption, rising interest rates, and inflation, economic challenges are likely to persist. However, investing in India could help bolster Japan's economy. No one is talking about charity.
s the prime minister returns home, the deliverables from the summit may not be immediately tangible. However, India's presence on the world stage, its continued economic growth, and its political stability are all attractive features for those seeking investment destinations.
Meanwhile, though the G7 leaders may be on the back foot, their economies remain central to global stability and decision making. A place even at a (side) table is important, to shore up India’s growing signature on a global stage that is badly in need of stability. Meanwhile, the Chinese press is lapping up a statement by Senator Lindsey Graham that Ukraine holds some $12 trillion in strategic minerals that the US cannot afford to "lose" (to others). There’s obviously more to the war in Ukraine than just exhausting Russia. Beijing, for its part, has no intention of letting the US off the hook in Ukraine and allowing it to shift its focus to the Indo-Pacific. Indian commentators have repeatedly emphasised this point to visiting delegations, though seemingly to no avail.
It is imperative for all parties involved—both the G7 and outreach countries—to engage in dialogue and establish shared priorities. The current trajectory suggests a dangerous downward spiral with no end in sight.
The writer is a Distinguished Fellow at the Institute of Peace and Conflict Studies, New Delhi. She tweets @kartha_tara. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.