Connect with us

Hi, what are you looking for?

The Embassy

G7 & Global South: Time for Realism not Rhetoric

G7 Leaders’ Visit to Itsukushima Shrine
G7 Leaders’ Visit to Itsukushima Shrine. Image is Creative Commons.

The Global South occupies a crucial battlespace in the global contest that pits the United States and the free world against the China- and Russia-led axis of autocracies. The trend is headed in an unfavorable direction. The Global South’s attitudes toward Russia in the face of Western sanctions have ranged from ambivalence to empathy. An overwhelming majority of Global South nations has closer commercial relations with China than with any individual member of the G7. 

Japan, attuned to the trend, has prioritized engaging the Global South as it hosts the upcoming G7 Summit in Hiroshima. It is imperative that the G7 corrects the course of its relations with the Global South. 

Fundamental Oversights

The Global South’s disillusion with the G7 comes from two basic mistakes. First is the G7’s inability or unwillingness to appreciate and prioritize the economic aspirations of the demographically young nations of the Global South. Second is the unending sermons most G7 members direct at Global South nations concerning social, cultural, and environmental issues. To course-correct, G7 nations individually and collectively need to help facilitate the economic evolution of the Global South and show considerably greater humility in their advocacy for progressive societal attitudes and social norms. The Global South, evoking Aretha Franklin’s famous refrain “R-E-S-P-E-C-T,” is interested in more turkey and fewer sermons.  

G7 nations first and foremost should commit to meeting the economic aspirations of the Global South, thus convincing it that the best path to prosperity lies with the G7. The rules-based economic order remains the optimal course to sustained prosperity, though it needs updates. The G7 should signal substantive investments in foundational economic sectors where it enjoys comparative advantages over its adversaries – the digital economy, energy security and transition, financial markets, and quality infrastructure. 

A Series of Advantages

Binding the digital economies of the Global South to those of the G7 should be the highest priority. The G7 is well poised for an ambitious expansion of Cloud connectivity to reach every last mile across the Global South. The aspirational youth of the Global South would be drawn to Cloud connectivity served with data centers linked by marine cables and aided by satellites to reach remote areas. China is playing catch-up in Cloud connectivity, other than in Southeast Asia, and Russia does not feature in the sector at all.  

Similar to Cloud connectivity, the G7 enjoys considerable advantages in offering energy accessibility and security to the Global South. China is a net energy importer, and Russian energy is limited by sanctions. The G7 and its friends should focus on bringing natural gas, nuclear, and clean-coal supplies to meet the pressing energy needs of Global South nations, while helping them develop domestic renewable-energy capacities.  

A Matter of Investment

Collectively, the G7 constitutes the largest source of funds directed toward quality infrastructure across the Global South. This support is considerably more than the fuzzy numbers touted by the Chinese Belt and Road Initiative. The G7 should boldly point out this fact and build upon it by mobilizing greater private investment in infrastructure across the digital, energy, and transport sectors. A key catalyst in attracting greater private investment to the Global South would be to help build its nations’ capital markets to be able to receive the funding. 

At Hiroshima, the G7 might give greater structure to its Partnership for Global Infrastructure and Investment initiative, which was launched in 2021 to directly address the economic concerns of the Global South. The initiative’s goals may be achieved by establishing three regional Infrastructure & Investment Funds (IIFs) of $100 billion per year for the Indo-Pacific, Africa, and Latin America & Caribbean regions in order to leverage private investment.The G7 should meanwhile persuade the regional multilateral development banks – Asian, African, and Inter-American – to apportion the necessary funds toward their respective regional IIFs. The regional IIFs, with diligence and matching funds, can leverage between $500 billion and $1 trillion in private capital for quality infrastructure in the three regions. This would be a substantive effort to the mutual benefit of the G7 and the Global South.

Regional IIF investments should come attached to the highest levels of financial transparency, and thus advance the rules-based economic order. Areas of mutual economic interest such as digital, energy, critical minerals, strategic infrastructure, and the like should be the highest priorities. The IIFs, properly executed, would return the best possible dividends in the global transition to a greener economy. 

Humility Is Key

While prioritizing the economic aspirations of the Global South, the G7 need not shirk its advocacy of greater individual freedoms and dignity. Rather, it should calibrate its appeals to actually achieve the desired outcomes and advance collective national interests. 

Japan, as one of most credible and pragmatic members of the G7, is most attuned to Global South sensibilities. It is also emerging as an ardent guardian of a rules-based order, and it happens to be one of the largest yet quietest investors in quality infrastructure across the Global South.

As Japan hosts the G7 summit this weekend, it has an opportunity to accord due respect and realism in resetting G7 relations with the Global South. The eventual aim is to bind the Global South economies to those of the G7 and like-minded nations — far more tightly than they are linked to the China-Russia axis of autocracies. Japan should ensure that the G7 seizes the moment.

Kaush Arha is the president of the Free & Open Indo-Pacific Forum and a senior fellow at the Krach Institute for Tech Diplomacy at Purdue and at the Atlantic Council.

Written By

Kaush Arha is the president of the Free & Open Indo-Pacific Forum and a senior fellow at the Krach Institute for Tech Diplomacy at Purdue and at the Atlantic Council.