By Marco Overhaus

The violent protests against this week's summit of leading industrialized countries and Russia (G8) in Heiligendamm have partly drowned out the more constructive criticisms raised by a range of societal organizations (leftist parties, environmental-, development- and church organizations), according to which the G8 lacks legitimacy and transparency to make far-reaching international decisions. Yet, contrary to the claims of these peaceful protesters and opponents, the "Group of Eight" remains a crucial and widely accepted forum of global governance, even though it is in need of profound reform. Most significantly, it has to streamline its agenda, change its public perception from being an exclusive "group" towards being a more inclusive "process" and integrate its work better with existing international organizations. All of these items, including the process of "reaching out" to developing countries, have been under discussion for some years. The German presidency has also formulated its reform ideas, but these still have to be carried much further.

While only representing 14% of the world population, the G8 - consisting of the USA, Canada, the United Kingdom, France, Germany, Italy and Japan; Russia is included politically, but is excluded from most of the economic deliberations - is initiating policies and setting standards which affect most other countries and people in the international system. To be sure, these industrialized countries have their own interests in mind, but they also have the potential to offer public goods for global governance which others would not be able to provide. After all, they still represent two-thirds of the world economic output, one-half of world trade and three-quarters of development assistance worldwide. They are also the largest net financial contributors to the United Nations. In that sense "might still matters", even if the G8 does not meet the ideal-type of representing the international "community of states". Dealing with global trade imbalances and providing transparent financial markets is in the interest of the industrialized countries just as it is in the interest of the developing world. Moreover, in recent years the G8 has put many issues on its agenda which are specifically designed to address the downsides of globalization, mostly with a view to Africa. The creation in 2001 of a "Global Fund to Fight Aids, Tuberculosis, Malaria" or the decisions on multilateral dept relief 2005 in Gleneagles are often cited as positive examples. The problem sets in, however, if the industrialized countries fail to deliver on their own promises, thus undermining their and the G8's credibility. As things stand now, the G8 leaders will be unable to agree on concrete and binding measures to reduce carbon-dioxide (CO-2) emissions, even though climate change has been identified as a major global threat. In 2005, G8 leaders also pledged to double their development assistance by 2010. A recent report of the OECD concludes that this plan runs far behind schedule which is also true for the "Millenium Development Goals" of the United Nations.

Another serious problem is the erosion of the political and economic power of what is still referred to as "the West". When the G7 met for the first time near Paris in 1975, their economic and political predominance in the international system was still rather clear. Today, we witness a fragmentation and diffusion of international power which accompanies globalization. The multiplication of state and non-state actors, the diversification of interests and an increase in regional and global economic and social exchanges render today's world much more complex. Emerging economic powers such as China, India and Brazil are increasing their share of world trade and economic output and are demanding their share of influence in international governance. Expressions such as the "New Geography of International Trade" or the "Shifting Power Equation" (this year's motto of the World Economic Forum in Davos) try to capture these changes. Leaders of the old industrialized world recognize this, such as Chancellor Merkel when, speaking in Davos and citing Thomas Friedman, she referred to the world becoming increasingly "flat". As a reaction, the G8 - led by the British government under Tony Blair - initiated its "outreach"-policy to include the emerging economies (China, India, Brazil, Mexico) as well as African developing countries more systematically in the summit deliberations.

It is important to note that fragmentation of power does not abolish the need of international leadership. In the long run, the G8 might adapt to the dispersion of international power by enlarging to a G13 or G15 format. In the short to medium term, however, there is no alternative coalition able and willing to fulfil the functions of the current G8. This was again illustrated during last week's Asia-Europe Meeting (ASEM) when the Chinese foreign minister, supported by the Indian delegation, declared that the rich countries of the northern hemisphere should shoulder most of the burden of climate protection measures. This statement does not indicate that China is willing to assume a leadership role in an area where it will become an increasingly important factor in the future.

TA final problem of the current G8 group is its overloaded agenda and its proliferation of "Action Plans" in many fields. This contributes to unrealistic expectations, enhances the lack of accountability and hollows out existing international bodies. The provision of leadership and resources by the industrialized countries to deal with the downsides of globalization will have to be better integrated in the existing institutional structures which were created for dealing with these issues. The World Health Organization (WHO) is the proper place to fund programmes against the spread of deadly diseases and the International Atomic Energy Agency (IAEA) has the legitimacy and competence to deal with nuclear non-proliferation. The same is true for the specialized UN agencies and programmes in the area of environmental protection, water management and biodiversity. The G8 should instead focus on those issues where there is still a lack of global governance: managing the risk of global trade and fiscal imbalances, improving the transparency of financial markets as well as the conditions for international investments, and climate change policy among a few other things.

When preparing and implementing its chairmanship of the G8 this year the German government has proposed (and partly implemented) a few sensible solutions to some of the problems just outlined. While rejecting calls to expanding the club, Merkel and her Foreign Minister Frank-Walter Steinmeier continued the so called "outreach"-process which had already been practiced by previous G8 summits and presidencies. This week in Heiligendamm, leaders of China, India, Brazil, Mexico and South Africa as well as from African countries (Egypt, Algeria, Nigeria, Senegal, Ghana) will be taking part in the summit deliberations. Berlin also seeks to push the process further in what it calls the "Heiligendamm Process", thereby meaning the institutionalization and formalization of the dialogue between the G8 and other players ("G8 Plus").

Moreover, the government is seeking to refocus the G8 agenda to economic and financial policy issues while still keeping Africa and climate protection high on the agenda. Earlier this year, Bernd Pfaffenbach, the chief negotiator ("Sherpa") of Chancellor Merkel, put it this way: "We want more to go back to the roots of the World Economic Summit as it was previously known", added Pfaffenbach. "We're concerned with the problems of the global economy." ¹ The Heiligendamm Process shall also help making the agenda of future G8 summits leaner while improving the interaction with other international institutions. According to this scheme, the "G8 Plus" format is to function as an initiator of an "issue-oriented dialogue" which would then be transferred into the relevant international organizations which enjoy a broader membership base and mandate.

The parallel processes of globalization and fragmentation of the international system has increased rather than diminished the demand of effective global leadership of the most potent countries. Currently, the "Group of Eight" is still the best show in town, even if it will have to adapt to the changing context and reform accordingly. Most notably, it needs to trim its agenda by delegating more leadership and resources to existing institutions and change the public perception from being an exclusive "group" towards being a more inclusive "process". Chancellor Merkel and her foreign policy team have already proposed sensible measures to this end. These now have to be made more concrete and extended to other reform areas not yet covered. The Heiligendamm Process to streamline the G8 agenda and transfer more of the dialogue with other countries into existing international institutions is a step in the right direction, but it is still a timid one. The inclusion of other organizations needs to be more specific. In general, the G8 should refrain from launching new Action Plans in many areas and instead focus on their responsibility within such organisations as the WHO, the IAEA or the UN Environmental and Development Programs. It is sometimes argued that international institutions are not working effectively or are absent altogether. Yet, quite often the problems derive from the leading powers' unwillingness to support these institutions more forcefully. A change of attitude on the side of the industrialized countries would also confer more legitimacy and inclusiveness to their policies.

Strengthening the G8 as an inclusive process also implies a more visible dialogue with relevant non-governmental organizations and other non-state actors, such as multilateral corporations. This is an area where much more needs to be done. The perception of the G8 as mega-summits behind fences is surely not helpful. Finally, the G8 forum would benefit from more accountability even as regards a trimmed agenda. Every year, the "G8 Research Group", an academic think tank at the University of Toronto, publishes its "compliance reports" of the group and its members. The up-grading of this endeavour and possibly its implementation by an independent high-level body (such as the UN General Assembly) would not only make the industrialized leaders more accountable. It would also contribute to the transparency of a group of countries which remains a crucial leadership forum in a globalizing world.

The author is project manager of "Deutsche-Aussenpolitik.De" and research fellow at the Chair for International Relations at the University of Trier.