Excerpts from a recent article by Liam Halligan (Chief Economist at Prosperity Capital Management) in The Sunday Telegraph, “China, Brazil and India belong in the G8”
*** Excerpts Begin (emphasis mine) ***
It’s become fashionable to say the G8 is pointless. Last week’s summit of the “world’s advanced industrial democracies” was certainly an anti-climax.
After all the posturing, “working lunches” and “financial stability pacts”, the impotence of the leaders gathered on the Japanese island of Hokkaido was displayed for all to see.
Western shares kept tumbling. Crude hit another record high. As the smell of meltdown turned acrid last week, the markets seemed determined to stress the G8’s irrelevance.
Since the mid-1970s, the US, UK, Germany, Italy, Japan, France and Canada have held an annual summit. Russia has recently been added – grudgingly, because four G7 members depend on its oil and gas. Even with Russia, the G8 accounts for only 14 per cent of the world’s population, and less than 60 per cent of the global economy. And that share of worldwide output can only fall as the fast-growing emerging giants continue to outpace the West.
The likes of China, Brazil and India have churned out average annual growth of 5 to 10 per cent for many years now – an expansion rate that’s set to continue. In dollar terms, these countries are now the fourth, 10th and 12th largest economies on earth – and climbing fast.