G7 France, The Biarritz Summit

AUGUST 2019 | G7G20SUMMITS.ORG

Fighting inequalities

The French presidency promises equality and parity in all spheres

A renewed format

African leaders and key regional partners take a seat at the table

Stronger democracies

Global security challenges require joint responses to advance prosperity

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Publisher: Khaled Algaay Director: Tom Kennedy Co-Editor: John Kirton Co-Editor: Madeline Koch Managing Editor: Emily Eastman Art Director: Steven Castelluccia Contact: 20-22 Wenlock Road, London N1 7GU, United Kingdom Tel: +44 207 6085137 Email: Connect@globalgovernanceproject.org @GloGovProj www.globalgovernanceproject.org G7 Research Group Contributors: Alecsandra Dragus Hélène Emorine Angela Min Yi Hou John Kirton Ella Kokotsis Julia Kulik Maria Marchyshyn Duja Muhanna Chiara Oldani Julia Tops Alissa Wang Brittaney Warren Meredith Williams Maria Zelenova

Produced and distributed by The Global Governance Project, a joint initiative between GT Media Group Ltd, a publishing company based in London, UK, and the G7 Research Group based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. www.g7.utoronto.ca

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G7

France The Biarritz Summit

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Contents

LEADERS’ VIEWS

GUEST LEADERS' PERSPECTIVES

EDITOR’S INTRODUCTION

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IN PURSUIT OF GLOBAL EQUALITY France’s President Emmanuel Macron outlines the agenda for the Biarritz Summit

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MILESTONES AND AMBITIONS FOR A UNITED WORLD Canadian prime minister Justin Trudeau shares Canada’s achievements and goals in the context of the G7

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LEADING THE EFFORT TOWARDS A MORE EQUAL WORLD Italian prime minister Giuseppe Conte says delivering a better world means shaping a fairer, more equal global society

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INCLUSIVITY: THE KEY TO A FAIR FUTURE FOR ALL Jean-Claude Juncker, president of the European Commission, calls for a united front in the face of protectionist, nationalist policies that reinforce existing inequalities G7G20SUMMITS.ORG

THE COMMON CHALLENGE WE FACE Scott Morrison, prime minister of Australia, a participant in this year’s summit, advocates for trade liberalisation to underpin economic success and a strengthened trade system

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PROSPECTS FOR THE BIARRITZ SUMMIT John Kirton, director of the G7 Research Group, covers the agenda and likely outcomes of the G7 Biarritz Summit

SPOTLIGHT ON BIARRITZ

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GLOBAL GOOD FROM THE NEW WORLD ORDER Chile’s President Sebastián Piñera E. considers the challenges and opportunities of the approaching next decade, from action on climate change to the digital revolution

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AFRICA AND THE G7: A PARTNERSHIP FOR PROGRESS As the G7 seeks deeper engagement with Africa, Abdel Fattah El-Sisi, president of the Arab Republic of Egypt and chair of the African Union, shares the rapid progress and significant potential of this vast continent

SHARED CONCERNS FROM LA NOUVELLE-AQUITAINE AND BEYOND President of the Regional Council of NouvelleAquitaine Alain Rousset calls on leaders to act on environmental issues

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TOWARDS GENDER, EDUCATION AND HEALTH PARITY

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G7 PERFORMANCE ON GENDER EQUALITY Julia Kulik, director of research, G7 Research Group, shares the data and factors that drive higher compliance in this area, from specific targets to ministerial meetings August 2019 — G7 FRANCE: THE BIARRITZ SUMMIT

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Contents 32

EQUALITY IN THE LAW United Nations undersecretary-general and UN Women executive director Phumzile Mlambo-Ngcuka reports on the dual forces that affect progress on gender equality in the law

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G7 PERFORMANCE ON EDUCATION G7 Research Group research analyst Alecsandra Dragus on which catalysts the G7 should employ for greater action on education

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HER EDUCATION, OUR FUTURE UNESCO director-general Audrey Azoulay outlines a new initiative that fast-tracks action on girls’ and women’s education and enables them to play a transformative role in society

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G7 PERFORMANCE ON HEALTH Duja Muhanna, research analyst, G7 Research Group, shares the data on health

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G7 PERFORMANCE ON CLIMATE CHANGE Brittaney Warren, director of compliance and lead researcher on climate change, G7 Research Group, finds that environmental commitments have waxed and waned over the years, but sustained action is vital to control the climate crisis

commitments and compliance, and what is needed to achieve universal health coverage

BRIDGING THE GENDER AND HEALTH DIVIDE Tedros Adhanom Ghebreyesus and Senait Fisseha of the World Health Organization on why universal health coverage requires gender-responsive health systems

SMART INVESTMENTS SAVE LIVES Eliminating HIV, tuberculosis and malaria is within reach, but getting there requires concerted action – and more money, says Peter Sands, executive director, Global Fund to Fight AIDS, Tuberculosis and Malaria

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AT THE INTERSECTION OF CLIMATE HEATING AND HEALTH The link between extreme weather and regional health security is most conspicuous in the Caribbean. C. James Hospedales, formerly with the Caribbean Public Health Agency, says coordinated action is needed

The world demands more energy.

OUTLOOK ON THE ENVIRONMENT

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THE GREEN ECONOMY TRANSITION United Nations Environment Programme executive director Inger Anderson calls for holistic thinking and conscious decision-making for a fairer world

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G7 PERFORMANCE ON ENERGY Ella Kokotsis, the G7 Research Group’s director of accountability, considers whether the G7 can fully utilise clean energy as a key driver of jobs and growth without the collective support of all seven leaders

The world demands less carbon.

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BIG AMBITION, BIG REWARD Francesco La Camera, director-general, International Renewable Energy Agency, says renewable energy can bring broad benefits

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G7 PERFORMANCE ON BIODIVERSITY Angela Min Yi Hou, co-chair of summit studies, G7 Research Group, finds that more commitments equals more compliance when it comes to biodiversity

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BOLSTERING BIODIVERSITY UN Biodiversity’s Cristiana Paşca Palmer says G7 leaders should embed biodiversity indicators, incentives and investments in policymaking

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G7 PERFORMANCE ON OCEANS Hélène Emorine of the G7 Research Group analyses the G7’s past performance on oceans to draw lessons on how Biarritz can respond to the ocean crisis

Can the world have both?

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ACTION ON OCEANS Atsushi Sunami, president, Ocean Policy Research Institute, the Sasakawa Peace Foundation, says initiatives to transition to a fully regenerative, sustainable ocean economy demand collaborative work

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EQUITABLE TRADE, TAX AND DEVELOPMENT

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G7 PERFORMANCE ON TRADE Maria Marchyshyn, lead researcher on trade, G7 Research Group, shares the data on trade commitments and compliance and calls for trade to be utilised for more inclusive growth

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G7 TRADE POLICY IMPERILS THE BEST JOBS Professor of international trade and economic development Simon J. Evenett on why honest appraisal of and action on trade-distorting subsidies are required

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REIGNITING INVESTMENT FLOWS UNCTAD secretary-general Mukhisa Kituyi calls on leaders to rekindle global investment in support of the Sustainable Development Goals

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TAX SPILLOVER ASSESSMENTS: AN IDEA WHOSE TIME HAS COME Professors Andrew Baker and Richard Murphy outline a new framework for carrying out fairer assessments of global tax systems

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G7 PERFORMANCE ON DEVELOPMENT Julia Tops, co-chair, summit studies, G7 Research Group, looks at the G7’s action on development since its inception

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THE POWER OF TOGETHERNESS An interview with the United Nations Development Programme’s Achim Steiner, who shares what can be achieved when the world unites to overcome individual issues

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Contents 84

FINANCING DEVELOPMENT As the World Bank Group sharpens its focus on comprehensive economic and social improvements, its president David Malpass details the programmes under way that target shared prosperity and seek to surmount challenges that stunt opportunity

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OPPORTUNITIES FOR INNOVATION

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G7 PERFORMANCE ON DIGITALISATION With combating inequalities high on the agenda, Meredith Williams, a lead researcher with the G7 Research Group, says the G7 should do more to make sure everyone benefits from the technology revolution

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THE WORKPLACE EQUALITY CHALLENGE Guy Ryder, director-general, International Labour Organization, highlights the gaps that must be bridged to ensure decent work for all

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INCLUSIVE ECONOMIC INVESTMENTS

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G7 PERFORMANCE ON MACROECONOMIC POLICY Alissa Wang finds that although the G7 started as an economic summit, its focus on macroeconomics has markedly declined

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GLOBAL GROWTH FOR GLOBAL GAIN An interview with Angel Gurría, secretarygeneral, Organisation for Economic Co-operation and Development, on equality, the economy and digital transformation

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OUTLOOK ON THE GLOBAL ECONOMY Robert Fauver, former US G7 sherpa, shares in this interview his perspective on the global economy – from what is making it tick to short- and long-term threats to growth

This simple banana peel inspired a bold idea.

To turn trash

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PREVENTING THE NEXT FINANCIAL CRISIS Professor of economics Chiara Oldani explains how the rapid uptake of non-traditional banking services could prove a threat to global financial equilibrium

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PROMOTING PEACE AND SECURITY

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G7 PERFORMANCE ON REGIONAL SECURITY IN THE MIDDLE EAST When it comes to security in this region, more commitments do not equal greater compliance. Maria Zelenova, research analyst, G7 Research Group, shares the data

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THE DIGITALISATION OF CRIME – AND LAW ENFORCEMENT Europol executive director Catherine De Bolle says we must pool our resources and expertise in an increasingly complex and transnational security landscape

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NO BORDERS IN CYBERSPACE Chancellor’s professor Fen Osler Hampson explores the measures available to address false information, market dominance and poor transparency in the online world

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RESTORING TRUST IN THE ELECTION PROCESS Senior research professor Christopher Sands on how governments are defending democracy in the face of foreign hacking and viral disinformation campaigns

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COOPERATION FOR A SECURE EUROPE Aurel Braun, a professor of international relations and political science, says the G7 must persevere in building strategic stability

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ALL EYES EAST With the greatest threats to global peace and security today coming from East Asia, David A. Welch says it’s time for the G7 to step up on security in the region

Into jet fuel.

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PARTNERSHIPS WITH AFRICA

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G7 PERFORMANCE ON AFRICA A more inclusive format regarding Africa has driven higher compliance and produced clearer commitments, finds Brittaney Warren, director of compliance, G7 Research Group

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AN IMF THAT WORKS FOR AFRICA Professor of international development law and African economic relations Daniel D. Bradlow argues that IMF reforms should begin with better African representation and an end to its Euro-centric leadership

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SYNCHRONICITY FOR AFRICA AND THE G7 Elizabeth Sidiropoulos, chief executive, South African Institute for International Affairs, says engagement with Africa requires facing up to inequalities that erode growth and development

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A STRONGER G7 SYSTEM

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THE RISKS OF A RENEWED FORMAT London School of Economics’ Tristen Naylor on why the G7 must tread a fine line between being more inclusive and participatory, and upholding the group’s value and unique position in the overall global governance landscape

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FRANCE IN FOCUS The G7 Research Group’s Hélène Emorine considers the central role France has played in championing international cooperation for a more inclusive G7

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IN DEFENCE OF GLOBAL GOVERNANCE Jan Wouters of KU Leuven considers how an agenda with multilateralism at its core is easing communication of the European Union’s message of defending the rules-based order

We see possibilities everywhere.

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keep advancing

LEADERS’ VIEWS

Emmanuel Macron President, France

In pursuit of global equality

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he fight against inequalities will be the priority of France’s G7 summit presidency in 2019.…

We must tackle inequalities of destiny. It is a moral aberration as much as a reality which is untenable. It is unacceptable not to enjoy the same opportunities depending on the country you are born in, not to be able to go to school in some countries because you are a woman, not to have access to certain basic care.

EDUCATION …The Global Partnership for Education’s Financing Conference in Dakar in February [2018] raised $2.5 billion to develop access to education in the world. It is a historic sum.

France increased its contribution tenfold.

The active efforts the G7 [had] already begun to make under Canada’s presidency will have to allow further progress.

We are at a watershed on this issue, during which we will be able to grasp the full extent of the challenge facing us, or not. Six hundred and twenty million more children in the world need to be provided with schooling between now and 2030, including 444 million Africans. Are we going to give ourselves the resources for this? Are we going to give them all the resources for a solid grounding, enabling them to take control of their lives, fraternal lives in tomorrow’s world? If we do not, what kind of world are we setting up for ourselves?…

This is why I call on you all to become part of this global drive for education. Education and health will not just be the pillars of our societies in the 21st century; they will be the basic components of our economies, too.

GENDER We must also fight passionately against gender-linked inequalities. I have made 8

gender parity in France the great cause of my five-year term, and I issue an appeal here to make this a great global cause with you. Women and girls are the first to be affected by poverty, conflict, the consequences of global warming; they are the first victims of sexist and sexual violence, which too often prevents them from moving around freely, working or choosing what happens to their bodies.

Our responsibility in the 21st century is to end these kinds of violence, from harassment on the street to femicide. It is time our world stopped making women victims and at last gave them their rightful place – the one where they are leaders, too.

We must guarantee them access everywhere to education, health care, jobs, and to taking economic and political decisions, and fight every kind of violence they are subjected to.

So France will propose to governments wishing to move forward with us the creation of a coalition for adopting new laws for gender equality. Fifty per cent of our development aid will be devoted to projects to reduce gender inequalities.

HEALTH We must also relaunch efforts to fight health inequalities at international level. We are hosting the Replenishment Conference of the Global Fund to Fight AIDS, Tuberculosis and Malaria in Lyon in [October] 2019. We will retake the initiative on the fight against fake drugs and step up our action to tackle major pandemics. I call on everyone here to mobilise.

CLIMATE Finally, we must fight – with a passionate sense of urgency – against environmental inequalities. It is unacceptable for 45% of greenhouse gas emissions to be produced by

10% of the planet’s richest inhabitants. It is inefficient – as is the case with solar power – for countries with the largest potential and greatest needs to be those with the least access to the appropriate technology.

It is indefensible that 100 million more people will be doomed to extreme poverty by 2030 if we do not succeed in honouring our commitments to fight global warming.

Here too, it is a battle which must bring us together.

Some countries here are suffering more than others and we owe them solidarity. But we will all have to provide an explanation to our peoples and our own children for this growing number of disasters.

PARIS CLIMATE AGREEMENT The heralded breakdown of the Paris Agreement has been averted, because we have managed to remain united, despite the American decision to withdraw from it. This strength must continue to carry us along and dispel all fatalistic approaches.…

We are told that it is already too late, that we won’t meet the targets. Then let’s speed up … Let’s implement the protocol against HFC gases, which could enable us to reduce the planet’s average temperature by 1ºC by 2050. Let’s set ourselves the goal of concluding in 2020 a plan for an ambitious global pact for the environment, and making the Beijing [Conference of the Parties] on biodiversity and the IUCN World Conservation Congress in France in 2020 decisive steps.

Let’s commit ourselves clearly and let’s all be equally clear, concrete and coherent. It is an emergency. So let’s comply with the commitments we have made. Let’s sign no more trade agreements with powers that do not respect the Paris Agreement. Let’s ensure our trade commitments include our environmental and social obligations. Let’s more heavily mobilise sovereign funds, which finance this low-carbon policy strategy.

France will continue to exercise global leadership in this battle, along with everyone who so wishes. We will work at the G7 to ensure that the commitments made at COP21 are revised upwards, and if one of the members does not want to move forward, we will move forward even so, going to seek new coalitions, new formats, because

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

I strongly believe that in the face of these rifts, these challenges in the contemporary world order, we can build a new language of action”

the G7’s remit is to remain a united group of countries committed to democracy. But today it must also help create new coalitions enabling the global collective system to be furthered and rebuilt.…

INEQUALITIES Only together can we effectively combat all these inequalities, which have each fractured our societies.…

Otherwise there will ultimately be only two solutions. The first would be to always choose the lowest common denominator and follow the standards we know; this is what we have done for decades.…

The other response would be to say it is the rules that do not work. So let’s withdraw into ourselves. Isolationism, protectionism.

But this leads to only one thing: an increase in tensions.…

I propose, on the contrary, that we establish a collective mechanism for working together on what we are doing, in each of our countries, to reduce inequalities.

To assess our actions but also make them more consistent and spread good practice. So I propose that the international institutions – the United Nations but also, of course, the [Organisation for Economic Co-operation and Development] – support us in establishing this mechanism, for which the G7 will have to be the driving force.…

AFRICA We must give Africa its full role, to ensure its role is central to the recomposition of the international system.…

Because it is indeed today in Africa that we find the most fervent champions of multilateralism and regional integration, because our African partners have clearly understood that together we will be in a position to tackle our common challenges. And the French G7 presidency will also set to work on this new alliance with Africa.

As you see, I believe very strongly that in the face of these rifts, these challenges in the contemporary world order, we can build a new language of action and we must, at the same time, attack the underlying causes that contemporary inequalities represent.

This text has been extracted from a speech by President Emmanuel Macron to the United Nations General Assembly on 25 September 2018.

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LEADERS’ VIEWS

Justin Trudeau Prime Minister, Canada

Milestones and ambitions for a united world E

very success and milestone our country celebrates, we are able to celebrate because of [the Canadian people].

It is your hard work, your ambition, and all your acts of perseverance and kindness that change lives and our country for the better.

LOOKING AHEAD Thanks to you, we are heading into the New Year with the lowest unemployment rate in over 40 years.

Wages are up and, today, 800,000 more people are working than in 2015.

Together, we negotiated a new NAFTA [North American Free Trade Agreement] – and got a good deal for Canada – so that Canadians can count on well-paying jobs, and our businesses can count on the access they need to expand and thrive.

We hosted the G7 and, while there, got leaders of the world to commit $3.8 billion to supporting women and girls’ education in crisis and conflict situations – the largest investment of its kind ever made. We also launched the Ocean Plastics Charter, a historic initiative to eradicate plastic pollution and protect our oceans.

At home, we have a lot to celebrate: from the introduction of Canada’s first national accessibility law, to the single largest investment in discovery science in Canadian history, to the biggest privatesector investment project our country has ever seen.

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Together, we will keep the momentum going. We will continue to open the door to new markets, build on progress towards real, meaningful reconciliation with Indigenous peoples, and create more jobs while protecting the environment.

Starting [in January 2019], small businesses in Canada will benefit from a combined federalprovincial-territorial average income tax rate of 12.2% – the lowest in the G7. It will also no longer be free to pollute anywhere in Canada, as we put a price on pollution to cut emissions and fight climate change.…

ACTION FOR OUR OCEANS From the air we breathe and the food we eat, to the land we call home – oceans are essential to sustaining life on our planet.

We know first-hand the benefits of healthy waters, and the consequences of what happens when we neglect them. Illegal fishing, pollution and climate change harm the oceans we need to survive.

On World Oceans Day, we are all called on to do more to protect our oceans and coastal communities.

If we fail to act now, we risk losing more than we can measure in a science lab or an environmental report. Climate change is real, and people here in Canada and around the world are already facing its devastating effects.

Our coastal communities are the first to feel the impacts of increasing global temperatures – from floods and hurricanes, to rising sea levels and melting sea ice, to depleted fish stocks and the loss of jobs. The Intergovernmental Panel on Climate Change report last fall and the more recent report on Canada’s Changing Climate force us to face a stark reality: without immediate action, we will not be able to protect the plants, animals and habitats that we all depend on from the effects of climate change.

The government of Canada is taking action to preserve and restore our marine ecosystems. Through the historic Oceans Protection Plan, we have made progress on keeping our waters safe and our coasts clean. We have already protected 8% of marine and coastal areas nationwide, up from less than 1% in 2015. We are on track to protect 10% of these areas by 2020. Last year, we announced additional funding to protect the habitats and food sources of endangered whale populations facing extinction. The funding will also address other threats to whales’ survival, including from noise disturbance and pollution.

From launching the Ocean Plastics Charter during our 2018 G7 presidency – now supported by 21 governments and more than 60 businesses and organisations – to co-hosting the Sustainable Blue Economy Conference with Kenya and Japan last November, Canada is taking a lead role internationally.

At the conference, we committed to strengthening

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

We will continue to open the door to new markets, build on progress towards real, meaningful reconciliation with Indigenous peoples, and create more jobs while protecting the environment”

science and research initiatives, promoting collaboration in sustainable partnerships and projects, and supporting global action that puts people and the environment at the heart of international development.

We are also investing $100 million to help prevent plastic waste from entering the oceans, address plastic waste on shorelines, and better manage existing plastic resources in developing countries.

We all share the responsibility to keep our oceans, coasts and seas healthy.

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It is the little things we can all do – like using fewer plastic bags and bottles, choosing more reusable packaging and buying sustainable seafood – that can make a world of difference for our oceans. Today and every day, let’s do our part to protect them for future generations.

These texts have been extracted from Prime Minister Justin Trudeau’s statement to mark the New Year on 31 December 2018 and his statement on World Oceans Day on 8 June 2019.

August 2019 — G7 FRANCE: THE BIARRITZ SUMMIT

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Leading the effort towards a more equal world 12

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

LEADERS’ VIEWS

Giuseppe Conte Prime Minister, Italy

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he times we live in are not only times of global challenges, but also of opportunities and progress. They are times of deep and radical changes. It is the duty of a flexible and like-minded forum such as the G7 to promote concrete policies to steer these changes in the right direction. We cannot back away from our responsibility of leading by example to shape a better future for our citizens.

To achieve this goal, it is important to maintain unity in the membership, enhancing the G7’s resilience and effectiveness through its adaptation to ever-evolving global challenges.

I strongly believe that delivering a better world to our people means shaping a fairer, more equal global society, to avoid making winners and losers. For this reason I support the French presidency’s choice of the fight against inequalities as a key priority this year. This choice is consistent with the Canadian and Italian presidencies and in line with the ‘new humanism’ that characterises the action of the Italian government. We have been constructing our innovative vision on a key word: people.

And for us, ‘people’ is more than a word: it is the focal point on which we centre national, European and global development.

Inequality is an ethical and moral issue. We must work together, sparing no effort, to guarantee that everyone has the same opportunities – the same access to health care, education and proper human development. No one should be left behind.

DEMAND FOR CHANGE Inequality also raises economic uncertainty, erodes public trust and social cohesion, and threatens human rights and peace. People are demanding a clear change and we must deliver on their demands for a fairer world.

To solve or at least mitigate the crucial issue of inequality, the international community and the G7 must rely on an invaluable resource: women and their empowerment. Safeguarding their rights and enhancing their access to education and jobs at the highest level will benefit us all, creating a world that is fairer, more efficient and prosperous. Gender equality, in fact, is not only morally right; it is of paramount importance for sustainable development and the well-being of our societies.

G7G20SUMMITS.ORG

Delivering a better world to our people means shaping a fairer, more equal global society, to avoid making winners and losers”

In this effort, encouraging women’s entrepreneurship as an engine for development in Africa can represent an important deliverable for the Biarritz Summit. Given that women’s empowerment and Africa are two key pillars of our foreign policy, Italy is ready to support AFAWA, a pan-African initiative of the African Development Bank to close the gender credit gap for women-led enterprises and scale up capacity-building support. AFAWA extends financing to women-empowered businesses through commercial banks and other financial intermediaries, provides technical assistance to women-led small and medium-sized enterprises, and engages relevant policy to improve the enabling environment for women’s entrepreneurship.

We are convinced that the G7 membership should communicate the importance of these initiatives effectively to raise public awareness of such crucial matters.

I am confident that digitalisation and technological progress can represent key tools to shape a better future for all and

guarantee broad access to opportunities, as long as we carefully harness them. To this end, I hope the Biarritz Summit will take the G20’s Osaka Summit a step further towards the definition of better international governance for these complex phenomena.

Our goal must be to unleash the tremendous innovative potential for development while preserving the fundamental democratic nature of our societies and our citizens’ privacy, safety and well-being. It also means collaborating with tech giants, finding a shared international strategy to make them pay what is fair for our societies but also support their role in expanding global access to important services such as health care, education and financial inclusion.

Protecting and safeguarding the environment is also essential in achieving a brighter future. The fight against climate change remains a key priority. But we should not forget other priorities. Out of the eight million plant and animal species on Earth, one million are threatened with extinction at an unprecedented rate. Italy fully backs the Metz Charter on Biodiversity: only a collective response from the international community can reverse this trend, which could otherwise irreversibly alter the ecosystem. We are convinced that the strong political message that the G7 launched in Metz and will send from Biarritz will catalyse collective engagement, raising the importance of this topic in the global agenda.

Fighting inequality, empowering women, harnessing the digital revolution and protecting the environment are all crucial challenges of our times. We are aware of their complexity and we know members do not always share the same views. But we are optimistic. The Biarritz Summit is an important chance to accomplish meaningful results by working together in true partnership and engaging with civil societies and other stakeholders.

Italy is confident that multilateralism is the only way to defend the interests of the whole international community and the G7 is still an indispensable tool. We are called on to give a strong signal to the public, to steer our common future towards a better, fairer and more sustainable global society though concrete and shared policy actions.

Italy is fully ready to do its part in this collective effort.

August 2019 — G7 FRANCE: THE BIARRITZ SUMMIT

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Creating space for inclusive and transparent global trade A healthy trade environment requires strong international commitment, writes HE Hamad Buamim, chairman of the ICC – World Chambers Federation and president and CEO of Dubai Chamber of Commerce and Industry, as he calls on the G7 to improve access to trade networks and support global trade expansion

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s the G7 leaders gather in Biarritz for an agenda focused on fighting inequality and fostering more fair, equitable trade, attention is turning towards international trade practices and the contributions made by players worldwide.

The International Chambers of Commerce and the World Chambers Federation champion fair globalisation that drives prosperity for all. Small and medium-sized enterprises are the backbone of the world economy, accounting for 95% of all enterprises globally and representing around 60% of private-sector jobs.

Placing SMEs at the centre of growth programmes is critical to achieve sustainable growth and economic diversification. This in turn improves a country’s export basket and its long-term competitiveness.

SMEs play a vital role in driving trade: around 80% of global trade occurs in worldwide value chains coordinated by multinational companies, but close to half of the added value within these chains is contributed by local SME suppliers.

Trade finance remains one of the most important facilitators of international trade, and this is especially true for SMEs, which rely on access to banking services in order to export and import. Trade finance allows companies to mitigate the risks associated with importing or

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exporting goods and services, facilitating trade flows in a seamless, transparent and secure manner.

Technology is improving the trade finance landscape. The 2018 ICC Global Survey shows that more than 60% of banks surveyed have implemented or are in the process of implementing technology solutions to digitalise their trade finance operations. To take this further, industry players and trade organisations must do more to agree on common standards so that all the benefits of trade digitalisation can be realised.

To support SMEs, the ICC-WCF is raising awareness and promoting education on best international trade practices, the benefits of trade finance, online training, support through regional chambers and producing guides to support the contribution of SMEs to global trade. The ICC-WCF also regularly uses its data to develop concrete policy recommendations to stimulate trade finance alongside international organisations and other public- and private-sector partners.

TRADE FOR PRIVATE-SECTOR DEVELOPMENT Developing countries are also key to promoting strong trade. Emerging economies are the ones to watch, as they are reshaping Hamad Buamim global connectedness and are most involved in current international

trade interactions. Work is under way to better engage these countries in bilateral and multilateral trade arrangements – for example, by promoting the efficient use of technology in developing countries to streamline exports and imports.

Technology is central to reducing time and costs associated with trading.

In particular, we are promoting the use of 4IR technologies, which include artificial intelligence, augmented reality, robotic process automation, analytics and the internet of things.

Emerging markets will soon dominate the world trading system, with their share of trade rising from less than one-third today to nearly 70% by 2050. Trade among emerging economies will also increase, therefore making it imperative to involve developing countries in sustainable trade practices.

THE WORK OF THE ICC-WCF As chair of the ICC-WCF, I have launched an ambitious plan to remove existing barriers to global trade, strengthen the role of the ICC-WCF as a facilitator of global commerce, develop smart and innovative solutions and services for businesses, and adopt a future-ready framework that will enhance the competitiveness of chambers and their members worldwide.

The plan works towards a more open and inclusive system of international trade and creates a sustainable mechanism that measures and assesses the needs, aspirations and challenges of businesses globally.

We should not forget, however, the importance of channelling our cooperation in a way that supports progress towards the Sustainable Development Goals set by the United Nations General Assembly. Chambers and businesses have a crucial role to play in implementing these goals, solving pressing global challenges and creating far-reaching benefits.

By working together, sharing knowledge and utilising our combined expertise, I believe that we as chambers of commerce can achieve common goals, move the chambers community forward, and pave the way for sustainable global growth.

Such work includes tackling trade imbalances, which we are doing by supporting World Trade Organization reform, promoting multilateralism and free trade, supporting SMEs and sustainable development and undertaking campaigns, such as the

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INDUSTRY PERSPECTIVE Global Trade Dialogue Initiative and the #tradematters campaign.

Over the coming year, we can expect some global trade challenges – the WTO and International Monetary Fund, for example, have lowered their projections for 2019 due to trade tensions. However, there are also opportunities. To reap the benefits, we must work collectively to develop new, innovative solutions to such challenges and create a more inclusive and transparent system of global trade.

There exist significant opportunities in emerging economies, which will account for more than 60% of the world’s economic growth in the next decade – representing $15.5 trillion. More trade opportunities will also emerge thanks to multilateral trade agreements, such as CPTPP, and initiatives such as the Belt and Road Initiative, which create cross-border trade and investment opportunities through infrastructure projects.

GREATER EXPORT OPPORTUNITIES Trade finance can create more export opportunities, especially for SMEs, and technology can be applied to a greater degree to make trade easier, simpler and more transparent.

The future of trade looks bright, provided there is international support underpinning it. I therefore call on the G7 to support global trade expansion, make international trade networks more accessible for SMEs, and create space for emerging markets to reach their full potential – to the benefit of all.

HE HAMAD BUAMIM Chairman, ICC – World Chambers Federation, and president and CEO, Dubai Chamber of Commerce and Industry Holding his current position since 2006, HE Hamad Buamim is the president and CEO of Dubai Chamber of Commerce and Industry. He is also the chair of the Paris-based ICC – World Chambers Federation. Buamim serves as a board member of Dubai World, Dubai International Financial Center and acts as chairman of National General Insurance PJSC. Previously, Buamim served as chairman of Emirates Financial Services, Emirates NBD Capital and Hawkamah and the Institute for Corporate Governance, and was a board member of the UAE Central Bank, Emirates NBD and Network International. Educated in the USA, Buamim holds an MBA with honours in finance from the University of Missouri, Kansas City. He also obtained a bachelor of science with distinction in electrical engineering from the University of Southern California, Los Angeles.

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Inclusivity: the key to a fair future for all S

ince 1975, the most economically advanced countries have come together with a common understanding that with economic power comes great responsibility. In just over four decades, our world has advanced in leaps and bounds. But that same shared responsibility, to ensure that no one is left behind, remains just as pressing today. In a world where a billion people have emerged from extreme poverty in 15 years, half of global wealth remains in the hands of 1% of the global population. By 2030, more than 100 million people could fall back into extreme poverty due to climate change alone. In every country in the world women outlive men, but on virtually every global measure, women are more economically excluded, despite often being more educated, as is the case in the European Union.

There is absolutely no justification for the persistence of inequality in a world as developed as ours. It is why today the European Union and its members remain the biggest global provider of official development assistance – last year this amounted to ₏74.4 billion, which represents 57% of the global effort. It is just part of who we are. Yet we are not in the business of charity, but in the spirit of true partnership among equals, working together with our partners for inclusive

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LEADERS’ VIEWS

Jean-Claude Juncker President, European Commission growth through environmentally, socially and financially responsible vehicles. To fight inequality is to seek long-lasting, tangible solutions to the global challenges we face, and the only way to do this is to ensure the process of developing them is inclusive. This is why we have shifted our action towards long-term investment for education, employment and growth. And in order to increase the resources available to achieve our ambitious objective of leaving no one behind, we are leveraging private funds with public finance.

The new Africa-Europe Alliance for Sustainable Investment and Jobs is about a new economic impetus for the two continents, focusing on job creation and education for employability, through boosted investment and increased trade. It is already working. With the European Union’s External Investment Plan, our target was to leverage up to €44 billion by 2020. There is €37 billion already in the pipeline. These financial efforts support the creation of 10 million jobs in Africa over the next five years, more than 100,000 Erasmus+ educational mobilities by 2027 and access to electricity for 30 million people and companies.

STRONGER COOPERATION I welcome the drive by the French G7 presidency to reinforce our cooperation with Africa at the level of the G7. The European Union is already Africa’s biggest trading partner, accounting for 36% of Africa’s trade in goods. The European market remains the most open to African exports in the world, and it accounts for 40% of foreign direct investment in Africa.

As we reflect on how we move forward this year during our discussions, the commitments we make must be concrete and durable, our partnership one of equals.

For the European Union, this is our starting point. It is why we will always stand up for a global economy that is open, governed by clear rules, transparency and fairness. These are the values at the heart of the European Union and what multilateralism should strive to achieve. It is why all our international trade agreements promote these values. Take our recent agreement with Mercosur, a landmark agreement 20 years in the making that will create a free trade area covering 780 million people. Each and every country party to the agreement has committed itself to the effective implementation of the Paris Agreement and, in the case of Brazil, the commitment to stop deforestation in the Amazon.

A priority at the heart of the European Pillar of Social Rights, which enshrines

We must stand against the pursuit of protectionist, nationalist policies that will only reinforce existing inequalities” G7G20SUMMITS.ORG

these principles within the European Union, fighting inequality in all its forms, from the workplace and beyond, has been one of my priorities over the past five years. Beyond our borders, the EU has been leading the global fight against gender inequality. Last year, the EU co-hosted the first ever meeting of women foreign ministers under Canada’s G7 presidency, where we pledged to build a network of governments and civil society organisations to advance gender equality. This year, we launched the Spotlight Initiative with the United Nations to address gender-based violence, and we have already launched targeted programmes in Latin America and the Pacific region.

DIGITAL DEVELOPMENT I am also looking forward to our work on the digital front. The European Union has much to offer the discussions in Biarritz. Our General Data Protection Regulation set a new global standard for privacy and is now the blueprint for data protection in countries accounting for 42% of global gross domestic product and 34% of global trade. Our ongoing work with digital platforms to prevent the dissemination of terrorist content and hate speech online is now helping to remove 89% of illegal content in the crucial 24-hour window before it spreads.

Harnessing the digital transformation while protecting our citizens and democracies from harm is a challenge of utmost importance now, and not one any country can face alone. It is a prime example of where global forums such as the G7 have a crucial role to play.

Protecting the world we live in is a shared responsibility and a battle we will all lose if some do not pull their weight. We are meeting at a time when the multilateral system is facing constraints as some of our oldest partners divert from our common path and new powers emerge. We must stand against the pursuit of protectionist, nationalist policies that will only reinforce existing inequalities. For those who have the privilege to be a member of the G7, we must lead by example. This is the message I will deliver in Biarritz.

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WHAT’S THE ENDGAME?

AT CURRENT PACE, IT WILL TAKE US 108 YEARS TO ACHIEVE GENDER EQUALITY AROUND THE WORLD. THIS IS UNACCEPTABLE. THE G7 HAVE THE POWER TO CHANGE THIS. HERE’S HOW:

Scan with your phone or go to one.org/G7

GUEST LEADERS’ PERSPECTIVES

Scott Morrison Prime Minister, Australia

The common challenge we face A

ustralia is not a member of the G7, but we share much in common with the countries that are. None of us became the liberal democracies we are today without overcoming significant challenges and remaining true to the enduring principles that have underpinned our success.

For some of us, the path to individual liberty required revolution; for others, steps were more incremental. But whatever road we took, each of us reached the same place.

We are all open and prosperous societies.

This should hearten us all, since our shared values exist despite different cultural and historical backgrounds. Clearly, a liberal democratic future is open to all. But it can be taken for granted.

The liberal idea is always under challenge.

The attacks of some calling it obsolete, that it has gone too far or it has run its race are motivated by the same old antipathy to liberal democracy that we have always resisted and overcome.

Others warn that the reflex to prosperous, open and secure societies is being undermined by the (mis)use of technologies that are the fruit of an open and liberal society. Some even argue that this trend cannot be reversed.

This is a defeatist view. Australians are never defeatist and we are always

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optimistic. It’s because we believe in the power of human agency. We should never lose confidence in the basic strengths and values that underpin our societies.

But we do have to adapt and change. We must remain the masters of our destiny.

We cannot allow the power and reach of new technologies or the rise of emerging countries to intimidate us into inaction.

Instead, we need to be as open as we are robust in defending what is important to us.

A good example is the G20’s support for Australia’s initiative to remove terrorist and violent extremist content from the internet. Our efforts are not directed at the technology. They are directed at its misuse.

Such content is a threat to all our freedoms; the Christchurch attacks happened while people were exercising their freedom of religion through prayer. We are not limiting our freedoms by stopping the spread of such vile content. Our efforts do not legitimise the efforts of those countries who put limits on the free flow of information to their citizens.

Instead, by making the online world safe, we are letting people lead the lives they want – free of fear. If we leave ourselves open to the exploitation of others, we have only ourselves to blame.

PRESERVING FREEDOMS Similarly, we should not be afraid to protect our institutions when our democracies are threatened by foreign interference. This is why my government is working to bolster electoral integrity, preserving the voice and freedoms of Australia’s citizens. There are clearly many reasons why we should work together in supporting democracy and openness in this digital age. Chief among them is the example we can set for the world. We need to demonstrate that freedom is compatible with security. The more of us that can achieve it, the more powerful that example.

But this does not mean we should close ourselves off to others. Foreign investment has been an indispensable part of Australia’s economic story. Our domestic and global economies will continue to thrive if we keep the channels of trade and investment open. And we know that, as a country of 25 million, Australia cannot be at the cutting edge in every technological domain. After all, Ricardo’s theory of

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GUEST LEADERS’ PERSPECTIVES

The liberal idea is always under challenge. The attacks of some calling it obsolete, that it has gone too far or it has run its race are motivated by the same old antipathy to liberal democracy that we have always resisted and overcome”

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comparative advantage still applies in the technological age.

For Australia to prosper we must remain open to the best ideas and technologies the world has to offer. Many other nations agree.

It is why nearly 80 economies are working together on creating a new framework of global rules for ecommerce at the World Trade Organization. Australia is pleased to be chairing these negotiations and we are hopeful of substantial progress towards an agreement by the WTO’s next ministerial meeting in mid-2020.

It is true, however, that our global trading system is under strain. In some ways our collective rules-based system has not adjusted to new challenges. Our response must be to repair, renovate and strengthen that system. If we fail, international commerce will be based less on competition and more on economic muscle.

Australia has thrived by being open to competition, and we continue to be one of the strongest advocates for trade liberalisation. The economic dividend of Australia’s openness has been substantial – 28 years of uninterrupted economic growth, a world record.

That growth is both a function of and a contributor to the expansion of emerging economies in East and South Asia over the past four decades. We produce many of the raw materials and the modern services that help their growth, while we benefit from their imported goods in return.

The G7 remains one of the stewards of the open global economy that has benefited so many countries in every corner of the world.

Australia is pleased to be able to participate in the G7’s 2019 gathering at Biarritz to share our economic story, to play our part in keeping global trade and investment flowing, and to help ensure modern technologies are harnessed for economic and individual liberty, not terrorism.

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GUEST LEADERS’ PERSPECTIVES

Sebastián Piñera President, Republic of Chile

Global good from the new world order

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new world order is emerging as we approach the end of this decade. It is born from a revolution that, unlike the previous ones, presents more challenges and opportunities and will change our lives more deeply than any other before.

One of the great threats we face today is the deterioration of our environment, including desertification, loss of biodiversity and the contamination of water, air and soil. Climate change will define the contours of this century and determine the survival of human beings on our planet. I have no doubt that the quality of our response will be severely judged by our children, grandchildren and history.

At the same time, this new order offers possibilities of material and spiritual progress for billions of people as never before. Opportunities that, only a few years ago, were impossible to imagine. This is the revolution of knowledge, technology and information – the deepest, both in magnitude and scope, that humankind has known. This revolution will be very generous with those states that want to embrace it, but indifferent, and even cruel, with those who simply ignore it or let it pass.

Yet the opportunities brought by this revolution come with risks and challenges that far exceed the possibility for governments to act individually. The threats and dangers of modern society, such as terrorism and the effects of climate change, do not recognise any borders or jurisdictions.

In this context, Chile will be a part of the G7 Biarritz summit as a partner. The G7 summit takes place in a time of multilateral uncertainty and expects to be result-driven, reaching concrete achievements on the threat of climate change and the challenges and opportunities of the digital revolution for the benefit of our people.

ACTION ON CLIMATE CHANGE The G7 summit will be a relevant landmark on the road towards the 25th Conference of the Parties to the United Nations Framework Convention on Climate Change in Santiago, where more than 150 states will meet to launch the implementation of the Paris Agreement.

We want COP25 to focus on ambition and action, by raising our mandatory and

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differentiated commitments to keep the temperature rise below 1.5°C. This goal requires us to regulate the unresolved carbon market, strengthen our alliances with the private sector and incorporate new issues, including the protection of our oceans and poles.

The G7 Biarritz Climate Coalitions will be crucial to lay the groundwork on specific and significant areas. Improving the efficiency of cooling systems, moving to electro-mobility, pledging carbon neutrality by 2050 and protecting our oceans by eliminating plastic waste are all examples of concrete areas in which we will take on new climate commitments in Biarritz.

THE DIGITAL REVOLUTION We have a responsibility as heads of state or government to seize the revolution of knowledge and information while it is still knocking gently at our doors. In the case of emerging nations, such as Latin American states, this poses the additional – and unique – responsibility to vindicate our past and, above all, our future.

The burden is placed upon us, the community of states, to decide whether this revolution becomes a factor of unity and progress or a new source of rupture. The question is whether the second half of the 21st century will be a bridge that shortens the distances connecting developed and emerging nations or, on the contrary, a wall that furthers the distance between the world of the wealthy from that of the poor.

At the heart of this extraordinary revolution is the internet. It has empowered communities by giving them a voice, connecting millions of lives and fostering innovation and creativity.

However, we have found a challenge due to the increasing existence of harmful and illegal content and activity, where the victims are most often our citizens, especially our children – content that fuels violence and hate, putting our democratic values at risk and ultimately threatening the safety of our people. And while we recognise the importance of the internet as a common good and vector of progress, we witness every day an increasing risk of online abuse, particularly targeting women and vulnerable groups.

In Biarritz we will discuss with our partners how to find a balance between protecting the freedom of opinion and expression as vital democratic and human rights, and ensuring a secure digital revolution and preventing harmful content.

The partnerships we forge with digital platforms and social networks are the best way to counter terrorist content, violent extremism and child abuse. And while upholding the freedom of media, relevant stakeholders must increase transparency and accountability, carry out effective content reviews and enhance education.

No nation can face these challenges alone.

That is why the community of states has the responsibility of guaranteeing a healthy planet for our children and ensuring that the benefits of the digital revolution reach all citizens and help close the existing gaps.

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GUEST LEADERS’ PERSPECTIVES

Abdel Fattah El-Sisi President, Arab Republic of Egypt, and chair, African Union

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n Biarritz, I will have the pleasure of participating in the G7 summit in my capacity as chair of the African Union.

The African Union has been stepping up its actions to achieve its full potential as envisaged in Agenda 2063: The Africa We Want. This is being done in alignment with our global commitment to the 2030 Agenda for Sustainable Development, with poverty eradication in all its forms and dimensions at its core. A deep and comprehensive partnership between Africa and the G7 can help scale up actions to overcome global challenges.

GLOBAL CHALLENGES ARE MORE ACUTE FOR AFRICA Amid sluggish global revenue and trade growth, it is concerning that prospects for low-income countries to become middle-income ones are more challenging and progress is more fragile than earlier this century. This hampers ongoing efforts to eradicate poverty in Africa by 2030.

In terms of peace and security, the challenge of terrorism is affecting African countries in the Sahel region and a few other parts of Africa more than others. The Sahel region, which is set to gain our attention at Biarritz, is an illustration of how only global collaboration can combat terrorism from destroying the foundations of social cohesion and political order, both being the basis for sustainable development efforts. Egypt has developed, through years of combating terrorism, a comprehensive vision to address its root causes and responses and prevention strategies that integrate security, economic and social dimensions.

In parallel, Africa is bearing the heavy toll of climate change that it did not cause.

Africa’s highest mountain, Kilimanjaro, has seen its iconic glaciers shrinking, Mozambique was hit by unprecedented cyclones earlier this year and the Nile delta is being eroded by rising sea levels. Combined with its detrimental impact on water resources, climate change has been hitting rural communities in Africa hard. Equally worrying, evidence has shown that women are more likely than men to be affected by climate change, reversing decades-old efforts aimed at women’s empowerment.

Africa’s development prospects are promising. Recently, I celebrated with fellow African leaders in Niamey the official

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Africa and the G7: a partnership for progress launch of the African Continental Free Trade Area. This has marked a long-awaited historic achievement that aims at boosting intra-regional trade and unlocking investment potential. Foreign investments can thus benefit from economies of scale on a continent that harbours the fastest-growing middle class, where domestic consumption will increase to reach $2.1 trillion by 2025.

In fact, Africa is set to be the fastest-growing continent in terms of population, accounting for more than half of the global population growth until 2050. To be prepared for these demographic trends and the ensuing labour force expansion, African governments are engaged in a variety of policies to provide the workforce with the necessary skills for the jobs market.

In parallel, we are keen on devising the necessary environment to create new employment opportunities. For instance, an additional 14 million jobs could be created through the acceleration of Africa’s industrialisation process, which is also expected to double Africa’s manufacturing output by 2025.

A PROMISING PARTNERSHIP As opposed to the African share in global gross domestic product – total global trade and foreign direct investment inflows that currently stand at a staggering 3% share –

we believe we have the necessary conditions in Africa to become much more productive, integrated and attractive in the world economy. A bold partnership between the G7 and Africa can support our efforts and enact our global commitment to realise sustainable development.

The French G7 presidency has identified several themes to launch the G7 Partnership with Africa: digital transformation, women’s entrepreneurship and anti-corruption.

One important building block for the sustainable development vision is to harness the potential of digital and emerging technologies, which can help economies leapfrog. The African Union together with the World Bank has developed a vision to digitally enable African individuals, businesses and governments, and achieve a digital transformation of the continent. G7 members are invited to partner with us in this area and support its implementation, which can help global society bridge the growing digital gap.

EMPOWERING WOMEN Promoting women’s entrepreneurship is another important endeavour where cooperation is important. It requires a comprehensive approach integrating actions such as closing the gender gap in education, assuring financial inclusion and providing the ecosystem for entrepreneurs to innovate and thrive, as well as eliminating red tape.

Corruption is a challenge for all countries.

My country, Egypt, has hosted in June 2019 the first African Anti-corruption Forum, which gathered 48 African countries and nine international organisations, and which identified priority areas for regional cooperation to combat corruption.

Our vision lies in the potential of an enhanced Africa-G7 partnership to encompass vital pillars for global cooperation such as advancing global public health, promoting infrastructure development, connectivity and financing, as well as addressing the high level of indebtedness of several African countries.

A partnership with Africa is an investment in our common future, as Africans are expected to constitute more than 26% of the global population by 2050. A deep and comprehensive Africa-G7 partnership can truly benefit the world and help achieve the sustainable development goals.

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ADVOCACY

Eni

Public-private partnerships: leveraging investments to enhance energy access Africa’s large energy resource base has gone largely undeveloped, but a swathe of new, multi-stakeholder projects are targeting equal energy access for all, writes Eni

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oday, too many Africans are denied the capacity to make plans for the future because they don’t have access to clean, affordable, reliable and sustainable energy. In sub-Saharan Africa, almost 600 million people – just over half of the population – live without access to electricity, and close to 900 million people use biomass for cooking and heating. Africa is home to 17% of the world’s population, but its annual energy consumption is just 6% of the global total. To put this into perspective, the average African consumes about 34% of the energy of an average Chinese citizen, 22% of a European and a remarkable 10% of an American.

The electricity-generating capacity of the region has changed little in more than 20 years, yet the continent has a large resource base that is exploited only in part. This needs to change.

Fixing the problem of this lack of access to energy requires a vast joint effort between governments, international institutions and the private sector. Effective solutions can be triggered by public-private partnerships, where the private sector joins forces with governmental agencies to provide skills and know-how in addition to financial resources to attain greater and more successful results. However, for this to work a strong public sector is vital in order to provide guarantees to investments, assess the impact of the initiatives and

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strengthen and support the capacities of the local communities.

Eni has a portfolio of projects aimed at increasing access to energy in Africa that are testament to the effectiveness of this multi-stakeholder approach.

A good example is Ghana’s Offshore Cape Three Points project. This integrated development project is the only project in sub-Saharan Africa in which deep-water non-associated gas has been developed entirely for the domestic market. OCTP will provide 180 million standard cubic feet a day for at least 15 years, enough to convert half of Ghana’s power-generation capacity to cleaner and more efficient gas. Not only will this contribute to the country’s energy stability, a prerequisite for industrial and economic growth, but it should also give Ghana time to embrace renewable energy solutions. This development was made possible thanks to an innovative form of cooperation among the private sector, development finance institutions and the public sector. This included an innovative payment security structure involving World Bank guarantees amounting to $700 million from the International Development Association and the International Bank for Reconstruction and Development.

Mozambique’s Coral South floating liquefied natural gas facility in Mozambique is another relevant example of coordinated multi-stakeholder efforts enabling

Mozambican gas resources to be developed.

At the end of 2017, despite a challenging environment, Eni, together with its partners, finalised $4.9 billion of project financing for the Coral South FLNG facility with a capacity of around 3.4 million tonnes per annum of LNG. Coral South FLNG is the first project sanctioned by the Area 4 partners for the development of the considerable, world-class gas resources discovered in the Rovuma Basin. The financing has involved 15 banks and five export credit agencies from Italy, China, Korea and France.

These are two concrete examples of how Eni’s ‘dual flag’ approach is applied.

Eni aims at leveraging partnerships for development in order to share its experience, professionalism and knowledge, as well as economic and relational resources. The objective is to guarantee, through authoritative and internationally recognised partners, technical and methodological support for the development and implementation of long-term projects, capacity building, training and awareness, in line with the needs of the countries and the 2030 Agenda.

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EDITOR'S INTRODUCTION

John Kirton Director, G7 Research Group

Prospects for the Biarritz Summit 26

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he 45th annual G7 summit, on 24–26 August 2019 in Biarritz on France’s Atlantic coast, comes when the climate change crisis has reached a critical stage, when the established multilateral liberal order is under assault and when growing populism, protectionism, provincialism and doubts about democracy tempt many to turn inward to temper the inequalities that some aspects of globalisation have intensified at home.

G7 leaders will address the ambitious goals that French president Emmanuel Macron as host has set. Under the theme of fighting inequalities, they will focus on five priorities. The first is enhancing equality of opportunity through gender equality, access to education and high-quality health services.

The second is environmental equality through climate finance, a fair ecological transition, the oceans and biodiversity. The third is more fair and equitable trade, tax and development policies. The fourth is promoting peace, amid security threats and terrorism. And the fifth is seizing the opportunities offered by digital technology and artificial intelligence.

INTERNATIONAL REFORM The Biarritz Summit will also address reforming the world’s major international institutions, notably the World Trade Organization and the International Labour Organization (on its 100th anniversary), and the United Nations and the Organisation for Economic Co-operation and Development, where new powers have a greater place. It will consider the role of non-state actors and seek to improve its partnership with Africa.

G7 leaders will also address key security issues such as nuclear proliferation in Iran and North Korea; regional security risks in Ukraine, the Baltics, the Middle East and North Africa, Venezuela and Asia; maritime safety in many regions; terrorism; crime and corruption; and violations of democracy and human rights.

Macron, at his third G7 summit, will host many fellow G7 veterans. Germany’s Chancellor Angela Merkel will attend her 14th. Japanese prime minister Shinzo Abe will be at his eighth, having just hosted the G20’s Osaka Summit in June. Canadian prime minister Justin Trudeau will come for his fourth summit, having hosted the G7 at Charlevoix in June 2018 and approaching an election on 21 October 2019. US president Donald Trump will be at his third summit, facing the presidential election in November 2020, and anticipating hosting the next G7 summit in late spring 2020. Italian prime minister Giuseppe Conti will be at his second.

The United Kingdom’s new prime minister Boris Johnson will be preoccupied with the UK’s scheduled withdrawal from the European Union in October. The European Union will send veterans Donald Tusk and Jean-Claude Juncker.

France also has invited the leaders of several other powers. The first set consists of key democratic partners from other global regions: India’s prime

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G7 leaders will gather in the French coastal town of Biarritz

minister Narendra Modi, Australia’s prime minister Scott Morrison, South Africa’s president Cyril Ramaphosa and Chile’s president Sebastian Piñera.

The second set comprises African leaders: Egypt’s president Abdel Fattah El-Sisi, Senegal’s Macky Sall, Rwanda’s Paul Kagame, Burkina Faso’s Roch Marc Kaboré as chair of the G5 Sahel and African Union Commission chair Moussa Faki.

Supporting the leaders are seven pre-summit ministerial meetings covering nine portfolios: foreign affairs and interior on 5–6 April; environment on 5–6 May; gender on 9–10 May; health on 16–17 May; labour on 7 June; development and education on 4–5 July; and finance and central bank governors on 17–18 July. Inputs also come from an energetic civil society led by engagement groups for business, labour, civil society, women, youth, science and think tanks.

LIKELY OUTCOMES With such supports, the Biarritz leaders will likely produce a summit of at least solid success across all the priorities France has set. On gender equality, their summit will advance the legal status of women in the lead-up to the UN’s Beijing+25 conference next year and mobilise money for women’s financial inclusion in developing countries. On education and health, it will boost the desired 15% funding increase for the Global Fund to Fight HIV, Malaria and Tuberculosis and strengthen the response to the Ebola outbreak in the DR Congo after the recent shock of its spread to Goma. On the environment, all members but the United States will promise to implement and improve the Paris Agreement on G7G20SUMMITS.ORG

JOHN KIRTON Director, G7 Research Group John Kirton is director of the G7 Research Group, G20 Research Group and the Global Health Diplomacy Program and co-director of the BRICS Research Group, all based at Trinity College at the Munk School of Global Affairs and Public Policy in the University of Toronto, where he is a professor of political science. He is a visiting professor at the School for International Relations and Public Affairs at Shanghai International Studies University and a distinguished fellow of the Guangdong Institute for International Strategies at Guangdong University for Foreign Studies, and author of, among other books, G20 Governance for a Globalized World.

Twitter @jjkirton  www.g7.utoronto.ca

climate change, support the UN Climate Action Summit in September and bolster biodiversity, while US resistance will constrain the needed response to the extreme heat, floods and wildfires now reaching new peaks around the world. There will be important agreements on proportionally fair and minimum digital taxation and efforts to regulate the cryptocurrencies introduced by private giants, lest they undermine the protections provided to citizens by their sovereign states. G7 leaders and their partners will also protect their democratic elections from internal interference, curb social media use for violent extremism, and narrow their differences over the threats to democracy and human rights from Iran, Russia and China.

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SPOTLIGHT ON BIARRITZ

Shared concerns from La Nouvelle-Aquitaine and beyond

As leaders gather in the coastal resort of Biarritz, Alain Rousset, president, Regional Council of Nouvelle-Aquitaine, calls on world leaders to unite in acting on climate change and other shared environmental issues on a global scale

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et’s be honest: more than outstanding, the region of NouvelleAquitaine is an ideal location to hold a successful G7 summit for many reasons.

First of all, the geographical diversity of our region is phenomenal. From our breathtaking mountaintops to our dreamy beaches, through our many valleys, forests, swamps and islands, Nouvelle-Aquitaine holds the very best France has to offer. And the same goes for our history, gastronomy and culture: the timeless paintings of the Lascaux caves will give you an idea of how deep our roots grow, yet Nouvelle-Aquitaine has developed, through the years, an art de vivre that is part of who we are – whether it be our world-famous wines and spirits or our beautiful churches and castles. And last but not least, our region is an ideal location thanks to our people: dynamic, positive, engaging and innovation-driven, with a strong entrepreneurial culture.

In short, welcome to France’s most beautiful and diverse region. I am sure the 2019 G7 summit will shine a new light on both our centuries-old values and our forward-looking approach.

These assets, modern and ancient, have established Nouvelle-Aquitaine as a key player in France, Europe and the world. For instance, every year, our start-ups and companies participate in high numbers at the Consumer Electronics Show in Las Vegas in January. Our agriculture is number one in Europe. We export France’s finest wines all over the world. The list goes on and on.

AREAS IN FOCUS While preparing for this summit, which is of the utmost importance, Nouvelle-Aquitaine brought its focus to the decisive issues of climate change, the energy transition and biodiversity. Never before have we seen so many extreme climatic events occur with such regularity; never before have we witnessed the vanishing of so many species – birds, insects, fish, mammals and plants alike. Never before have we been confronted with the threats of rising sea levels or massive climatic migrations.

In order to tackle these challenges – the highest of them all being our own survival and our capacity to adapt – our region has relied on a method

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that we cherish dearly: dialogue and ‘co-construction’. Indeed, we consulted with our scientists, associations and citizens to produce a thorough diagnosis.

As the basis of our public action regarding climate change and the energy transition, we chose the same approach, paving the way for the leading scientific reports AcclimaTerra and Ecobiose of NouvelleAquitaine, respectively studying the evolution of the climate and the biodiversity of our region. Building tirelessly for decades an ‘ecosystem of trust’ among the research field and the economy, the industry and the universities and engineering schools, I pride myself on having the best and the brightest of scientists and researchers in Nouvelle-Aquitaine.

This is the reason why, as part of our contribution to the G7 summit, our region has submitted a scientific report, multidisciplinary and precise, about our adaptation to the effects of climate change all along our coastline. Indeed, because Nouvelle-Aquitaine possesses a thousand kilometres of coastline, our region is primarily concerned by the issue. Also, the G7 summit will take place in Biarritz, facing the Atlantic Ocean, a seaside resort deeply concerned about any variations in the coastline. Only thanks to the hard work of our scientists, associations and citizens are we able to take, together, the necessary actions.

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While preparing for this summit, Nouvelle-Aquitaine brought its focus to the decisive issues of climate change, the energy transition and biodiversity”

ALAIN ROUSSET President, Regional Council of Nouvelle-Aquitaine Alain Rousset was chief of staff to the first presidents of the Regional Council of Aquitaine from 1980 to 1985. He then worked at Elf-Aquitaine, before being elected general councillor, mayor of Pessac, president of the Regional Council of Aquitaine since 1998, president of the CUB between 2004 and 2007, and deputy of the Gironde from 2007 to 2017. He has been president of the Regional Council of NouvelleAquitaine since 2016.

Twitter @al_rousset  www.nouvelle-aquitaine.fr

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In the end, citizens of Nouvelle-Aquitaine and the rest of the world alike all breathe the same air and cherish the same future for our children. So, my firm belief is that, following the landmark 1999 Kyoto Protocol and 2015 Paris Agreement, our citizens wish world leaders to unite in acting on climate change on a global scale. And what better place to do so than in NouvelleAquitaine, where grassroots campaigns and scientific diagnoses fuel our regional action, day in and day out? What better place to lead the way towards a safer future, one in which we can all believe, than in this land of tradition and hope?

As Tennyson wrote, “’Tis not too late to seek a newer world.”

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1

TOWARDS GENDER, EDUCATION AND HEALTH PARITY

G7 performance on

gender equality Higher compliance on gender equality commitments is driven by factors including specific targets and ministerial meetings, writes Julia Kulik, director of research, G7 Research Group, as she shares the data on the performance of G7 members

W

hen G7 leaders assemble on 24–26 August 2019 for their summit in Biarritz, they will do so under a French presidency that has committed to fighting inequalities of all kinds, including gender inequality. This comes just over a year after a historic win for gender equality at the G7 summit in Charlevoix, Canada, which saw record attention to this issue across all thematic areas of its communiqué and a $3.8 billion investment in education for women and girls in conflict. Expectations are high for Biarritz to deliver results. The positive trajectory in recent years indicates a high likelihood of success.

CONCLUSIONS G7 leaders first addressed gender equality at their 1990 summit. Their focus was largely sporadic in subsequent years, but the issue has remained in the communiqué since the early 2000s and focus has steadily increased since 2013.

G7 communiqués averaged 643 words on gender equality at each summit, or close to 6% of the total words.

The three most recent summits dedicated the most words to gender equality. The 2016 communiqué contained 3,826 words (27% of the total) on gender equality. This increased in 2017 to 3,888 words (45%) and reached its highest point

JULIA KULIK Director of research, G7 Research Group Julia Kulik is director of research for the G7 Research Group, as well as for the G20 and BRICS Research Groups and the Global Health Diplomacy Program, all based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She has written on G7, G20 and BRICS performance, particularly on the issues of gender equality and regional security. Kulik leads the work of the groups on gender, women’s health, regional security and summit performance.

Twitter @juliafkulik  www.g7.utoronto.ca

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G7 performance on gender equality, 1975–2018 100

75

50

25

197

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mb ouil let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve nice 198 1 Ot taw 198 a 2 Ve 198 rsail 3W les illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 ris 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Gen 200 oa 2 Ka 200 nan 3 Ev ask ianis lesBain 200 s 4 Se a Isla 200 nd 5G l ene 200 agl 6 St es Pet 200 ersb 7H urg eilig 200 end 8H am okk m aido -Toy ako 200 9 L’A quil 201 a 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix

0

Compliance (%)

in 2018 with 5,086 words (45%). In 2016 and 2017, the first stand-alone documents on issues related to gender equality were issued. The 2018 summit produced two, one on improving education for women and girls in developing countries and the other on ending gender-based violence in a digital context.

COMMITMENTS Because for many years commitments directed specifically at gender equality were absent, the G7 Research Group’s analysis includes commitments with gender equality at the core of the commitment’s goal and those that include gender as a related issue. Since 1975, the G7 has made 270 collective, future-oriented and politically binding commitments on gender equality, accounting for 5% of the total number identified by the G7 Research Group.

The majority of these commitments have been made since 2016. Until 2015, most were gender-related commitments, directed at, for example, addressing HIV/ AIDS, improving maternal and child health, and improving educational outcomes for girls in Africa. By 2015, gender equality became a more central G7G20SUMMITS.ORG

Conclusions (% words)

Commitments (%)

focus. There were 25 commitments made in 2015, 36 in 2016, 69 in 2017 and a record 72 commitments in 2018.

COMPLIANCE The G7 Research Group has assessed 29 core and related gender equality commitments for compliance by G7 members. Compliance averaged 73%, only slightly below the 75% average across all issues. The commitments with the highest scores focused on acknowledging women’s rights as human rights and improving health outcomes for women.

The commitments with the lowest scores focused on removing legal barriers to women’s economic participation and supporting refugee and internally displaced women and girls affected by conflict and disaster.

Across all 29 commitments assessed, the highest complying G7 member was Canada at 85%, followed by the European Union at 80% and the United Kingdom at 78%.

The lowest compliers were Italy at 46% and Japan at 69%.

CORRECTIONS The five summits with the most commitments related to gender equality

tended to have higher compliance, averaging 78%. The eight summits with the fewest gender equality commitments averaged compliance of only 73%.

The presence of certain catalysts, embedded in the text of a commitment to help guide implementation, also improves compliance. Commitments containing catalysts averaged 83% and those without averaged 74%. Commitments with the highest compliance contained a reference to a specific target, a past summit or an international organisation.

For other issues, evidence suggests that holding ministerial meetings on the same issue tends to increase compliance. There have only been two ministerial meetings on gender equality, in 2019 under the French presidency and in 2017 under the Italian presidency. Preliminary evidence suggests that hosting ministerial meetings will have a positive impact.

Thus, to improve compliance with their gender equality commitments at Biarritz, G7 leaders should make more of them, insert references to a specific target, a past summit and an international organisation, and encourage the United States to hold a ministerial meeting on gender equality before the summit it will host in 2020.

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TOWARDS GENDER, EDUCATION AND HEALTH PARITY

Equality in the law Dual factors are at play regarding gender equality: increased awareness of gender issues coupled with heightened pushback against progress.

Phumzile Mlambo-Ngcuka, under-secretary-general, United Nations, and executive director, UN Women, says Biarritz is a critical opportunity for progress on gender equality in the law

T

he world is experiencing both the best and the worst of times for gender equality.

We are operating in a context of growing sensitivity to gender issues that has led to game-changing actions and policies. At the same time, we face heightened pushback against progress and regressive positioning on gender roles. The G7 summit in Biarritz provides a critical opportunity for leaders to set their countries firmly on the path to progress.

For almost six months now I have been working alongside a diverse group of advocates as part of

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EMPOWERING WOMEN

the G7 Advisory Council on Gender Equality. We have prepared a set of recommendations for G7 leaders that focuses on strengthening legislative frameworks in four areas: ending violence against women and girls, enhancing education and health, fostering economic empowerment, and combating discrimination in public life.

Our work at UN Women has shown us that, with strong political will and dedicated investment, eliminating discriminatory laws and enacting laws in support of gender equality is not only doable – it can happen rapidly. We are working with more than 30 countries to get to the point of being able to announce in March 2020 that they have achieved equality for women under the law, with this total rising to above 40 the year after that. That is progress that G7 leaders, with their power and resources, can easily emulate and drive forward.

CALLS FOR LEGAL REFORM Along with abolishing discriminatory laws, we are calling on G7 leaders to enact law reforms that positively promote and advance gender equality and women’s empowerment, comprehensively and holistically. For instance, legal frameworks to tackle the spectrum of violence against women and girls must address all forms of violence, from sexual harassment to femicide. They must tackle the root causes, such as harmful gender stereotypes and social norms, including ideas of masculinity, while also providing comprehensive services for survivors and holding perpetrators accountable.

We recommend positive legal reforms that take into account the many places where violence occurs, including online spaces and workplaces. One key step that countries can take is to ratify the new ILO Convention and Recommendation on violence and harassment in the world of work, which recognises the right of everyone to a workplace that is free from violence and harassment, including gender-based violence and harassment. According to UN Women’s new Progress of the World’s Women report, one of the most dangerous places to be for many women and girls is their own home. The report’s data shows that more than half (58%) of all female victims of intentional homicide were killed by a family member in 2017, amounting to 50,000 deaths in the year.

That’s 137 women each day.

G7 leaders can show how the right laws can shape the whole of society beneficially, for example by ensuring women’s and girls’ equal access to education and training in science, technology, engineering and mathematics, and in digital technology and artificial intelligence, so that they cultivate the skills necessary to excel in future work. In order to be effective, all reforms must be accompanied by meaningful consultation with women’s rights groups and broader civil society, and backed by dedicated financial investment and strong accountability frameworks, which include monitoring mechanisms.

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More than half of all female victims of intentional homicide were killed by a family member in 2017, amounting to 50,000 deaths in the year. That’s 137 women each day”

PHUMZILE MLAMBO-NGCUKA Under-secretary-general, United Nations, and executive director, UN Women Phumzile Mlambo-Ngcuka has been United Nations under-secretarygeneral and executive director of UN Women since 2013. From 2005 to 2008, she served as deputy president of South Africa. Prior to that she served as South Africa’s minister of minerals and energy and deputy minister in the Department of Trade and Industry. She is the founder of the Umlambo Foundation, which supports leadership and education Twitter @phumzileunwomen  www.unwomen.org

In Biarritz, we challenge G7 leaders to commit to enacting comprehensive laws that guarantee equal rights and opportunities for women and girls, and to eliminate all the discriminatory laws in their countries that continue to hold women back. Now is the time for leaders to use their influence to advance women’s and girls’ rights, irreversibly.

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EMPOWERING WOMEN

DELIBERATIONS G7 leaders have allocated an average of 585 words (4%) to education in their final communiqués. This number fluctuated but grew to 1,135 words (11%) at the 1999 summit. At the 2001 summit it dropped to 162 words (5%) and in 2002 rose dramatically to the second highest number with 2,474 words (21%). After another significant decrease to 273 words (2%) in 2003, it increased again to 1,643 words (4%) in 2004. The numbers levelled out in 2005, but the highest number was produced at the 2006 summit with 4,857 words (16%). This was followed by an uneven decline until the 2015 summit with 415 words (3%). In 2016, the number rose again to 2,031 words (9%) and in 2017 it 34

G7 performance on

education There are catalysts the G7 should employ for increased action on education, writes Alecsandra Dragus, research analyst, G7 Research Group, as she finds that the higher the number of commitments made on education at each summit, the lower the rate of compliance

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

photo: shutterstock.com

A

lthough education has not always been top of their agenda, G7 leaders have discussed it since 1977, often in connection to other issues such as climate change, development and conflict prevention. However, there seems to be a lag between promise and delivery. The Biarritz Summit offers an opportunity to embrace the commitments made at the fourth meeting of G7 education ministers in Paris in July 2019 and elevate them to the leaders’ level, thus forwarding new actions on equality-enhancing education.

TOWARDS GENDER, EDUCATION EMPOWERING AND HEALTHWOMEN PARITY

The number of commitments on education made at each summit correlates negatively with members’ compliance”

585

Average number of words on education in communiqués

2% 69%

of all commitments relate to education

Average compliance on assessed education commitments

dropped again to 835 (10%). In 2018, it increased to 1,870 words (17%).

COMMITMENTS Since its inception in 1975, the G7 has made 97 collective, future-oriented, politically binding commitments on education. This constitutes 2% of all commitments identified by the G7 Research Group. The commitments on education include 25 related to development, 13 to inclusivity, 10 to labour market participation, seven to gender, six to research, two to innovation, and one each to economic growth and digitalisation.

From 1975 to 1997, the G7 made no commitments on education. However, a fluctuating upward trend began in 1997 and reached 14 commitments in 2004. The number dropped to two at the 2005 summit and spiked to 36 in 2006 – the highest number to date. The number dropped again to five in 2007, rose again to nine in 2008, and dropped to two in 2009. Since then, the most commitments were made in 2011 with four. The G7 made two education commitments each at the 2017 and 2018 summits.

COMPLIANCE The G7 Research Group has assessed members’ compliance with 11 commitments on education across nine years. Compliance averaged 69%, somewhat below the 75% average across all issue areas. Compliance with education commitments fluctuated frequently.

The three commitments with the highest average – 79% – were made at the 2001 and 2002 summits. The commitments that scored lowest had an average of 56%, and were from the 2004 and 2008 summits. Six months after the 2018 summit, compliance on the two education commitments was 85%. By member, the United Kingdom leads with the highest compliance of 96%, followed by France at 82% and Canada at 78%.

CORRECTIONS To improve compliance with their commitments on education, G7 leaders at Biarritz should make fewer of them. The number of commitments on education made at each summit correlates negatively with members’ compliance. The four summits with the highest number of commitments on education have an average compliance of 64%, less than the average compliance for all education commitments. The five summits with the lowest number of commitments on education have an average compliance of 73%, higher than the overall average on education.

Moreover, several catalysts, which are embedded in the commitment text and provide direction G7G20SUMMITS.ORG

votheir

ALECSANDRA DRAGUS Research analyst, G7 Research Group Alecsandra Dragus has more than four years’ experience as a researcher and compliance analyst with the G7 Research Group. Her areas of expertise include climate change and information and communication technologies.

She holds a bachelor’s degree from the University of Toronto, where she studied political science and Spanish.

Twitter @g7_rg  www.g7.utoronto.ca

for implementation, coincide with increased compliance. These include references to specific agents, international law, a multi-year timetable and relevant international organisations involved in education. There are also several catalysts that are linked with decreased compliance, which the G7 leaders at their Biarritz Summit should avoid in their communiqué. These include references to ministerial meetings, past summits and one-year timetables.

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TOWARDS GENDER, EDUCATION EMPOWERING WOMEN AND HEALTH PARITY

Her education, our future

D

espite mobilised action worldwide, this year’s UNESCO projections reveal the world is not on track to achieve quality education for all by 2030. If current trends continue, 220 million children and youth will still be out of school by then. Girls’ and women’s education is among the most powerful accelerators for human development, and UNESCO joins forces with G7 members to strengthen efforts in this area.

UNESCO is committed to ensuring that all children, youth and adults benefit from quality education and equal learning opportunities throughout life. Girls’ and women’s education is a fundamental right. It is also both key to achieving Sustainable Development Goal 4 and

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The education of girls and women is one of the most powerful drivers of human development. Audrey Azoulay, director-general, UNESCO, shares details of a new initiative designed to fast-track action on girls’ and women’s education – and enable them to play a transformative role in society

an indispensable lever for sustainable development as a whole.

This is why UNESCO considers it an utmost priority and launched, during the G7-UNESCO International Conference on Innovating for Girls’ and Women’s Education in Paris in July 2019, its new initiative, Her Education, Our Future, to fast-track action on girls’ and women’s education.

A DEVELOPMENT MULTIPLIER Education empowers girls and women – and this is the most powerful development multiplier. It allows them to improve their earnings, take better care of themselves and their families, and transmit better education and life prospects to their

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

children. It also allows them to play a transformative role in the development of their societies. If all women have a secondary education, child deaths will be cut in half, saving three million lives.

Twelve million children will be saved from malnutrition. Girls’ and women’s education saves lives and strengthens societies.

Bright girls lead to a brighter future for all.

Today, 132 million girls are out of school.

Although UNESCO’s report uncovered that on average parity in access to schooling has been reached globally, it also highlights that there are important disparities among countries, and wide gaps among the poorest families and with higher levels of education. Only two in three countries have achieved gender parity in primary education, one in two countries have achieved it in lower secondary education, and a mere one in four in upper secondary education.

Our efforts must therefore continue to reach gender parity in access to schooling where it has yet to be reached, as well as to ensure that girls and women remain in school. Today, only 50% of girls worldwide complete upper secondary school. This ratio falls to an alarming 13% in low-income countries. In the poorest families in sub-Saharan Africa, between 2013 and 2017, for every 100 boys, only 30 girls completed secondary school.

OBSTACLES TO FEMALE EDUCATION We must also ensure girls learn effectively and are provided with the same opportunities as boys. This requires having a comprehensive approach to quality education and understanding the specific obstacles girls encounter – whether they be domestic chores, violence, or early marriage and pregnancy – that keep them away from school.

UNESCO’s O3 programme – Our Rights, Our Lives, Our Future, which delivers health education across Africa – aims to keep girls in school through reducing early pregnancies and health issues. We also support programmes that fight violence

If all women have a secondary education, child deaths will be cut in half and 12 million children will be saved from malnutrition” G7G20SUMMITS.ORG

AUDREY AZOULAY Director-general, UNESCO Audrey Azoulay was elected director-general of UNESCO in 2017. A graduate of France’s École Nationale d’Administration and of the Paris Institut d’Études Politiques, she has worked in the culture sector since the start of her professional career, focusing on the funding of French public broadcasting and on reforming and modernising France’s film support system.

She has also served the European Commission, providing her expertise on issues concerning culture and communication.

Twitter @AAzoulay  www.unesco.org

Only

50%

of girls worldwide complete upper secondary school

Only

24%

of jobs in the digital sector are held by women

Only

44%

of countries have committed to ensuring parity in education

and discrimination occurring in school or conveyed through teaching and learning materials, and the stereotypes that prevent girls and women from pursuing higher studies or turning to scientific, technological or digital careers. The digital sector may be driving the evolution of today’s societies, but only 24% of jobs in the digital sector are held by women. This digital gender divide must be closed.

UNESCO’s strategy considers all of these dimensions. Her Education, Our Future thus focuses on three pillars to accelerate change: better data, better policies and better practices.

Better and up-to-date data is key in elaborating policies and education plans that focus on the right issues. Thanks to the UNESCO Institute for Statistics and UNESCO’s Global Education Monitoring Report team, we can monitor progress

and understand obstacles to girls’ and women’s education.

Better policies are the second pillar for progress as gender equality cannot be achieved without strong political will and accompanying strategies. Only 44% of countries have committed to ensuring parity in education. A critical step is to ensure that all countries have legal frameworks that call for gender equality in education. Child marriage, still permitted in 117 countries and territories, must be prohibited and girls must be allowed to continue their education after early pregnancy. To monitor legislative frameworks and communicate on the situation across countries, UNESCO launched an interactive eAtlas during the G7-UNESCO conference. We stand ready to accompany governments in developing policies that specifically address gender equality in and through education.

UNESCO is a key partner of the G7 initiative Gender at the Center, which will support such gender-responsive education sector planning.

Finally, for education to lead to effective learning and skills development for girls and women, we need to encourage better practices, in school, and out of school, through informal education and the use of new technologies, as well as lifelong learning. Through programmes involving skills development and digital skills, essential in today’s fast-changing world, UNESCO is set on empowering girls and women effectively.

This initiative will bring together UNESCO’s efforts as a whole and those of our partners, including young women themselves. In view of the G7 summit in Biarritz, we call on all countries to not only strengthen their investments, but also accelerate long-term policy changes in favour of quality education, teacher development and safer learning environments for every girl and boy.

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Cognizant

From microscopes to ‘datascopes’

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n 1831, Manchester Royal Infirmary in the UK used 50,000 leeches in treating the ill of the first great industrial city.

Twenty years later, John Leonard Riddell, of Tulane University in New Orleans invented the first practical binocular microscope. Soon after, Manchester Royal Infirmary closed its leech aquarium.

Why? Riddell’s technology allowed doctors to see – at a cellular level – what was truly causing the problem. A microscope could detect a bacteria that was causing tuberculosis. An intestinal

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Just as microscopes changed medicine, artificial intelligence is a ‘datascope’ that will give new insight to solutions previously thought unimaginable, writes Ben Pring, founder and managing director, Cognizant’s Center for the Future of Work

infection that would lead to cholera. A cell mutating into a cancer. The medical microscope not only made the leech redundant but created an industry that today employs millions of people around the world, and in the process made the world a better place.

In the transformation from leeches to microscopes, did Riddell destroy anyone’s job? Yes, probably. But microscopes were central to the explosive growth of healthcare that lead to the population and economic growth that made the modern world.

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ADVOCACY

Cognizant Today, we stand on the cusp of a transition into a new economy, in which prosperity and growth will leverage a whole new set of technologies that are set to profoundly change what we do and how we do it; central to this will be ‘the great story of our time’ – the rise of artificial intelligence.

Today, nobody would argue that a hundred years ago we should have stayed in a leech-based paradigm. But today, some argue that our new tools are too powerful and dangerous to use – that they risk being too disruptive to society and that their downsides outweigh their upsides.

To us, this argument doesn’t hold water. AI is set to revolutionise just about everything we can think of, and just as Dr Riddell’s microscope opened up new vistas that improved all of our lives, our new AI tools will function as ‘datascopes’ – in medicine and every other industry – allowing us to reach new thresholds of creativity, insight and efficiency which again will improve all of our lives.

Of course, if your current business model is a modern version of leech breeding or retailing, then AI is bad news.

You may be able to eke out a living for a generation or two, as leech magnates did for a decade or two, but nobody mourned their passing and nobody will mourn the passing of their modern equivalents.

BEN PRING Founder and managing director, Cognizant’s Center for the Future of Work Ben Pring founded and leads Cognizant’s Center for the Future of Work. He sits on the advisory board of the Labor and Work Life programme at Harvard Law School, and this year has been a Bilderberg Meeting participant. Ben is a co-author of the bestselling and award-winning books What To Do When Machines Do Everything (2017) and Code Halos; How the Digital Lives of People, Things and Organizations Are Changing the Rules of Business (2014). He holds a degree in philosophy from Manchester University in the United Kingdom.

We stand on the cusp of a transition into a new economy, in which prosperity and growth will leverage a whole new set of technologies that are set to profoundly change what we do and how we do it” DON’T FEAR NEW TOOLS – USE THEM In fact, in the medical world, it’s likely that the next generation of lawyers will argue that doctors who don’t use AI tools are guilty of medical malpractice. In another generation, using non-AI infused technology will seem as barbaric as using leeches does today.

The trick to overcoming the ‘machines will destroy human jobs’ mental trap is not to think of AI as a tool that reduces the labour component of a process, but rather as a means to increase the overall scale

of the process. AI will allow us to grapple with a world awash with information that is denser, more complex and coming at us faster than ever before.

In our recent book, What To Do When Machines Do Everything, we argue – counter intuitively to some – that in 10 years employment levels in the western world will be higher than they are today.

For some people that’s a head scratcher.

But in our vision AI is the next generation of tool that, as tools have always done, allow people to do things faster and easier and to do things that they couldn’t do without them.

AI and automation will only have a net negative effect on jobs if – and this is a huge if, that we don’t believe – we can’t find new things to do.

Dr Riddell’s microscope allowed people a panoply of new things to do – thank heavens. Our new tools, in medicine and every other industry, will allow us to grapple with a world that faces huge challenges – the environment, terrorism, food insecurity – which, to be solved, will require innovative new approaches.

The Bottom Line? New tools don’t just ‘automate people away’; they allow people to do things they have never been able to do before. That is the future of growth, opportunity and new jobs for anyone and everyone who can learn to use these tools. Anyone and everyone should learn to use them.

Twitter @Cognizant  www.cognizant.com

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TOWARDS GENDER, EDUCATION AND EMPOWERING HEALTH PARITY WOMEN

G7 performance on

health F

or its G7 2019 presidency, France has committed to strengthen primary health care and has set out three priorities here: combating unequal access to health care, getting all stakeholders to eliminate the three pandemics of AIDS, tuberculosis and malaria by 2030, and improving the effectiveness of health systems by sharing best practices.

Duja Muhanna, research analyst, G7 Research Group, shares the data on health commitments and compliance and says that robust support from G7 leaders is needed to achieve universal health coverage and fight pandemics

CONCLUSIONS Since 1975, the G7 has devoted 48,671 words to health in its summit communiqués, an average of 1,208 words at each summit. The lowest total of 12 words was in 1984 and the highest of 6,087 words was in 2016. The annual total slightly increased from 1987 to 1991 and then declined considerably from 1992 to 1995. More attention to health came after 1996.

Health became a major topic at G7 summits under French leadership in 1996 and American leadership in 1997. In 2002, the G8, now with Russia, began to prioritise health by including it in the chair’s summary. In 2006, the chair’s summary devoted a record of eight paragraphs to infectious disease. In reference to health, summit documents emphasised democratic principles and civil society participation.

G7 compliance on health, 1975–2018 100

75

50

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197

197 5 Ra

mb ouil let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve nice 198 1 Ot taw 198 a 2 Ve 198 rsail 3W les illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 ris 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7 Den 199 ver 8B irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 nan 3 Ev ask ianis lesBain 200 s 4 Se a Is 200 land 5G len 200 e agl 6 St es Pet 200 ersb 7H urg eilig 200 end 8H am okk m aido -Toy ako 200 9 L’A quil 201 a 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix

0

Compliance (%)

40

Conclusions (% words)

Commitments (%)

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

EMPOWERING WOMEN In 2016, 164 paragraphs were devoted to health.

That summit also produced a stand-alone document on health.

COMMITMENTS From 1975 to 2018, the G7 made 410 collective, future-oriented, politically binding commitments on health, as identified by the G7 Research Group.

They covered eight major components: ageing, biotechnology, drugs and medicine, antimicrobial resistance, mental health, HIV/AIDS, polio and other infectious diseases, such as tuberculosis and malaria.

Health was also integrated into other G7 issues, including the environment, development and the Sustainable Development Goals, which includes universal health coverage.

The G7 made its first health commitment in 1979.

Health-related topics were scarce until 1996, when the global HIV/AIDS pandemic led to the creation of UNAIDS. Since then, the G7 has paid increasing attention to health, spiking to 85 commitments in 2016 but declining sharply since then.

At the 2018 summit, the nine health commitments included support for strong health systems, women’s health, the International Health Regulations, and the successful replenishment of the Global Fund to Fight AIDS, Tuberculosis and Malaria in 2019. G7 leaders also reaffirmed their support for efforts to fight antimicrobial resistance, end tuberculosis and eradicate polio.

COMPLIANCE The G7 Research Group has assessed 70 of the 410 health commitments for compliance by G7 members.

Compliance averaged 76% – about the same as for all subjects overall, which averages 75%. Compliance was particularly strong for the 2007 summit, where the six assessed commitments averaged 85%. It was even higher for the 2014 summit, where the three assessed commitments averaged 91%. High compliance of 85% came with the 2015 summit, and 75% for the 2016 and 2017 commitments. Six months after the 2018 summit, the one commitment assessed on health had 69% compliance.

By member, Canada led compliance with an average of 92%, followed by the United States with 88%, the United Kingdom with 85%, the European Union with 80%, France with 77%, Japan with 74%, Germany with 72% and Italy with 58%.

CORRECTIONS The high-complying years had the most commitments on health. The top 10 complying summits averaged 88% and made 242 commitments, compared to the bottom 10, which averaged 67% and 149 commitments.

The G7 presidency can also hold meetings of the health ministers before the summit, as they did in 2006, 2015, 2006 and 2017. These years produced an above-average 53 health commitments, which had 76% compliance.

G7 compliance can be bolstered by referring in the commitment to the core health-related international G7G20SUMMITS.ORG

DUJA MUHANNA Research analyst, G7 Research Group Duja Muhanna is a research analyst with the G7 and G20 Research Groups. She joined the G7 Research Group in 2013 and has since served as a compliance analyst and lead analyst. She was a member of the field team at the 2018 G7 summit in Charlevoix. Her research interests include Middle East regional security, human rights and international law. Duja graduated from the University of Toronto with an honours bachelor’s degree in political science and history with a focus on international relations. She is a certified protocol officer from The Protocol School of Washington and is currently working as an intern for the United Nations Relief and Works Agency.

Twitter @DujaMuhanna  www.g7.utoronto.ca

76%

Average compliance on assessed health commitments

Canada leads compliance by member with

92%

organisation: the World Health Organization. Indeed, the top 10 high-complying years contained more references to international organisations in general than the bottom 10 complying years.

Linking health to other subjects, such as climate change, could also help compliance.

At Biarritz, G7 leaders should thus make more health commitments and explicitly reaffirm their strong support for the United Nations and all relevant international organisations, above all the WHO. The attendance of G7 leaders at the UN’s High-Level Meeting on Universal Health Coverage in September 2019 is an opportunity to address urgent global health issues. Robust G7 support for universal health coverage, mobilising new financing to fight pandemics and producing national action plans to combat AMR could lead to significant advances in health, stability and socio-economic development.

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TOWARDS GENDER, EDUCATION EMPOWERING WOMEN AND HEALTH PARITY

Bridging the gender and health divide

T

he World Health Organization turned 70 last year. A look back at the black and white photos from WHO’s early days highlights a troubling feature: a disturbing absence of women in senior roles. Most of the photos depict men in smart suits, some of whom are smoking at their desks.

The pipes and cigars are long gone. Unfortunately, it has taken much longer to give women their rightful place around the decision-making table.

We are proud that women are now equally represented in WHO’s senior management, and we are committed to working towards gender equality at all levels of the organisation.

For WHO, this is not just window dressing or ticking a box. It is the heart of our mission.

Equity is central to universal health coverage: the idea that everyone in a population has equal access to services that are affordable, effective and gender-sensitive.

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In many countries, women bear the brunt of inequitable health systems.

Dr Tedros Adhanom Ghebreyesus, director-general, and Dr Senait Fisseha, special envoy and chief advisor to the director-general, World Health Organization, say gender-responsive health systems are essential to achieving universal health coverage and the Sustainable Development Goals

In the Sustainable Development Goals, all countries have committed to achieving UHC by 2030. The reality is that we are a long way from that target.

At least half the world’s population lacks access to essential health services, and every year almost 100 million people are pushed into extreme poverty by out-of-pocket health costs.

In many countries, women bear the brunt of these inequalities.

Because of their reproductive health needs and longer life expectancy, women face unique challenges that can be amplified by inequality.

Globally, about 40% of women of reproductive age have not had their demand for family planning satisfied, or miss out on WHO’s recommended four antenatal care visits when pregnant. Because girls are typically less physically active than boys in childhood, they are at higher risk of obesity, a gender gap that persists throughout life. Depression, mood and anxiety disorders

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

EMPOWERING WOMEN are more common and persistent in women, and are associated with women’s traditional gender roles.

BARRIERS TO HEALTH CARE Women can also face barriers in accessing care, including lack of autonomy, violence, limited health literacy, limited access to household resources, restrictive laws and cultural mores that limit mobility and physical activity, and needing permission from their husbands, brothers or even sons to seek care.

These disadvantages are amplified for women in poor rural households, who have less access to services than in poor urban households. Lack of social health protection schemes such as maternity or reproductive health benefits creates additional health risks and financial barriers for women.

Women in the informal sector are particularly disadvantaged as they are excluded from employer-based insurance schemes.

Conversely, although men enjoy more access to resources, power and position, they also face unique health challenges. They are more likely to take risks with their health and are less willing to seek and use health care.

Men have a shorter life expectancy than women in every country, and are more likely to die prematurely from smoking, alcohol use and other behaviours with significant health risks. More men die from suicide, and men have a much higher burden of tuberculosis and poorer treatment outcomes because of delayed detection and low treatment completion rates.

All of this can result in a greater burden of care for women and increase the risk of impoverishment, especially where households are not protected by social protection schemes.

THE GENDER LINK But women’s and men’s health cannot be addressed in isolation – they are inextricably linked.

Unless explicit attention is paid to gender inequalities, health systems can fail to improve gender equality and may even worsen it since some groups have greater health needs and lower financial resources.

That applies within the health system itself. Gender pay gaps, lack of formal employment, violence and lack of representation in leadership and decision-making in the health workforce undermine its ability to deliver the care people deserve, particularly as 70% of the global health workforce is female.

Because of their reproductive health needs and longer life expectancy, women face unique challenges that can be amplified by inequality” G7G20SUMMITS.ORG

To truly achieve universal health coverage, countries need disaggregated data to understand who is being left behind and why.

But analysing data is just the first step. Prioritising and implementing a set of actions to address gender and other structural barriers is critical. Social and financial protection schemes need to consider their implications within households, communities and government institutions, taking into account gender power relations and resource allocations.

To date, only a handful of countries have taken a systems approach to addressing gender as we describe.

We have aligned ourselves with a newly formed gender and UHC alliance, with 85 members who are forging new ground.

G7 leaders can play their part by ensuring the High-Level Meeting on Universal Health Coverage at the United Nations General Assembly in September produces a resolution with a strong emphasis on gender equality.

TEDROS ADHANOM GHEBREYESUS Director-general, World Health Organization Tedros Adhanom Ghebreyesus was elected director-general of the World Health Organization in 2017, and was the first person from the WHO African Region to serve as WHO’s chief technical and administrative officer. He served as Ethiopia’s minister of foreign affairs from 2012 to 2016 and minister of health from 2005 to 2012. He was elected chair of the Global Fund to Fight AIDS, Tuberculosis and Malaria Board in 2009, and previously chaired the Roll Back Malaria Partnership Board, and co-chaired the Partnership for Maternal, Newborn and Child Health Board.

Twitter @DrTedros

SENAIT FISSEHA Special envoy and chief advisor to the director-general, World Health Organization Senait Fisseha is a reproductive endocrinologist at the University of Michigan and director of international programmes at the Susan Buffet Foundation. Professor Fisseha has a dual degree in medicine and law and is known for her work as an advocate for global reproductive health, rights and gender equality. She is the founder of the Center for International Reproductive Health Training at the University of Michigan.

She serves as a special envoy and chief advisor to the director-general of the World Health Organization.

Twitter @DrSenait  www.who.int

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TOWARDS GENDER, EDUCATION AND HEALTH PARITY

Smart investments save lives

I

s there a better investment than one that saves millions of lives? We know how to prevent people from being infected and killed by the three biggest infectious diseases afflicting humanity: HIV, tuberculosis and malaria. In many parts of the world we have already proven that we can end these epidemics. We have a plan for building on this progress and ridding every community of the burden of these three diseases by 2030. But to get there we need more innovation, better collaboration and more rigorous implementation – and more money.

The Global Fund to Fight AIDS, Tuberculosis and Malaria is a proven mechanism for maximising impact by acting as a catalyst to end epidemics. Programmes supported by the Global Fund, and led by local experts in more than 100 countries, have saved more than 27 million lives since the fund was established in 2002. It’s a smart investment.

On 10 October 2019, we face a critical moment. French president Emmanuel Macron will host the Global Fund’s Sixth Replenishment conference in Lyon to secure funding for the coming three-year period. Our target is to raise at least $14 billion. With this level of funding we can get back on track to end the three epidemics by 2030, spur domestic investment of $46 billion in health programmes and save 16 million

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Eliminating HIV, tuberculosis and malaria is within reach, but getting there requires concerted action – and more money, says Peter Sands, executive director, Global Fund to Fight AIDS, Tuberculosis and Malaria

more lives over the next three years. Such funding will also support efforts to tackle inequalities in health, including genderand human rights-related barriers to access, by working with partners including civil society and affected communities to build more inclusive health systems that leave no one behind.

In January, we published an investment case setting out why it is smart to step up the fight against the three epidemics. That should not be seen as a choice, but as the fulfilment of a promise.

Every member state of the United Nations committed to the Sustainable Development Goals in 2015, pledging to deliver health and well-being for all, to achieve universal health coverage, and to build a more prosperous, equitable and sustainable world. Success or failure in achieving the SDG target of ending the epidemics of HIV, tuberculosis and malaria by 2030 will be one of the clearest tests of that commitment.

THE NEED FOR EXTERNAL SUPPORT While governments and communities must take the lead in fighting the diseases and building inclusive health systems, those countries suffering the greatest disease burdens and lacking financial resources and capacities need external support. With the support of all partners, the Global Fund can significantly contribute to accelerating progress against HIV, tuberculosis and malaria. Adolescent girls and young women are a high priority.

If teenagers, particularly girls, are not informed and empowered to avoid getting infected with HIV, the massive increase in the

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

PETER SANDS Executive director, Global Fund to Fight AIDS, Tuberculosis and Malaria Peter Sands became the executive director of the Global Fund in March 2018. A former chief executive officer of Standard Chartered PLC, one of the world’s leading international banks, Sands has been a research fellow at Harvard University since 2015, dividing his time between the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School and the Harvard Global Health Institute and working on a range of research projects in financial markets and regulation, fintech and global health.

Twitter@PeterASands  www.globalfund.org

youth population in Africa could lead to more new infections than there were at the height of the epidemic in the early 2000s. If we do not tackle the stigma and discrimination that fuel the epidemic among marginalised key populations, we will never succeed in stopping new infections.

Getting back on track across all three diseases will require all the actors involved, including multilateral and bilateral partners, governments, civil society and the private sector, to raise their game, increasing innovation, coordinating and collaborating more efficiently, and executing programmes more effectively. More innovation is needed in diagnostics, prevention, treatment and delivery models. Only through innovation can we stretch every resource to maximise impact.

We need greater collaboration. The World Health Organization–led Global Action Plan’s commitment for the key multilaterals to ‘align, accelerate and account’ together must be translated into concrete actions. We must extend this drive for more coordinated action to encompass key bilateral partners, and to include governments, civil society, communities affected by the three diseases and the private sector. Only through intensive collaboration can we defeat the epidemics and deliver universal health coverage.

G7G20SUMMITS.ORG

14bn 27m+

$

of funding targeted in the next three years to end the epidemics

lives saved by programmes in more than 100 countries

We need a relentless focus on improving execution, using more granular and timely data. With better data we can identify the most effective interventions and target programming more effectively, implementing stronger controls to manage costs and risks, adopting best practices in patient-centred care and community engagement, and leveraging economies of scale by scaling up proven interventions rapidly. By pooling resources and engaging a diverse set of actors, the Global Fund has scale, flexibility and leverage. Such advantages of scale are powerfully demonstrated by the hundreds of millions of dollars of savings the Global Fund achieves through pooled procurement.

More investment will save millions more lives, accelerating the end of epidemics and reinforcing the trajectory towards universal health coverage. We must step up the fight.

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TOWARDS GENDER, EDUCATION AND HEALTH PARITY

At the intersection of climate heating and health The link between extreme weather events and regional health security is most conspicuous in the Caribbean – a region that serves as a barometer for the world as temperatures rise. C. James Hospedales, former executive director, Caribbean Public Health Agency, says shared vulnerability demands coordinated action on climate change

T

he Caribbean countries have made great progress in health in the past 30 years, but this progress is threatened by climate change and its unprecedented sequelae.

Hotter, drier weather overall, monster storms and inundations of rain are increasingly the norm. Challenges faced

by Caribbean people and the five million residents and 50 million visitors annually from G7 members and other countries include environmental degradation, infrastructure resilience and recovery, food and water insecurity, mental ill health, vector-borne diseases and care of persons on medications with chronic illnesses.

The health of the Caribbean people and islands is a barometer for the world, given the vulnerability of the region to extreme weather events. With high interconnectivity and shared vulnerability to natural and human-created threats, national/territorial health security is only possible if there is regional health security.

And the security of this region of small

46

island developing states is only possible when the G7 and the rest of the world take serious action on climate change.

The Caribbean Public Health Agency is working with its 24 English-, French- and Dutch-speaking member countries and regional organisations to address these harms in ways that benefit both human health and the climate. Information for action is a major theme. The quarterly Climate and Health Bulletin with the Caribbean Institute of Meteorology and Hydrology and the World Health Organization/Pan American Health Organization provides ‘joined-up’ advice, building understanding between sectors.

An expert panel guided the recently published State of Public Health Report on Climate Change and Health in the Caribbean, which provides guidance to policy and decision makers.

CARPHA supports CARICOM Moves, an initiative to address non-communicable diseases by promoting alternative transport including biking, walking and

rapid mass transit. The 6-Point Policy Package on healthy food environments encourages consumption of locally and regionally produced fruits and vegetables, which is good for population health, the planet, energy and food security, and for tourism. Major projects include preventing Zika and other mosquito-borne diseases (funded by the European Union), the Caribbean Aqua Terrestrial Solutions programme for environmental monitoring and management (supported by Germany), and the Integrated Water and Ecosystem Management programme with the United Nations Environment Programme.

SETTING AN EXAMPLE G7 leaders at their Biarritz Summit can best help by becoming an example in climate control, and supporting SIDS financially and physically as a litmus test of international development. No one knows what happens when a planet is stressed like the Earth’s is now and unprecedented weather events increase, and disasters

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and cooling systems are replaced with ones that comply with the Kigali Amendment to the Montreal Protocol, because health services now account for 4% of global emissions.

• Building human-resource capacity by training physicians, environmental health officers and other front-line providers in reporting, preventing and controlling climate-sensitive health conditions; improving mental health skills; encouraging the retention/return of healthcare workers; conducting joint training of health and other ministries (such as public works and transport) in climate resilience planning; mobilising the Caribbean diaspora; and enhancing public and policymaker communication.

• Supporting a Caribbean-wide ‘research to action’ programme to counter the effects of climate on health, especially among the most vulnerable, such as the cumulative effects of health disparities, disasters and chronic disease conditions and helping with novel vaccine trials against climatesensitive, mosquito-borne diseases such as dengue.

61% become more concatenated as planetary and socio-economic systems interact. Biblically inclined leaders should remember the Devil tempting Jesus to throw himself off the temple because God’s angels would save him. Jesus’s reply was instructive: “Thou shalt not tempt the Lord thy God!” Today, humankind is tempting the gods of nature, ignoring contemporary prophets such as the Intergovernmental Panel on Climate Change, much as the people of Israel were deaf to the prophets of old.

G7 leaders can specifically help by: • Providing human and financial resources to develop a sustainable regional climate and health surveillance system that includes the tourism sector, and that targets climate-sensitive conditions and responds in a timely manner.

• Supporting the development of the health chapters of national resilience plans to climate change, including the use of digital health technologies to enable citizen participation.

• Supporting PAHO’s ‘smart’ hospitals programme, so all health facilities are made hurricane resistant with auxiliary power, communications and water, G7G20SUMMITS.ORG

• Strengthening Caribbean disaster preparedness, community resilience, and response and recovery systems to include explicit guidelines on how to manage environmental determinants of health.

• Supporting regional projects to help address sanitation and untreated sewage going into the sea, including public engagement and the use of decentralised container-based solutions; investing in alternative transport with urban greening; promoting local agriculture so locals and visitors get healthier food on the table and energy-intensive transport methods are reduced; and improving electricity and telecoms infrastructure.

C. JAMES HOSPEDALES Former executive director, Caribbean Public Health Agency C. James Hospedales is chair of the Defeat-NCD Partnership governing board. From 2013 to 2019, he was the inaugural executive director of the Caribbean Public Health Agency and led it to become a recognised player in global public health. He was previously the coordinator of the Chronic Disease Prevention and Control at the Pan American Health Organization. From 1998 to 2006, he was director of the Caribbean Epidemiology Centre. Dr Hospedales was also a member of the Caribbean Commission on Health and Development.

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2

OUTLOOK ON THE ENVIRONMENT

G7 performance on

climate change F

rance’s President Emmanuel Macron has made climate change a top priority for the G7 Biarritz Summit he will host on 24–26 August 2019. Inequality is the overarching theme of the summit, so climate inequality will be a core feature of the climate agenda. The Biarritz Summit promises to be much more successful on climate change than the G20 Osaka Summit that preceded it on 28–29 June.

At Osaka, the G20 managed to maintain the ‘G19’ statement of support for the Paris Agreement, in large part due to Macron’s insistence. But beyond this, it did not meaningfully advance global climate governance. Although this sets a low bar, Macron is proving to be a climate champion, including by setting France apart as the only G7 or G20 member to refuse to sign a new trade deal unless all its members back the Paris Agreement.

A strong, committed host is one cause of the G7’s performance on climate change.

However, a closer look at the G7’s 44-year experience provides key insights about other causes that could be used to drive Biarritz to better control the climate crisis now at hand.

32,706 words dedicated to climate in G7 communiqués since 1975

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Environmental commitments have waxed and waned over the years, with higher compliance coinciding with heightened global consciousness on climate issues. Brittaney Warren, director of compliance and lead researcher on climate change, G7 Research Group, says sustained action is vital to control the climate crisis CONCLUSIONS Since 1975, the G7 has dedicated 32,706 words, or 5%, of its public communiqués to climate. Its first phase was the creation of climate change governance from 1979 to the late 1980s. Three summits referenced climate change, all with fewer than 100 words. The second phase coincided with the second wave of environmentalism and the end of the Cold War, from the late 1980s until 2004. Much more attention was given to climate change, with ebbs and flows throughout this period. There was a high of 491 words in 1990 and a low of 53 words in 2002. The third phase started in 2005 at Gleneagles, with a total of 2,667 words on climate change, and continues to today.

The peak came in 2009 with 5,559 words.

The low came in 2017 with 201 words – US president Donald Trump’s first summit.

COMMITMENTS Within these communiqué conclusions, the G7 made 327 climate change commitments, identified by the G7 Research Group. The first came in 1985, with none at the following three summits. It made a few commitments at each summit from 1989 to 1992, and none

at the 1993 summit. For the next decade, between 1994 and 2004, it made at least a few commitments at each summit, but never more than seven. Then, in 2005, as with the conclusions, a new phase began with 21 commitments made. This rose to 55 and 42 from the 2008 and 2009 summits respectively. This high commitment-making phase did not last, however, with the 2010 Muskoka Summit making just 10 climate commitments. Since then, no discernible trend has emerged, with commitments fluctuating between 6 and 24 per summit.

COMPLIANCE However, these conclusions and the commitments that come from them only matter if they are substantial and ambitious, and if the leaders comply with them. On the latter, with the 86 assessed commitments, compliance is a modest 74% as assessed by the G7 Research Group, about the same as the G7 average across all subjects. Overall, there has been a slowly – if sporadically – rising trend. Compliance was 75% in 1985, then declined over the next four summits before beginning an upward, fluctuating trend through the 1990s until today. Six months

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

after the 2018 summit, average compliance on climate change commitments was 69%.

The highest compliance came at the 1998 summit with 100%, the 2002 summit with 95% and the 2003 summit with 94%.

These scores coincide with the major United Nations climate meetings that produced the 1997 Kyoto Protocol and the Rio+20 Earth Summit. There was also high compliance of 86% in 1992, when the first UN Rio Earth Summit was convened. In the lead-up to the 2009 and 2015 meetings of the Conference of the Parties to the UN Framework Convention on Climate Change, which produced the Copenhagen Accord and the Paris Agreement respectively, compliance rose from preceding years to above-average levels.

CORRECTIONS This performance suggests that G7 compliance is bolstered by a surrounding UN summit on climate change. It also suggests that referencing the core international organisation or international legal instrument on climate change may help to improve compliance.

The high complying years also had the most commitments on climate change. Indeed, the top 16 complying

BRITTANEY WARREN Director of compliance and lead researcher on climate change, G7 Research Group Brittaney Warren is director of compliance and lead researcher on climate change for the G7 Research Group, the G20 Research Group and the BRICS Research Group at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She has published on accountability measures in summit commitments, the G7 and G20’s compliance and governance of climate change, and the G20’s governance of digitalisation. She has worked in Spain and Peru. She is currently working towards a master’s degree in environmental studies at York University.

Twitter @brittaneywarren  www.g7.utoronto.ca

summits averaged 85% and made 216 commitments. Compare that to the 15 bottom complying summits, which averaged 62% and 101 commitments.

Thus, in the commitments they make at Biarritz, G7 leaders should explicitly reaffirm their strong support for the UN climate regime, its climate summit in September and the COP meeting in December. They should make many

climate change commitments. These commitments should be ambitious and in line with the special report on the impacts of global warming above 1.5°C published by the Intergovernmental Panel on Climate Change. They should pledge to mobilise more money and set near-term timelines and critical paths for implementation to reflect the urgency of the climate crisis.

G7 performance on climate change, 1975–2018 100

75

50

25

197

197 5 Ra

mb ouil let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve nice 198 1 Ot taw 198 a 2 Ve 198 rsail 3W les illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 ris 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 nan 3 Ev ask ianis lesBain 200 s 4 Se a Isla 200 nd 5G l ene 200 agl 6 St es Pet 200 ersb 7H urg eilig 200 end 8H am okk m aido -Toy ako 200 9 L’A quil 201 a 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix

0

Compliance (%) G7G20SUMMITS.ORG

Conclusions (% words)

Commitments (%) August 2019 — G7 FRANCE: THE BIARRITZ SUMMIT

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OUTLOOK ON THE ENVIRONMENT

The green economy transition Holistic thinking, conscious decisionmaking and thoughtful design is required to foster a fairer, safer world for all, writes Inger Andersen, executive director, United Nations Environment Programme

W

e do not live in a fair or safe world.

A minority controls most of humanity’s wealth. We are seeing more natural disasters and migration driven by climate change, declining biodiversity and increasing resource conflicts, with the poor on the receiving end. Children die premature deaths due to pollution. Women still have less access to jobs and education, greater health risks and lower representation than men.

But the world is also changing. More than ever before, we recognise that current economic models encourage wasteful consumption and production, drive resource scarcities, and damage the environment and our health.

In response, we are accelerating down the road to more inclusive green economies – ones that are low carbon and circular. This transition is vital to the success of every international process – from the Paris Agreement on Climate Change to the 2030 Agenda for Sustainable Development to the post-2020 Global Biodiversity Framework.

As we make this transition, we have the chance to make the world a fairer and safer place by ensuring that the environmental, economic and social aspects of green growth benefit everyone. Green economies, after all, focus on minimising waste, resources and materials throughout the production and consumption process.

This results in improved equity, health outcomes and job opportunities.

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But a just transition will not happen by accident. It needs a conscious decision and design. As we redesign our economies, we need to think holistically – not just an adjustment here or a tweak there. We need system-wide transformations that adhere to the five principles of the green economy: human well-being, justice for all, respecting planetary boundaries, efficiency and sufficiency, and good governance.

INGER ANDERSEN Executive director, United Nations Environment Programme Inger Andersen is the executive director of the United Nations Environment Programme. Between January 2015 and May 2019, she was the director-general of the International Union for the Conservation of Nature (IUCN). Andersen has more than 30 years of experience in international development economics, environmental sustainability and policymaking and has held various leadership roles at the World Bank and United Nations.

Twitter @unenvironment ‫‏‬  www.unenvironment.org

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We are in a better position to manage the transition now than any of our predecessors, who more often than not adapted to change rather than shaped it”

To wring out every drop of benefit from the green economy and ensure fairness, we must remember that transitions also have negative effects. For example, while globalisation brought large, if uneven, benefits, it led to job losses. Globally, 22 million manufacturing jobs were cut between 1995 and 2002, even as industrial output increased by 30%.

SOLUTIONS FOR DISPLACED WORKERS The challenge is not that there will be fewer jobs in a green economy.

The International Labour Organization says that the switch to cleaner and more efficient forms of energy, for example, will actually bring a net gain of 18 million jobs. But issues will arise regarding stranded assets and communities, lost revenues and skill sets – particularly in economies and communities that depend heavily on natural resource extraction. This means that pathways to green economic models must include policies on retraining, local solutions and support for displaced workers.

We also must consider the role that digitalisation, which is increasingly defining the future of work, will play. To be inclusive, we will require robust institutions and a strong public sector to rein in the concentrating tendencies of capital and ‘winner takes all’ technologies,

30%

The increase in industrial output from 1995 to 2002, but G7G20SUMMITS.ORG

22m

manufacturing jobs disappeared during this period

as economists Mariana Mazzucato and Thomas Piketty so eloquently argue in their work on these issues.

There is much more that we can and need to do as part of the just transition, as the UN Environment Programme report Uncovering Pathways towards an Inclusive Green Economy lays out.

We must create social floors to guarantee basic healthcare and income security. We must create institutions and mechanisms for equitable access to, and sharing of, benefits from natural resource development. We need to end fossil fuel subsidies.

As UN secretary-general António Guterres has noted, it is time to tax pollution, not people. We need to get the global financial system to shift its capital behind sustainability. We need to invest in education, skills and ecological infrastructure.

The transition will be complex and difficult to manage. But we are in a better position now than any of our predecessors, who more often than not adapted to change rather than shaped it. We have the knowledge, tools and skills we need to design robust and green economic models that increase food security and livelihoods, access to energy, clean air and water, and allow ecosystems to thrive.

The transition to a green economy will not solve all of the world’s problems. There will still be inequality, upheaval and conflict. But we can make the world fairer, safer and more sustainable for generations to come. And isn’t that what all of us really want?

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AkzoNobel

Sustainability is business

Cities across the world face new, interlinked sustainability challenges that are redefining the role of private-sector business, but progress is being made in cleansing urban environments and supporting international collaboration on pressing environmental issues, writes Pamela Phua, general director of Vietnam, decorative paints South Asia, AkzoNobel

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ADVOCACY

AkzoNobel

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ccording to the UN Chronicle, energy consumption and air pollution are two of the most critical issues for the 3.5 billion people who live in urban communities.

The World Health Organization calculates that nine out of 10 people around the world currently breathe unhealthy air, leading to pollution-related diseases that cause seven million deaths every year.

When it comes to energy – most of which is still generated from non-renewable sources – our cities are using more than ever before, with urban demand accounting for as much as 80% of global production.

At AkzoNobel, sustainability is business and business is sustainability.

We take our responsibility to depollute the paints and coatings in our urban environment seriously, and we are committed to applying these lessons throughout the supply chain to address both energy use and air quality.

We have made an ongoing commitment to invest in sustainability, innovation and society as part of our vision for a cleaner and healthier world. The foundations of our work are built on a review of the risks and opportunities within the context of our key market segments to 2050.

This has demonstrated to us the need to leverage the latest knowledge across science and society, identify and mitigate our challenges, and develop strategies to make the future better.

For example, South-East Asia is a market experiencing robust economic and population growth, which requires high levels of construction to meet the demands of a new middle class and rapid urbanisation. However, as our research identified, this also means that there is vast opportunity to pioneer new solutions.

A STRATEGY FOR CLEANER AIR In all industries, environmental impact occurs throughout the manufacturing process, from R&D to the ultimate application of products.

When you look at the total carbon emissions in the supply chain, it becomes clear that the key to reducing our environmental impact is to work collaboratively.

To lead the change, we have assembled a cohort of 4,000 scientists who will work closely with our global customer base to push for new, suitable and sustainable solutions. Further, we are undertaking

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AkzoNobel takes its responsibility to depollute urban environment

Our renewable energy supply strategy has three focus areas: to protect our current renewable share; support cost-effective, large energy ventures; and explore commercially feasible on-site renewable energy generation”

Environmental targets ••

Environmental: Achieve zero carbon emissions in our own operations; source 100% renewable energy

••

Social: Reduce use of volatile organic compounds and hazardous substances

••

Economic: Achieve zero waste and 100% resource productivity in our operations

trials of our depolluting paint for launch in three megacities in India and Indonesia that struggle with severe pollution issues.

In our work to depollute air, we can now use photocatalysis to trigger chemical reactions. In this process, photoactive titanium dioxide absorbs sunlight and reacts with oxygen and moisture to generate highly reactive free radicals, which in turn can contribute to the abatement of noxious emissions from motor vehicles, and decompose harmful gases such as nitrogen oxide, sulphur dioxide and VOCs. Some impacts occur beyond the scope of our processes, with our suppliers and customers. For example, in paints and coatings more than 98% of our carbon footprint comes from upstream (supplier) and downstream (customer) activities.

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AkzoNobel Upstream, we know that the emissions from raw materials such as pigments, resins and solvents are our greatest impact, so we have joined forces with suppliers to drive the use of bio-based materials, recycled content, or raw materials produced with renewable energy.

We closely monitor the cradle-to-grave life cycle of our raw materials and finished products to reduce Volatile Organic Compounds, the impact of transportation and other environmental fallout.

CREATING BETTER ENERGY Energy is one of our single biggest expenditures – in some products it accounts for as much as 80% of our variable cost – and such overheads directly affect our bottom line.

AkzoNobel ••

11-year member of the Dow Jones Sustainability Index

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First-place ranking four of the five past years

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50% of products now deliver sustainability benefits to customers

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20% or more of our products deliver industry-leading sustainability benefits

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40% renewable energy used

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100% carbon-neutral target set for 2050

An iconic view of Ho Chi Minh City, Vietnam

Case study:

VIETNAM Vietnam faces the challenge of sustainable development and urbanisation in a uniquely historic environment, home to many famous architectural structures. To overcome these, AkzoNobel offers a wide range of sustainable products in the local market, as well as practical support to those who live and work there.

In the first quarter of 2019, we hosted two events on urban heritage preservation, which saw 450 experts discuss a masterplan for Vietnamese heritage. To support the next generation in taking over this work, we offer scholarships for architecture students and often host initiatives such as the Orange ASEAN Factory. AkzoNobel has also volunteered thousands of paints and working hours to repaint iconic structures, schools, urban alleys and old apartment buildings.

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Our renewable energy supply strategy has three focus areas: to protect our current renewable share; support cost-effective, large energy ventures; and explore commercially feasible on-site renewable energy generation.

By investing in these areas, we are securing profitability in the long term.

However, in finding cost-effective solutions, we need to identify those that can withstand the test of time.

We have leveraged the power of energy to support our sustainability programme and renewables now power 45% of our requirements, meeting our 2020 target ahead of schedule. We found that in doing this we have created direct benefits for our business by lowering costs and risk, and creating new value chains.

We draw power from solar, wind, natural gas and biomass, through multiple suppliers, meaning we can depend on an extremely reliable supply with low risk exposure to power shortages, rising oil prices or changes in carbon pricing.

For example, we are sourcing power direct from newly developed wind farms, together with Google, Philips and DSM in the Netherlands.

Adding renewables to our profile also improves the sustainability of our products, helping us retain and acquire customers and find new ways of creating value for them.

In cases of oversupply, we can use existing facilities to turn electricity into green hydrogen, which can be sold to produce chemicals or as a new product. The Dutch city of Groningen is already running a pilot with two hydrogen buses, supplied

by AkzoNobel.

Renewable energy is characterised by variation in supply. As we connect more wind parks and solar panels to our national grids, these swings will only become more severe and occur more often. Companies like AkzoNobel can play an important role in balancing these swings, and can even use them to create mutual benefits.

INVESTED IN TOMORROW Sustainability is not an afterthought, it is our way of doing business. It is woven into our DNA and is a powerful means of attracting customers.

To achieve carbon neutrality by 2050, economic, environmental and social factors are accounted for in our daily work with customers, throughout the product

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ADVOCACY

AkzoNobel development lifecycle and across our operations, and we have three specific targets in place (see previous page).

More than half our products provide sustainability benefits to those who use them, but often we must also engage in leading work beyond our own organisation.

We have allocated significant sums to the paints and coatings open innovation platform and a small yet innovative manufacturing acquisition in the UK. To drive the next wave of sustainable solutions, we will make a further investment in our innovation activities before the end of the current decade.

By 2020, we are targeting 20% of revenue from products that are more sustainable than those of our competitors, and up to 30% more efficient in resource and energy use across the entire value chain. We also aim to maintain eco-premium solutions at a sustainable 20% of revenue through 2020.

These investments are key to long-term sustainable value creation.

We know that our in house innovation can achieve higher efficiency at lower impact, in line with our philosophy of delivering more with less.

ADDING COLOUR FOR THE NEXT GENERATION To ensure the best ideas are developed for the benefit of future generations, we must seek out and promote diversity of thought – and that can only be done by collaborating with diverse teams.

To drive the paints and coatings industry through its next phase of modernisation, we at AkzoNobel have created a new ecosystem for innovation by launching Paint the Future, an innovation challenge with an open invitation to collaborate and turn exciting potential into brilliant reality.

This year, we will combine our global reach with the agility of thought present across the global start-up and scale-up environment, to push the boundaries of what our industry can achieve.

The aim is to connect disruptive technologies to accelerate the dynamic world of paints and coatings, based on five pillars: smart application, enhanced functionality, circular solutions, life science infusion and predictable performance.

In the first round, 1,150 members submitted 158 ideas: from turning waste into bio-oils and minerals to using bio-based methods to capture and convert the carbon dioxide from steelworks. Other G7G20SUMMITS.ORG

hey would likeher picture / bio to PAMELAtPHUA

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Pamela Phua has more than 20 years’ experience in research, development and innovation in the coatings industry. In her current role as director of RD&I for AkzoNobel, she drives new technology development and product implementation across the South-East, South Asia and Middle East regions. Phua was instrumental in setting up the global research and laboratory operations for AkzoNobel Decorative Paints (Global Exterior Wall

t o f i l l a s p acapacity, c e aPamela f t e rimplements t h a t the functional and production innovation strategy for

ideas used renewable and long-lasting dyes from biomass and self-cleaning, air-purifying coatings.

Twenty-one outstanding start-ups were selected for the accelerator programme.

Now concluded, SAS Nanotechnologies (from the US), QLayers (Netherlands), Interface Polymers (UK), Apellix (US) and Alucha Recycling Technologies (Netherlands) were rewarded by AkzoNobel, while Octo (the Netherlands) took home the KPMG Scale-up Award.

We are committed to continued work with the recipients of these prizes, to pursue sustainable business opportunities through joint collaboration agreements.

exterior wall paint. She spearheads the RD&I functional excellence, standards and capability, and the efficient delivery of processes as the approved standards and processes across the globe.  pamela.phua@akzonobel.com

In March this year, we launched AkzoNobel Cares, an amalgamation of our social programmes, including the Community Programme, Let’s Colour, Community with many repainting projects, and the Education Fund, as well as smaller local activities.

Throughout this work, we aim to deliver shared value by helping communities, strengthening our reputation and building the pride our team members hold in the company.

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OUTLOOK ON THE ENVIRONMENT

G7 performance on energy

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s G7 leaders gathered for the 2018 Charlevoix Summit, pundits questioned whether the United States, under President Donald Trump, would recognise clean energy as a key driver of jobs and economic growth, or whether Trump would push back even further than he already had on those key elements of the Paris Agreement aimed at decarbonising the energy sector.

Charlevoix produced a six-plus-one outcome with all but the United States agreeing on the importance of ensuring that energy systems drive sustainable economic growth by supporting clean energy innovation through investment in resilient energy systems and infrastructure. The United States unilaterally committed instead to work “closely with other countries to help them access and use fossil fuels more cleanly and efficiently”.

DELIBERATIONS Energy policy has been a cornerstone issue for the G7 since its first meeting in 1975 in Rambouillet, France.

Here, the leaders noted their intent to “spare no effort in order to ensure more balanced conditions and a harmonious and steady development in the world energy market”.

By 1979, the G7 had made the first energy-climate connection, calling for “alternative sources of energy” that would “help prevent further pollution” caused by the “increases of carbon dioxide and sulphur oxides in the atmosphere”.

Over the next decade, the leaders acknowledged the need to halt the concentration of carbon dioxide in the world’s atmosphere through conservation, efficiency and energy alternatives.

By the early 2000s, direct linkages between energy security, economic growth, environmental protection and sustainable development were reinforced. Leaders 56

Ella Kokotsis, director of accountability, G7 Research Group, asks whether the G7 can fully utilise clean energy as a key driver of jobs and growth without the collective support of all seven leaders

increasingly supported the idea that improved energy efficiency and diversification of energy sources, largely through renewables, could help address climate change by reducing the greenhouse gas intensity of energy use and production.

Since 2005, the G7 has consistently pursued forward-looking energy policies, including diversifying the energy supply mix, encouraging the use of clean fossil fuels, promoting the development of renewable energy sources, endorsing investments in the energy sector, and expanding scientific and technological research and development.

ELLA KOKOTSIS Director of accountability, G7 Research Group An expert on summit accountability, Ella Kokotsis has attended most G7 summits since 1994, has written broadly on various aspects of summitry and global governance, has directed the research and publication of numerous analytical documents, and has spoken extensively at summit-related conferences worldwide. Her scholarly research methodology for assessing summit compliance continues to be the basis for the annual accountability reports produced by the G7, G20 and BRICS Research Groups. She is the author of Keeping International Commitments: Compliance, Credibility and the G7 Summits and co-author of The Global Governance of Climate Change.

Twitter @g7_rg  www.g7.utoronto.ca

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G7 performance on energy, 1975–2018 100

75

50

25

197

197 5 Ra

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0

Compliance (%)

COMMITMENTS Since 1975, the G7 has generated a total of 458 energy commitments as identified by the G7 Research Group.

Energy policy ranks second, after development, in the total number of commitments made by summit leaders.

What began with three energy commitments at the first summit in 1975 quickly rose to 43 by 1979. The number of commitments on energy varied during the 1980s and 90s, ranging from zero to 23, and then spiked dramatically to 57 at the 2005 summit. The following year, Russia, hosting its first and only G8 summit, placed energy security at the forefront of the agenda, with that summit generating a record 78 energy commitments as a result.

COMPLIANCE The G7 Research Group has assessed 21 energy-related commitments made since 2001 for compliance by G7 members. It has found average compliance of 81%, higher than the 75% average across all issues assessed.

The European Union, United States and United Kingdom rank as the first, second and third highest compliers, followed by Germany, Canada, France, Japan, Italy and Russia. Compliance has varied over time, with the highest scores generated after the 2005 and 2006 summits, when energy security was given priority on the leaders’ agenda.

CORRECTIONS These commitments only matter if they are G7G20SUMMITS.ORG

Conclusions (% words)

458 energy commitments since 1975

81% Average compliance on energy commitments

Commitments (%)

complied with. The G7 can improve its compliance with its energy commitments by employing several accountability measures. One such measure is holding pre-summit ministerial meetings. Preliminary research from the G7 Research Group has found that compliance is higher on issues preceded by a supportive ministerial meeting.

Based on this research, the G7 should generate more energy commitments. The six summits that averaged the highest compliance (89%) generated 167 commitments altogether, compared to the 90 commitments produced by the five summits that averaged the lowest compliance (72%).

On substance, these commitments should diversify energy supplies, advance renewable technologies, invest in resilient energy systems, and find better solutions for the sustainable extraction and use of fossil fuels.

Ensuring open, transparent and secure global markets for energy resources and technologies will continue to be a top priority for the G7 leaders at Biarritz. Serious questions remain, however, on how energy resilience can advance when the G7 is trying to fill the leadership gap left by the United States. Leaders in Biarritz will remain committed to strengthening their collective energy security to ensure that energy systems continue to drive sustainable economic growth. To succeed, the United States must work with its G7 partners to ensure that open and secure global energy markets remain a top summit priority.

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OUTLOOK ON THE ENVIRONMENT

Renewable energy represents not only a tool to reduce climate heating, but also a deep, largely untapped pool of job and wealth creation, writes Francesco La Camera, director-general, International Renewable Energy Agency

Big

, ambition big reward T

he Climate Action Summit convened by António Guterres, secretary-general of the United Nations, is rapidly approaching on 23 September 2019. All countries are called on to identify ways and means to raise their ambition for the full implementation of the Paris Agreement.

Guterres made it clear that the summit will not just be a series of speeches, but 58

should be the moment to collect concrete and factual commitments to fight climate change and its devastating impacts. The stakes are high. Under his leadership, this gathering of world leaders bears the unique opportunity to champion ambitious climate action.

The recent, historically high heatwaves have confirmed the urgency of the need to act.

The pace of global decarbonisation must accelerate – to protect our planet and to ensure a low-emission, climate-resilient world in line with the 2030 Agenda for Sustainable Development and the Paris Agreement. According to the Intergovernmental Panel on Climate Change, we now have only 11 years left to keep the global temperature rise below 1.5°C above pre-industrial levels. In

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this timeframe, renewable energy and energy efficiency are the only instruments available that can effectively achieve the required decarbonisation of the energy sector. We have the tools and technologies at hand. Accelerating renewables and energy efficiency is the way forward.

At IRENA, we have shown that by increasing renewables at a rate six times faster than the current rate, we can fulfil climate commitments and avoid greater loss to polar regions, island states and overwhelmed climate-vulnerable societies. Achieving this acceleration will require more investment. However, due to dramatically falling renewable costs, the global investment needed to meet the Paris targets has fallen by 40% from previous estimates. This is possible because renewable power has become the cheapest electricity source in many parts of the world.

COST-EFFECTIVE ENERGY Falling technology costs have made solar, wind and other renewables the backbone of energy decarbonisation and the most effective climate action tool available.

Despite the price tag, investing in the energy transformation is undeniably worth it. IRENA has calculated that a climate-safe path could save the global economy up to $160 trillion cumulatively over the next 30 years in avoided health costs, energy subsidies and climate damages. Every dollar spent will pay off between three and seven times.

Furthermore, renewables run the industrial engine, driving fair, inclusive and sustainable economic development.

The shift to renewables is a veritable job-creating machine. Last year, more than 11 million people worldwide had jobs in the renewables sector. More countries manufacture, trade and install renewable energy technologies every year, as policymakers increasingly recognise the job creation opportunity.

A clear opportunity for governments to increase ambition lies in the upcoming round of national climate commitments.

Under the Paris Agreement, countries have agreed to progressively raise the ambition of their climate plans to limit global warming. Nationally determined contributions provide a strong framework to reduce emissions and create resilient economies and societies for the future.

But although the global installed capacity of renewable power grows on average by 8.5% every year, implementing renewable targets in G7G20SUMMITS.ORG

FRANCESCO LA CAMERA Director-general, International Renewable Energy Agency Francesco La Camera assumed the role of director-general of IRENA in April 2019. He formerly served as director-general of sustainable development in Italy’s Ministry of Environment, Land and Sea. As the national coordinator for climate, environment, resource efficiency and the circular economy, he led the Italian delegation at several Conferences to the Parties to the United Nations Framework Convention on Climate Change. He participated in several G7 environment ministers’ meetings as host under Italy’s G7 2017 presidency. He served as co-chair of the Africa Centre for Climate and Sustainable Development and co-chaired the Financial Platform for Climate and Sustainable Development.

Due to dramatically falling renewable costs, the global investment needed to meet the Paris targets has fallen by 40% from previous estimates”

Twitter @flacamera  www.irena.org

current NDCs would only lead to an annual average deployment of around 3.6% by 2030. Hence, these targets are yet to meet the reality of renewable energy growth. NDCs clearly leave renewable energy potential untapped.

IRENA has been supporting countries in their transition to a sustainable energy future. We will strengthen our work in preparing more ambitious climate pledges based on a strong renewable energy pillar while continuing to work on long-term climate and energy strategies. The recently signed strategic partnership between IRENA and the UN Climate Change Secretariat will facilitate these efforts.

IRENA stands ready to support its members in raising their climate ambitions by making full use of their renewable energy and energy efficiency potential.

Through renewable energy, we today possess the means and technology to tackle climate change. Now is the time for bold leadership and political commitment that matches the relentless vigour of our youth marching on the streets for more climate ambition.

Now is the time for decisive action.

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OUTLOOK ON THE ENVIRONMENT

G7 performance on biodiversity

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iodiversity is directly related to human security and the well-being of ecosystems, and key to global environmental governance and sustainable development. France’s 2019 G7 presidency has adopted it as a priority for the Biarritz Summit. The G7 environment ministers’ meeting, held alongside the plenary of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services in Metz on 5–6 May 2019, sought to address biodiversity through an inclusive and equitable approach. The ministers adopted the Metz Charter on Biodiversity and introduced biodiversity finance for the G7’s consideration. As the world enters the last year of the Strategic Plan for Biodiversity 2011–2020, the Biarritz Summit is a critical juncture at which to craft global frameworks on biodiversity, facilitated by a consortium of the world’s most developed economies.

CONCLUSIONS G7 leaders first addressed biodiversity in 1987, dedicating 145 words to the subject in their concluding communiqué. In 1988, biodiversity accounted for 190 words. Since then, it has been addressed at every summit except for 2017.

The 2009 summit reached a record high of 1,687 words, representing 5.4% of the total words across all issues in the outcome documents. This followed a steady increase since 2004. Summits in 2003 and 2018 also produced a four-digit number of words on the subject. Earlier references to biodiversity had dipped below 350 words between 1992 and 2002, except in 2000, with 759 words.

COMMITMENTS The G7 Research Group has identified a total of 162 collective, politically binding commitments on biodiversity. The first came in 1987, with two commitments addressing endangered species, air 60

Angela Min Yi Hou, co-chair of summit studies, G7 Research Group, finds that more commitments equal higher compliance when it comes to biodiversity, and says leaders should capitalise on Biarritz to apply political will to acute environmental problems

and water pollution, destruction of tropical forests and bioethics. Biodiversity commitments spiked in 1990, 2003, 2009 and 2018. The 1990 summit made 18 biodiversity commitments. A record 28 commitments were made in 2003. After an incremental increase between 2006 and 2009, the 2009 summit produced another peak of 13 biodiversity pledges. The 2018 summit made 17 commitments. Yet the summits in 1999, 2004, 2005, 2012 and 2017 made none at all.

Most G7 commitments on biodiversity focused on the sustainable management and protection of tropical forests, oceans and ecological balance. They also frequently referred to international institutions and conferences such as the United Nations Environment Programme and the 1992 UN Conference on Environment and Development.

Orangutans are among the world’s most endangered species due to habitat destruction and illegal hunting

ANGELA MIN YI HOU Co-chair of summit studies, G7 Research Group Angela Min Yi Hou is co-chair of summit studies with the G7 Research Group, a compliance director with the G20 Research Group and an editor with the BRICS Research Group, all based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She is starting graduate studies at the Geneva Institute of International and Development Studies.

Twitter @g7_rg  www.g7.utoronto.ca

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G7 Research Group

In the rapidly globalizing world of the 21st century, the Group of Seven major market democracies serves as an effective centre of comprehensive global governance. G7 members – the United States, Japan, Germany, the United Kingdom, France, Italy, Canada and the European Union – contain many of the world’s critical capabilities and are committed to democratic values. At its annual summit and through a web of G7-centred institutions at the ministerial, official and multi-stakeholder levels, the G7 does much to meet global challenges, especially in the fields of security, sustainable development and economics.

The G7 Research Group is a global network of scholars, students and professionals in the academic, research, media, business, non-governmental, governmental and intergovernmental communities who follow the work of the G7 and related institutions. The group’s mission is to serve as the world’s leading independent source of information, analysis and research on the G7. Founded in 1987, it is managed from Trinity College, the Munk School of Global Affairs and Public Policy, and the Department of Political Science at the U ­ niversity of Toronto.

Professional Advisory Council members, Special Advisors, international affiliates and participating researchers together span the world. Through the G7 Research Group, Trinity’s John W. Graham Library has become the global repository of G7/8 documents, transcripts, media coverage, interviews, studies, essays, memorabilia and artifacts.

The G7 Information Centre at

www.g7.utoronto.ca The online G7 Information Centre (www. g7.utoronto.ca) contains the world’s most comprehensive and authoritative collection of information and analysis on the G7. The G7 Research Group assembles, verifies and posts documents from the meetings leading up to and at each summit, the available official documentation of all past summits and ministerial meetings (in several G7 languages), scholarly writings and policy analyses, research studies, scholarship information, links to related sites and the “background books” for each summit now published by GT Media and the Global Governance Project (g7g20summits.org).

The website contains the G7 Research Group’s regular reports on G7 members’ compliance with their summit commitments, as well as other research reports.

BOOKS ON THE G7 AND RELATED ISSUES FROM ROUTLEDGE Accountability for Effectiveness in Global Governance

The Global Governance of Climate Change

Marina Larionova and John Kirton, eds.

John Kirton and Ella Kokotsis

The European Union in the G8

The New Economic Diplomacy

Marina Larionova, ed.

Nicholas Bayne and Stephen Woolcock

The G8-G20 Relationship in Global Governance

The G8 System and the G20 Peter I. Hajnal

Marina Larionova and John Kirton, eds.

G7 RESEARCH GROUP Munk School of Global Affairs and Public Policy, 1 Devonshire Place, Room 209N, Toronto, Ontario M5S 3K7 Canada Telephone +1-416-946-8953 • E-mail g7@utoronto.ca • Twitter @g7_rg www.g7.utoronto.ca

OUTLOOK ON THE ENVIRONMENT

G7 performance on biodiversity, 1975–2018 100

75

25

197

197 5 Ra

mb ouil let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve nice 198 1 Ot taw 198 a 2 Ve 198 rsail 3W les illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 ris 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 nan 3 Ev ask ianis lesBain 200 s 4 Se a Is 200 land 5G l e 200 nea 6 St gle s Pet 200 ersb 7H urg e ilige 200 8H nda okk mm aido -Toy ako 200 9 L’A quil 201 a 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix

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Compliance (%)

COMPLIANCE The G7 Research Group has assessed 12 biodiversity commitments for compliance by G7 members. It found compliance averaged 76%, close to the overall average of 75% for all issues. By member, Japan led, followed closely by the United Kingdom and the United States.

The first commitment assessed in 1987 scored 65%. The second, a promise to cooperate with Brazil on tropical rainforest protection made at the 1990 summit, scored 0%. Compliance has been inconsistent. The mid 2000s witnessed a gradual decrease, and then an incremental increase in compliance between 2008 and 2015.

The years with the highest compliance rates include 2015 with 91%, 2009 with 89% and 2003 with 88%.

The effects of deteriorating climate conditions were visible in 2003, one of the warmest years on record, leading to fatalities in a European heatwave. Scientific evidence published in 2003 also attributed extreme weather events to climate change. In 2009 and 2015, the summits took place just before the meetings of the Conference of the Parties to the UN Framework Convention on Climate Change that produced the Copenhagen Accord and the Paris Agreement respectively. G7 compliance on biodiversity thus correlates with shock-activated vulnerability and key UN summits for global environmental governance.

The Biarritz compliance cycle will likely spur high 62

Conclusions (% words)

Commitments (%)

compliance with biodiversity commitments, given recent extreme weather events and the Climate Action Summit convened by the UN secretary-general in September 2019.

CORRECTIONS Preliminary compliance data suggests that G7 leaders should make a high quantity of biodiversity commitments at the Biarritz Summit. With the notable exception of the 1990 summit, all other commitment peaks at G7 meetings translated into higher compliance.

Years of higher average compliance, notably 2003 and 2009, made 28 and 13 biodiversity commitments respectively. Six months after the 2018 summit, with 17 commitments on biodiversity, compliance was 78%.

Thus, G7 governments are more likely to comply when more biodiversity commitments are made.

Second, the G7 should consider embedding one-year or multi-year timetables in its commitments. Higher compliance comes with commitments that refer to timetables such as the Millennium Development Goals, the 2010 Biodiversity Target or an upcoming ministerial meeting. In light of the 15th meeting of the COP to the Convention on Biological Diversity in Kunming, China, in 2020, the G7 leaders can capitalise on Biarritz as a key opportunity to address biodiversity with ambition and political will, especially prior to a global review of the CBD’s Strategic Plan for Biodiversity 2011–2020.

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Note: Charlevoix data is pre-stakeholder feedback

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G20 Research Group G20 Research Group The G20 Research Group is a global network of scholars, students and professionals in the academic, ­research, business, non-governmental and other communities who follow the work of the G20 leaders, finance ministers and central bank governors, and other G20 institutions. It is directed from Trinity College, the Munk School of Global Affairs and Public Policy and the Department of Political Science at the ­University of Toronto, which also host the G7 Research Group and the BRICS Research Group.

Our mission is to serve as the world’s leading independent source of information and analysis on the G20. As scholars, we accurately describe, explain and interpret what the G20 and its members do. As teachers and public educators, we present to the global community and G20 governments the results of our research and information about the G20. As citizens, we foster transparency and accountability in G20 governance, through assessments of G20 members’ compliance with their summit commitments and the connection between civil society and G20 governors. And as professionals, we offer evidence-based policy advice about G20 governance, but do not engage in advocacy for or about the G20 or the issues it might address.

Publications include:

Accountability for Effectiveness in Global Governance,by Marina Larionova and John Kirton, eds. (Routledge)

China’s G20 Leadership, by John Kirton (Routledge)

The Global Governance of Climate Change: G7, G20 and UN Leadership, by John Kirton and Ella Kokotsis (Routledge)

G20 Governance for a Globalized World, by John Kirton (Routledge) (also available in Chinese)

The G20: Evolution, Interrelationships, Documentation, by Peter I. Hajnal (Routledge)

Background Books and eBooks For each summit the G20 Research Group produces a “background book,” available free of charge in print and online, outlining the perspectives of the leaders and key stakeholders and offering analysis by leading global experts. It also works with GT Media on the Global Governance Project to produce related analysis and publications.

Compliance Assessments For each summit the G20 Research Group, working with the Russian Presidential Academy of National Economy and Public Administration (RANEPA), assesses each G20 member’s compliance with the previous summit’s priority commitments. Cumulative compliance assessments are compiled on key issues.

Pre-summit Conferences With local partners in the country hosting the summit along with a core group of international partners, the G20 Research Group produces or participates in conferences in the lead-up to each summit analyzing the institutional workings of the G20 and the issues, plans and prospects for the summit.

Field Team The G20 Research Group sends a field team to each summit and some ministerial meetings to assist the world’s media, issue its own reports

and analyses, allow students to witness world politics at the highest level at close hand, and collect the documents and artifacts uniquely available at the summit, to build the G20 archives at Trinity College’s John Graham Library and online at the G20 Information Centre website.

G20 Information Centre @ www.g20.utoronto.ca The G20 Information Centre is a comprehensive permanent collection of material available online at no charge.

It complements the G7 Information Centre, which houses publicly available archives on the G20 as well as the G7 and G8, and the BRICS Information Centre, and the Global Governance Project at g7g20summits.org.

Speaker Series The G20 Research Group hosts occasional speakers in its efforts to educate scholars and the public about the i­ ssues and workings of the G20. Past speakers have included senior officials of the International Monetary Fund and the World Bank and scholars and policy makers from Mexico, Turkey, China, Australia, Brazil, Italy and elsewhere.

Research The G20 Research Group conducts research on the causes of summit and system performance and the G20’s relationship with the G7, BRICS, United Nations and other formal multilateral institutions.

G20 Research Group Munk School of Global Affairs and Public Policy, 1 Devonshire Place, Room 209N, Toronto, Ontario M5S 3K7 Canada Telephone 1-416-946-8953 • E-mail g20@utoronto.ca • Twitter @g20rg www.g20.utoronto.ca

OUTLOOK ON THE ENVIRONMENT

Bolstering biodiversity The benefits of biodiversity are far-reaching, and the G7 leaders are uniquely positioned to embed biodiversity indicators, incentives and investments in policymaking for the benefit of all, writes Cristiana Paşca Palmer, executive secretary, UN Biodiversity

T

his year’s G7 summit in Biarritz, France, provides a unique platform to further position biodiversity conservation and nature-based solutions at the centre of the global agenda, emphasising their fundamental role in climate change mitigation and adaptation, as well as food security, poverty reduction, and more inclusive and equitable development, among other critical global issues.

On the margins of the G20 summit in June, the foreign ministers of France and China, with the United Nations secretary-general, emphasised the link between climate change and biodiversity, and the need for a prompt global response to biodiversity loss. They reiterated their determination to contribute to the comprehensive and participatory process of developing the next global biodiversity framework. They stressed the need to scale up financing for nature-based solutions, especially considering major international challenges such as climate change and sustainable development.

As the G7 environment ministers stated in their landmark Metz Charter on Biodiversity in May 2019, “biodiversity, in addition to having intrinsic values, plays a vital role for maintaining life-sustaining systems, and therefore is of paramount importance to all life on Earth, including human beings”. They issued initiatives to fight inequality through protecting biodiversity and the climate. While these are important, more still needs to be done to accelerate and expand

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this momentum to slow down biodiversity loss and reduce greenhouse gas emissions.

The scientific case has become clearer and more convincing and connected with other significant findings. Current trends and business-as-usual scenarios show continued loss of biodiversity, with one million species threatened with extinction.

This will have major negative consequences for human well-being, including changes that may soon be irreversible.

The global comprehensive report on biodiversity and ecosystem services, launched in May 2019 by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, scientifically documented the extent of the crisis and boldly called for transformative change.

If we do not halt and reverse our current trajectory, the global economy will suffer enormous negative consequences in addition to the incalculable and intrinsic loss of nature itself.

THE CASE FOR ACTION Also in May, the Organisation for Economic Co-operation and Development issued a report making the finance, business and economic cases for biodiversity action: the most comprehensive global estimate suggests that ecosystem services provide benefits of $125–140 trillion per year. This constitutes more than one and a half times the size of global gross domestic product. Globally, the world lost $10–30 trillion per year in ecosystem services from 1997 to 2011 due to land-cover change and land degradation. Potential financial investments that could arise through nature-based solutions signal opportunities for greener sustainable development pathways. Conserving and restoring biodiversity offers unprecedented opportunities for eco-innovators and eco-entrepreneurs, and for traditional businesses, to garner the rewards of mainstreaming biodiversity into all sectors of the economy.

The connection between biodiversity and sustainable development is clear. Without effective measures to conserve and restore biodiversity and use its components sustainably, the Sustainable Development Goals will not be achievable.

At the 15th Conference of the Parties to the UN Convention on Biological Diversity in Kunming, China, in 2020, governments will have the primary task of adopting the post-2020 Global Biodiversity Framework that charts the actions to reach the vision of ‘Living in Harmony with Nature by 2050’. The transformative nature of the new framework should support national goals and policies on multiple tracks, including species and ecosystems conservation, ecosystem management and restoration, and the mainstreaming of biodiversity concepts, objectives and safeguards into economic and business models. How we address consumption and production patterns will be pivotal to ensuring the safe operating space for the planet and all life forms on it, including humankind.

The benefits of biodiversity extend far beyond the economy alone. They affect all peoples, especially G7G20SUMMITS.ORG

CRISTIANA PAŞCA PALMER Executive secretary, UN Biodiversity Cristiana Pașca Palmer was appointed executive secretary of the Secretariat of the Convention on Biological Diversity in 2017.

Previously, she served as Romania’s minister for environment, waters and forests, and headed the Romanian delegation at the 2015 Paris Climate Conference, 2016 Marrakech Climate Change Conference and 2016 UN Biodiversity Conference in Cancun.

She served as head of the Climate Change, Environment and Natural Resources Unit within the European Commission’s Directorate-General for International Cooperation and Development. She was also one of two appointed EU negotiators on behalf of the European Commission for the Rio+20 Summit in 2012.

Twitter @CristianaPascaP  www.cbd.int

1.5x

global GDP provided in benefits by ecosystem services each year

10 tr to $30tr $

lost per year in ecosystem services from 1997 to 2011

Indigenous peoples and local communities, who are directly connected to the land and whose traditional knowledge and practices can pave the way forward, as well as women and youth, who have the most at stake in the future.

The G7 leaders have a global platform to embed biodiversity indicators, incentives and investments in policymaking at all levels. Yet the scale of transformation requires action by all stakeholders. This is why, together with the governments of Egypt and China, the CBD Secretariat has launched the Sharm El-Sheikh to Kunming Action Agenda to Nature and People, which catalyses, collates and celebrates actions taken on behalf of biodiversity and its sustainable and equitable use by all sectors.

This year’s G7 summit represents a critical moment on the pathway to COP15 in 2020. I invite the leaders and all participants at Biarritz to continue to join in this growing, transparent and participatory movement to develop, adopt and swiftly implement an agreement that safeguards the future for our planet and all peoples. As France’s President Emmanuel Macron has stated, “the challenge of our generation is to act, act faster and win this battle against time and against fatalism, to put forth concrete actions which will change our countries, our societies and our economies”.

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OUTLOOK ON THE ENVIRONMENT

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ceans are vital for our planet: they produce approximately 80% of the world’s oxygen, provide the primary source of food for more than a billion people and control the climate. Yet oceans are threatened from all sides, by disappearing fish stocks and coral reefs, increasing global warming, rising sea levels, excessive human use, and the destruction of ocean life and coastal habitats. By 2050, there will be more plastic than fish in our oceans.

The threats facing oceans do not respect national state boundaries. Effective collaboration at the international level is a necessity. France’s President Emmanuel Macron has made protecting oceans a priority for the G7 Biarritz Summit, building on the momentum created by the 2018 summit where all G7 members recognised the direct impact of global temperature rise on oceans and produced the Charlevoix Blueprint and the Ocean Plastics Charter (without the United States and Japan).

France must demonstrate ambitious leadership to drive the G7 to bold and effective collaborative action. Analysing the G7’s past performance on oceans provides key lessons on how Biarritz can most effectively respond to the ocean crisis.

CONCLUSIONS The G7 first addressed oceans in 1985, recognising that the protection of freshwater must be strengthened. Its oceans agenda has risen in importance and broadened to include the environment, maritime safety, fisheries, climate change, energy and disaster risk management.

Yet the G7’s governance of oceans is inconsistent and subject to peaks and dips. In 1987, G7 members dedicated 337 words to oceans, yet the following year deliberations decreased to 61 words. In 1990, G7 attention peaked at 336 words, dropped to 243 words in 1991, 149 words in 1992, 94 words in 1993 and none in 1994. This inconsistent pattern has continued with the number of words addressing oceans rising in 2003 to 1,073, dipping to zero in 2004, and since then remaining uneven.

The 2018 summit may represent a turning point for the G7 and oceans with an overall peak of 1,916 words, the most ever dedicated to oceans. There were two documents devoted entirely to oceans, the Charlevoix Blueprint and the Ocean Plastics Charter.

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COMMITMENTS Since its creation in 1975, the G7 has made 176 collective, future-oriented, politically binding commitments related to oceans, well below the average number of commitments per issue as identified by the G7 Research Group. The first oceans commitment was made in 1986 on maritime security. The following year, the G7 recognised its responsibility to “tackle effectively environmental problems of worldwide impact” such as water pollution. The number of commitments peaked in 2003 with 81 and declined with none in 2007 or in 2010.

Prior to 2018, the G7 made 89 ocean commitments. The 2018 summit, with a

renewed focus on oceans, spiked to 84 commitments, representing an almost 100% increase.

COMPLIANCE While commitments are important, they are only effective if they are complied with. The G7 Research Group has assessed five of the 176 ocean commitments for compliance by G7 members. Overall, compliance averages 79%, higher than the 75% average across all issue areas, indicating that the G7 is an effective forum for global oceans governance. The lowest compliance was 75% for the 2003 summit. The highest compliance was 83% at the 2002 summit. Six months after the 2018 summit, compliance was also 83%.

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2050 The year in which there will be more plastic than fish in our oceans

1,916 G7 performance on

oceans With our oceans threatened from all sides, Hélène Emorine, director, Paris office of the G7 Research Group, analyses the G7’s past performance to draw key lessons on how Biarritz can most effectively respond to the ocean crisis

HÉLÈNE EMORINE Director, Paris office of the G7 Research Group Hélène Emorine is the director of the Paris office of the G7 Research Group, based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She holds an MSc in global governance and diplomacy from the University of Oxford. Her research focuses on cooperation between states, non-state actors and the private sector through international and plurilateral institutions.

Twitter @heleneemorine  www.g7.utoronto.ca

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words dedicated to oceans at the 2018 Charlevoix Summit

79%

Average compliance on assessed commitments on oceans

CORRECTIONS G7 performance on oceans is inconsistent.

The 2018 summit produced, for the first time, two stand-alone documents on oceans, and an almost 100% increase in the number of commitments. This unparalleled peak can be linked to the shock-activated vulnerability caused by the increasing number of environmental crises as well as growing global attention to marine plastics. This performance also suggests that the 2018 presidency’s decision to host, for the first time, a meeting with the environment, oceans and energy ministers provided the necessary political drive and degree of interdepartmental cooperation to foster ambitious action.

Yet peaks in the G7 ocean performance are often followed by dips in attention and performance. Biarritz must not rely too heavily on the performance of the 2018 summit, but use it as momentum to drive further ambitious, collective action in a collaborative manner, involving all departments of G7 members involved in the closely connected issues of oceans, climate change and energy.

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OUTLOOK ON THE ENVIRONMENT

Action on oceans Initiatives to clean up the world’s oceans and transition to a fully regenerative, sustainable ocean economy demand collaborative, concentrated work, led by the G7, to accelerate processes and transform vision into action, writes Atsushi Sunami, president, Ocean Policy Research Institute, the Sasakawa Peace Foundation

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n 29 June, G20 leaders concluded their two-day summit at Osaka with a declaration that included two important initiatives relating to oceans: the G20’s Osaka Blue Ocean Vision to tackle marine plastic waste and to end illegal, unreported and unregulated fishing for the sustainable use of marine resources. The world’s oceans are important in absorbing and stabilising greenhouse gases emitted as a result of human activities, but they face large-scale impacts from climate change, including ocean warming, acidification and deoxygenation.

The oceans are also threatened by floating plastic debris as well as IUU fishing, which costs governments billions of dollars annually.

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In preparation for the first G20 summit hosted by Japan, Prime Minister Shinzo Abe had made clear his intention to feature marine plastic waste on the agenda. He declared that Japan would announce an initiative for effective measures to drive global efforts to tackle this problem. After extensive discussions among G20 ministers at their meeting on energy transitions and the global environment for sustainable growth on 15–16 June, the G20 leaders adopted the Osaka Blue Ocean Vision, which commits to reducing additional marine plastic waste to zero by 2050. This vision focuses more on recycling and reuse than on a complete ban on usage as a realistic step towards solving this urgent issue. However, countries are encouraged to promote the acceleration

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of research on developing alternatives to plastics and developing biodegradable materials that are environmentally friendly.

Abe also announced Japan’s MARINE Initiative, which includes four points. The Japanese government aims to combat marine plastic litter through better waste management, recovery of oceanic wastes, innovation for management strategies, and support for developing countries to build infrastructure that improves their waste management capacity. Abe also promised at the Osaka Summit to provide training for 10,000 officials engaged in effective global waste management by 2025.

Sustainable Development Goal 14 includes a target to eliminate IUU fishing by 2020. One way is to expand the number of countries that ratify the Port State Measures Agreement, developed by the Food and Agriculture Organization to eliminate IUU fishing.

The next opportunity for world leaders to meet and discuss these issues will be in France at the G7 summit in Biarritz.

CONTINUED MOMENTUM Although there are global frameworks including the United Nations Convention on the Law of the Sea and the UN Framework Convention on Climate Change, there is no such ‘ocean agency’ under the auspices of the UN that can comprehensively address all the ocean issues. With this backdrop, the UN High Level Panel for a Sustainable Ocean Economy has emerged to try to address the urgent needs of our oceans.

Co-chaired by Prime Minister Erna Solberg of Norway and President Tommy Remengesau of Palau, the panel consists of 14 heads of government, including Japan, with support from Peter Johnson, the UN secretarygeneral’s special envoy for the ocean. The panel will work with its advisory network and expert group to produce recommendations for transitioning to a fully regenerative, sustainable ocean economy, with the aim of issuing a final report in 2020.

A mounting sense of urgency has finally pushed world leaders to pay more attention to protecting healthy oceans. From the G20 in Osaka to the G7 in Biarritz, followed by the Asia-Pacific Economic Co-operation Forum summit in Chile in November 2019 – all lead up to the UN Ocean Conference in June 2020, co-hosted by Portugal and Kenya. There, the world will review the progress of SDG 14. It is important for the world community to continue its

The G20 Osaka Blue Ocean Vision commits to

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0

ATSUSHI SUNAMI

President, Ocean Policy Research Institute of the Sasakawa Peace Foundation Atsushi Sunami is the president of the Ocean Policy Research Institute of the Sasakawa Peace Foundation, as well as an executive advisor to the president and adjunct professor of science and technology policy at the National Graduate Institute for Policy Studies (GRIPS) in Tokyo. He is a member of the advisory board for the Promotion of Science and Technology Diplomacy in Japan’s Ministry of Foreign Affairs and the Council for Science and Technology in the Ministry of Education, Culture, Sports, Science and Technology. He was also a special advisor to the Cabinet office responsible for science and technology and innovation.

marine plastic waste by 2050

dialogue on the oceans, ultimately to establish a formal global mechanism to govern their sustainable use. Although the G20 started as an economic summit primarily dealing with the global economy, it has now evolved into a platform for discussions on all important global issues, including the SDGs. However, there are no clear mechanisms to discuss ocean issues, such as IUU fishing, in the G20 process.

This is due to the lack of relevant negotiating tracks or the platforms for policy discourse that comprehensively covers the agenda for sustainable management of oceans.

It is therefore important for the G7 to accelerate that process and transform the vision into action.

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3

EQUITABLE TRADE, TAX AND DEVELOPMENT

G7 performance on

trade

Maria Marchyshyn, lead researcher on trade, G7 Research Group, shares the data on trade commitments and compliance and asserts that Biarritz is an opportunity to underscore trade as a tool to combat inequality and promote inclusive growth

A

s the G7 leaders arrive in Biarritz for their summit, US-China trade tensions, new tariffs, Brexit, an expected global economic slowdown, and increased unilateralism and nationalism raise questions about trade as a pillar of prosperity. However, as the United States and some others turn inwards, countries are signing new trade agreements and diversifying their partners. Trade continues to grow, even as it ebbs and flows in this new turbulent global environment. Summits often provide an impetus for concluding new free trade

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The ambitious Paseo Del Bajo project is set to transform Buenos Aires with a new highway to facilitate trade

Compliance (%)

70

Conclusions (% words)

Commitments (%)

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agreements and a platform for addressing disputes. This year’s G7 summit in France is an opportunity to show that trade can help combat inequality and be a pillar of inclusive economic growth.

CONCLUSIONS Trade has been one of the three top issues at every G7 summit since 1975.

The G7 has been a strong proponent of the multilateral trading system with the World Trade Organization at the centre.

G7 communiqués contained an average 1,057 words (15%) on this topic per summit. The four summits with the most words on trade were in 2005, 2006, 2007 and 2009. The summits from 2003 to 2007 each issued a stand-alone document on trade. The 2017 and 2018 summits dedicated among the least words to trade: 106 words and 139 words respectively.

Since the peak of 45% in 1979 and 39% in 1975 the percentage declined to 2% in 2017 and 1% in 2018. The main topics have been rejecting protectionism, urging members to conclude WTO rounds and encouraging trade liberalisation, with some references to protecting the environment, securing energy supplies, regional relations, assisting developing countries through aid for trade and protecting labour rights.

COMMITMENTS Since 1975, G7 leaders have made 338 public, collective, precise, future-oriented and politically binding commitments on trade. They account for 6% of all commitments identified by the G7 Research Group.

The highest number of trade commitments was 24 in 2013, with the second highest of 21 in 1977. No commitments on trade came in 1985 and 1992. The period between 2013 and 2017 produced commitments in double digits, spurring great strides in trade liberalisation. The number fell to five in 2018 as the United States began opposing any mention of anti-protectionism.

COMPLIANCE The G7 Research Group has assessed 41 commitments on trade and found compliance averaged only 64%. This is below the 75% average across all subjects. Two commitments made in 2000 achieved perfect compliance – on launching a new round of WTO negotiations. The next highest score was in 2004 with 94%, on showing strong commitment to multilateral G7G20SUMMITS.ORG

Trade ministers’ meetings, although useful, are unnecessary or even unhelpful for improving compliance”

MARIA MARCHYSHYN Lead researcher on trade, G7 Research Group Maria Marchyshyn is the lead researcher on trade with the G7 and G20 Research Groups and the BRICS Research Group at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto.

Her work focuses on macroeconomic issues, including international trade and finance and topics regarding the European Union.

Maria served as vice president of finance on the board of directors of the Organization of Women in International Trade for five years until 2018. She has worked in the financial industry and as a researcher at the European Parliament in Brussels.

Twitter @MariaMarch31  www.g7.utoronto.ca

negotiations. Six months after the 2018 summit, compliance on the one assessed commitment on trade was 56%.

The lowest scores revolved around protectionism, with 0% compliance from 1983 on resolving current trade issues, 11% from 2009 on refraining from new barriers to trade and 15% from 1982 on further opening markets.

By member, the European Union at 84% complies the most with its trade commitments, followed by Canada at 76% and the United Kingdom at 73%.

CORRECTIONS There are several low-cost measures for G7 leaders to improve compliance with their trade commitments.

Historically, the more commitments on trade produced at a summit, the higher the rate of compliance. The 20 commitments with the highest compliance were issued at summits with on average 25% (or two) more commitments than the summits with the lowest compliance.

Holding a trade ministerial meeting does not lead to higher compliance with trade commitments. Between 1982 and 1999, when the trade ministers of the United States, European Union, Canada and Japan met annually, average compliance was 38%, or lower than the 68% average for years with no such meetings. Trade ministers’ meetings, although useful, are thus unnecessary or even unhelpful for improving compliance.

At this time, the G7 should reinforce its commitment to the multilateral trading system. Bilateral and regional negotiations are creating a complicated, disconnected web of trade agreements that are difficult to navigate both for businesses and for investors. A reference to the WTO increases compliance by 73%. Commitments that refer to the WTO average 79% compliance, while those that do not average only 57%.

Addressing WTO reform and encouraging WTO-consistent trade agreements are two important topics that need to be discussed at Biarritz.

Including a one-year timeline into the commitment also increases compliance, while having a multi-year timetable decreases it.

To achieve higher compliance, the G7 leaders should thus produce more commitments on trade, refer to the WTO, and include a one-year timetable but avoid multi-year timelines and trade ministerial meetings.

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G7 trade policy imperils the best jobs Honest appraisal of and action on global trade-distorting subsidies is required to foster competition built on merit, alleviate trade tensions and promote next-generation technologies, innovation and investment, writes Simon J. Evenett, professor of international trade and economic development, University of St Gallen, Switzerland, and coordinator, Global Trade Alert

E

xporting firms pay better because they reach higher levels of productivity. The pay premium is even larger for firms with operations in many countries. But selling abroad is riskier than selling at home, and rewards compensate those companies and their staff that successfully navigate differences across the world economy. These great jobs are threatened when G7 governments try to steal market share by propping up uncompetitive firms.

Since 2016, G7 members have been piling agony onto exporting firms by implementing many more trade distortions than in earlier years (see Figure 1). By June 2019, steps taken by G7 governments to favour local companies resulted in 31.7% of world trade being skewed,

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EQUITABLE TRADE, TAX AND DEVELOPMENT putting at risk many of the best-paid jobs around the world.

Tariff hikes in recent years grab headlines, but in fact it is the build-up of trade-distorting subsidies that significantly distorts global trade. That so much state largesse is handed over so quietly also creates uncertainty for competitors, which react by postponing upgrades, investments and staff training.

The damage is compounded when governments with deep pockets take bets on firms that make promises to ‘disrupt’ their sectors. History shows that pampered corporate couch potatoes rarely become gold medal winners in world markets.

Worse, as the decades-long dispute concerning Airbus and Boeing makes plain, subsidy races are a recipe for recurring trade tensions. There has to be a more rational way to promote next-generation technologies, innovation and investment.

Kicking the G7’s subsidy habit differs from tariff brinkmanship. Subsidies cost taxpayers money and ultimately must be financed with higher taxes.

‘Corporate welfare’ is not popular with voters in an era of populism. Finance ministries can normally be counted upon to support subsidy cuts.

When poorly chosen state loans go sour, they threaten the viability of state banks and the inevitable bailouts of those financial institutions add to government fiscal woes. The International Monetary Fund worries about the impact of growing subsidies on government financial health, limiting the space that governments have to expand spending and boost national economies during the next crisis. So subsidy reform yields short- and longer-term benefits.

Subsidies thrive where transparency is weak.

Corporate recipients of state largesse often wilt under the spotlight. Rivals highlight how they survive without financial support. Tough questions are asked about why promised restructuring of uncompetitive

SIMON J. EVENETT Professor of international trade and economic development, University of St Gallen Simon J. Evenett is a professor of international trade and economic development at the University of St. Gallen in Switzerland. He also coordinates the Global Trade Alert, the independent initiative promoting transparency in the world trading system. Educated at Cambridge and Yale universities, he has taught at Oxford and has been a visiting professor at Johns Hopkins University and at the University of Michigan. Evenett has more than 200 publications and has held several fellowships at the Brookings Institution. He has also twice served as a World Bank official.

Twitter @SimonEvenett  www.globaltradealert.org

Figure 1: Share of world trade confronted by listed trade distortion implemented by the G7

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firms is not followed through. Shedding light on the plethora of subsidies available to firms is where the G7 should start.

LAYING THE GROUNDWORK FOR GLOBAL SUBSIDY REFORM The first step for G7 governments is to put together an inventory of their trade-distorting subsidies, starting with help to manufacturing and service-sector firms (the more sensitive agricultural sector can come later).

If governments reckon a subsidy has some merit, they can say so – but that must not be used as an excuse to keep information back. G7 governments should be allowed to supply information on one another’s subsidies, too.

Committing to submit subsidy notifications to the World Trade Organization on time would be a useful second step. None of this information should be kept secret. Sunlight is the best disinfectant, as US Supreme Court Justice Louis Brandeis once put it.

Over the next year, working groups of each major type of trade-distorting subsidies should be formed.

Each group should be charged with identifying the good, the bad and the ugly subsidies, ranking state largesse by their efficiency and harm to trading partners. The goal is not to rid the G7 of all subsidies, but rather to target the least effective and those doing the greater harm to global commerce. Identifying better practices would be the third step, with a report made to next year’s G7 summit.

Having done their homework, G7 officials should then widen the discussion to include other governments.

Eschewing one-sided assessments of global subsidy problems builds credibility with the G7’s trading partners. Rationalising subsidy regimes would result in more competition being on merit, strengthening firms’ incentives to invest in their staff and the technologies of tomorrow.

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EQUITABLE TRADE, TAX AND DEVELOPMENT

A pattern of weakening is emerging for international investment flows, writes Mukhisa Kituyi, secretary-general, UNCTAD, as he calls on G7 leaders to rekindle global investment in support of the Sustainable Development Goals

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R in e ve ig n st it m i flo e ng n w t s

nternational investment flows have been weak for a decade. Last year, global foreign direct investment fell again, by 13%, the third consecutive decline. While developed countries have seen the largest drops in FDI, flows to developing countries have also stagnated. Only developing Asia is still showing moderate growth.

The stagnating FDI trend of the past decade can be ascribed to a range of factors. First, the nature of FDI flows is changing. The adoption of digital technologies in global supply chains is causing a shift towards intangibles and increasingly asset-light forms of international production, which is also visible in a slowdown in global value chains. This has important implications for developing countries, which rely on investment in physical productive assets and on participation in global value chains for their development.

Second, there has been a significant decline in rates of return on FDI. The global rate of return on inward FDI dropped below 7% in 2017, a decrease of almost two points compared to a decade ago. Although rates of return remain higher on average in developing and transition economies, most regions have not escaped this erosion.

Third, the international trade and investment policy climate has become generally less favourable.

At the international level, the investment policy regime is in flux. It is made up of more than 3,000 investment agreements, with many gaps, overlaps and inconsistencies. At the national level, investment

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policies are no longer universally moving in the direction of greater openness. Restrictions and regulation of investment are on the rise.

LONG-TERM CONCERNS This troubling global investment picture is a long-term concern for policymakers worldwide.

At the United Nations, we recognise the gravity of this issue as investment is central for sustainable development and inclusive growth. The UN Conference on Trade and Development estimates the investment gap to achieve the Sustainable Development Goals at $2.5 trillion per year in developing countries alone.

We need to mobilise more investment and channel it to where it can contribute most to sustainable development. UNCTAD plays a central role, through its policy frameworks, intergovernmental consensus building and technical assistance, which work as a point of reference and a common structure for debate and cooperation on national and international policies to channel investment to the SDGs. UNCTAD is also the key venue for discussions on reforming the International Investment Agreement regime to make it more friendly to sustainable development. International cooperation and debate on investment issues is further bolstered by capacity building and technical assistance on investment issues through investment policy reviews, support to investment promotion agencies, and through the implementation of investment facilitation tools such as iGuides, investor information portals and electronic single windows.

Tangible results in making investment work for sustainable development show promise. More than 150 countries have used UNCTAD policy frameworks in their national and international investment policymaking. New IIAs concluded in the past few years almost all contain the key elements of UNCTAD’s Reform Package for the International Investment Regime.

UNCTAD’s investor portals are now present in 35 developing countries and its inventory of investment facilitation tools on the global enterprise registration portal (GER.co) has provided a baseline for ongoing international debate on the topic.

UNLOCKING INVESTMENT FLOWS Major challenges remain, however, both at the international and national levels. In the international policy environment, IIA reform now needs to tackle the vast numbers of older treaties dating from before the reform process took hold. The stock of old-generation treaties is 10 times larger than the number of modern, reform-oriented treaties. In national policy environments, greater efforts need to be made to channel G7G20SUMMITS.ORG

MUKHISA KITUYI Secretary-general, UNCTAD Mukhisa Kituyi is in his second term as secretary-general of UNCTAD, having been appointed in 2013. He has served as Kenya’s minister of trade and industry, chair of the Council of Ministers of the Common Market for Eastern and Southern Africa, the African Trade Ministers’ Council and the Council of Ministers of the African, Caribbean and Pacific Group of States. As a consultant for the African Union Commission, he helped to develop the structure for a pan-African free trade area.

Twitter @UNCTADKituyi ‫ ‏‬ www.unctad.org

13%

decline in global FDI in 2018

<7%

Global rate of return on inward FDI in 2017

investment into SDG sectors and contribute more to sustainable development.

The G7 summit provides an opportunity for global leaders to renew their commitment to a conducive global policy environment for investment in sustainable development. To achieve prosperity goals, continued access to investment in productive capacity is needed to help developing countries, especially the least-developed countries, climb the development ladder. In addition, a conducive climate for investment is a precondition to boost financing flows to key SDG sectors including infrastructure, renewable energy, food security, water and sanitation, and others. Our latest research reveals that international investment flows in these sectors have not shown a significant upward trend since 2015, when the SDGs were launched. That worrying fact merits the attention of G7 leaders.

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EQUITABLE TRADE, TAX AND DEVELOPMENT

Andrew Baker, professor of political economy, University of Sheffield, and Richard Murphy, professor of practice in international political economy, City University, London, call on the G7 to task agencies with carrying out fairer assessments of global tax systems using a new framework

Tax spillover assessments: an idea whose time has come F airer tax systems are a prerequisite for the fairer capitalism that the French presidency has made its overarching priority for the 2019 Biarritz Summit. Effective taxation of digital companies and minimum rates of corporation tax have been the focus of G7 discussions this year.

However, baseline political agreement will likely prove elusive, while both will be difficult to enforce and implement.

A more fruitful tangible step towards creating a fairer international tax system would involve establishing regular tax spillover assessments for all countries, conducted by a multilateral agency.

We call on G7 leaders to task multilateral agencies,

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such as the International Monetary Fund, World Bank, Organisation for Economic Co-operation and Development, and United Nations, with producing such a process of assessment as a priority.

Tax spillovers were first identified as a significant problem in an IMF paper in 2014. They were defined as the impact of one country’s tax rules and practices on others. Tax spillovers were found to have a “significant and sizable” impact in reducing corporate tax bases and rates, especially in developing countries. The IMF focused on cuts in headline rates of corporation tax, finding that a 1% reduction in all countries would reduce a typical country’s corporate tax base by 3.7%, with the effects two to three times higher for developing countries. This research established that race-to-the-bottom effects induced by tax competition were real and significant and that developing countries were disproportionately harmed.

HARMFUL EFFECTS In our recent research, we found that spillover effects go beyond corporation tax to cover a wider range of tax policies and practices: income tax, capital gains, tax administration, company and trust administration, and even social security taxes. All can be subject to, or the

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

ANDREW BAKER

Professor of political economy, University of Sheffield Andrew Baker is a professor of political economy at the University of Sheffield. He is widely published on financial and economic governance, including The Group of Seven published in 2006. He is a current editor of New Political Economy.

RICHARD MURPHY Professor of practice in international political economy, City University, London

Richard Murphy is a professor of practice in international political economy at City University, London. He is also a UK chartered accountant, a co-founder of the Tax Justice Network and director of Tax Research UK. He created the concept of country-by-country reporting, which has been adopted by the Organisation for Economic Co-operation and Development.

Twitter @RichardJMurphy  www.taxresearch.org.uk

source of, harmful spillover effects. Some tax policies, for example, produce domestic spillovers that undermine other parts of the tax base in the same country.

We used these observations to create a new spillover assessment toolkit that evaluates the vulnerability of states to spillover effects, and the extent to which a state’s own policies generate both domestic and international spillover risks through a qualitative assessment methodology. The IMF’s earlier econometric research focused on aggregate effects but struggled to capture what was taking place within individual states.

Now, a toolkit for conducting national level spillover assessments has been created through our work.

We need spillover assessments to enable us to identify which tax policies cause what harms to which tax bases and which areas of tax policy, both within the same state and in other states. This knowledge would enable the development of programmes for targeted national tax reform aimed at reducing the harmful spillover effects each national tax system generates.

Most importantly, spillover assessments would redefine notions of appropriate and legitimate government behaviour. A new baseline norm of avoiding and minimising harms to others would become the centrepiece of this new international tax G7G20SUMMITS.ORG

For more, please see ‘The Political Economy of “Tax Spillover”: A New Multilateral Framework’ in Global Policy available at bit.ly/GlobalPolicy

governance. The race to the bottom in taxation, which developing countries are most ensnared in and from which they experience the most harmful effects, could then be partially abated. This would constitute a significant step towards greater international tax justice.

Crucially, this is something the G7 and G20 leaders could commit to at low cost. A framework for conducting spillover assessments now exists. There is consensus on the need for spillover assessments and the purpose they could serve in alleviating race-to-the-bottom dynamics and reducing tax policy harms among leading development non-governmental organisations and campaign groups.

Oxfam, Action Aid, the Tax Justice Network and Eurodad all support implementation of a version of our framework by the international community. Staff at the World Bank and the OECD and the Global Initiative for Fiscal Transparency that they lead, as well as the IMF and the European Commission, have also shown interest in country-level spillover assessments and what they could achieve.

What is currently missing to make spillover assessments a reality is the political support that would allocate mandates to teams of trained assessors and give momentum to this process. The G7 can provide this. Now is the time for the leaders to recognise the benefits of spillover assessment and commit to developing a multilateral process.

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EY

Consensus and commitment for global tax that works for all

Making the international tax system fairer is an ambitious undertaking that requires navigating complex political dynamics and difficult technical issues. Barbara Angus, global tax policy leader, EY, calls for the devotion of time and resources to reach a lasting global solution

U

nder the French presidency of the G7, the theme for the Biarritz Summit in 2019 is combating inequality. In the area of economic policy, which has long been a major focus for the G7, the French presidency has identified as its priority the

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promotion of more fair and equitable trade, tax and development policies. Consistent with this prioritisation, an important part of the discussion at the meeting of the G7 finance ministers and central bank governors in June was centered on making the international tax system fairer.

The focus of the finance ministers was the OECD-led initiative launched in 2019 with the aim of achieving consensus on significant alterations to the global framework for taxing international business income. The impetus for the project is the tax challenges created by the growing digitalisation of the global economy.

However, the changes contemplated will have implications well beyond technology companies and digital business models, and will affect the broad spectrum of businesses, both large and small, whose economic reach extends across national borders.

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ADVOCACY

EY At its core, this project is about changing which country taxes what income. The first element involves revisions to the historical approaches for determining nexus and allocating business income among countries, with a particular focus on enhancing the share of income and corresponding taxing rights assigned to countries where customers or users are located. The second element involves the establishment of a new system of global minimum tax rules for business income. To avoid creating barriers to the cross-border trade and investment that fuels the global economy, these changes must be made without giving rise to double taxation or increased uncertainty.

Three key factors are essential to the success of this initiative.

Coordination on the taxation of international business income is central to a global environment that is hospitable to cross-border trade and investment”

① BROAD GLOBAL CONSENSUS.

Both the G7 and the G20 have endorsed the OECD project. Currently, 132 jurisdictions are engaged in the work through the OECD’s Inclusive Framework. It is important that all parties are at the table and all perspectives are considered. Active participation in the dialogue is vital. Not only must there be full consensus around the globe, but that consensus also must be fully informed.

② HIGH-LEVEL POLITICAL

COMMITMENT. The stakes are high. Countries must accept changes in their rights to tax business income and in their ability to control the taxation of income earned within their borders. For every country that will gain additional tax base in the application of the new rules to any given business, there will be at least one country that sees a corresponding reduction in its tax base from that business. Equal commitment is required from both categories of countries.

Commitment will require that countries make changes to their domestic tax laws and amend their bilateral tax treaties to incorporate the new rules. For some countries, this will require modifying or eliminating existing measures that are inconsistent with the new rules.

And commitment also will require good faith participation in robust new dispute resolution mechanisms.

③ SOUND TECHNICAL FOUNDATION. Consensus and commitment must be built on a strong foundation. The new

G7G20SUMMITS.ORG

BARBARA M. ANGUS Global tax policy leader, EY Barbara M. Angus is a principal with Ernst & Young LLP and is EY’s global tax policy leader. In this role, her focus is engaging with clients and governments on tax policy development and implementation across the globe. Barbara was previously chief tax counsel for the Committee on Ways and Means of the United States House of Representatives and earlier international tax counsel for the Office of Tax Policy, United States Department of the Treasury. Barbara has extensive private-sector experience. In 2018, she received a Distinguished Service Award from the Tax Foundation and in 2016 was included in the list of 10 Outstanding Women in Tax, published by Tax Analysts.

rules should be principled. They should be even-handed in their impact across industries and business models. The new rules need to be smoothly integrated into the overall global tax framework.

Companies need to be able to apply the new rules with confidence and tax authorities need to be able to administer them effectively. Given the diversity of businesses that operate globally today, it is unlikely that one single formula could deliver appropriate results in all cases. Agreement on the new rules must be grounded in the technical detail developed by the tax policy experts working together through the OECD’s Inclusive Framework process.

This initiative to change the global tax framework is an ambitious undertaking.

Tax policy is a fundamental matter of national sovereignty. At the same time, coordination on the taxation of international business income is central to a global environment that is hospitable to cross-border trade and investment.

Collective action is difficult under any circumstance, and it is especially difficult when it involves fiscal matters. Seeking consensus, fostering high-level political commitment and ensuring a sound technical foundation will require the devotion of time and resources, and all are essential to achieving a lasting global solution.

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organisation or its member firms.

Twitter @EY_Tax  www.ey.com Bharat Masrani

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G7 performance on development

DELIBERATIONS The issue of development has been on the G7’s agenda since the start, but the amount of attention it has received has varied. At the first summit in 1975, the number of words devoted to development was 164 (15% of the total). This rose from 270 words (17%) in 1976 to 490 words (18%) in 1977, and then again to 585 words (20%) in 1978. From then until the 2001 summit, it fluctuated between 3% in 1984 80

JULIA TOPS Co-chair, summit studies, G7 Research Group Julia Tops is the co-chair of summit studies with the G7 Research Group and a researcher with the G20 Research Group at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She joined the G7 and G20 Research Groups in her first year of studies at the University of Toronto.

Her research interests focus on gender and employment issues, in addition to her other interests in development and international law. Julia is working on a master’s in development studies at the London School of Economics and Politics.

Twitter @g7_rg  www.g7.utoronto.ca

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

photo: shutterstock.com

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he issue of development is included in the 2019 G7 Biarritz Summit as one of five goals for fighting inequalities. France’s presidency is focusing on methods to reduce inequality of opportunity, so everyone has the same chance in life regardless of location or gender, in order to ensure global stability and peace. Under this theme, France has promised to promote more fair and equitable development policies.

For Biarritz, the issue of development includes inclusive growth, which has been carried over from Canada’s presidency in 2018. Development plays a part in creating equal opportunities and equitable investments to improve prospects for all.

Development is central to fighting inequality – one of the main priorities of the Biarritz Summit. Julia Tops, co-chair, summit studies, G7 Research Group, looks at G7 action on development since the group’s inception

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and 20% in 1996. In 2002, it spiked to a record high of 56%, with 6,693 words on development as the summit supported the New Partnership for Africa’s Development and produced the African Action Plan.

However, attention to development plunged to 695 words (4%) in 2003 and continued to decline to an all-time low of 461 words (1%) at the 2004 summit.

In recent years, there has been an upward trend with 1,176 words (14%) at the 2017 summit and 2,032 words (18%) at the 2018 summit.

COMMITMENTS Despite the low number of words devoted to development in the summit communiqués, the G7 has made 701 collective, future-oriented, politically binding commitments as identified by the G7 Research Group – more commitments than on any other issue.

The 1975 summit made four commitments. The highest number was 53 commitments made at the 2002 summit. The number has fluctuated and declined overall until a resurgence of 32 commitments at the 2018 summit.

COMPLIANCE The G7 Research Group has assessed 48 of the 701 development-related commitments for compliance

by G7 members. With a 73% average – slightly below the overall average of 75% – development has evidently remained an underlying priority G7G20SUMMITS.ORG

Conclusions (% words)

6,693 The highest number of words dedicated to development, from the 2002 summit

701 commitments made on development in total

73%

Average compliance on assessed development commitments

Commitments (%)

throughout the G7’s decision-making process.

Compliance was at an all-time high at 100% with the commitments made in 2015, where leaders focused on the post-2015 development agenda. The three summits from 1996 to 1998 each produced the lowest score of 50%; only one commitment was made and monitored at each of these summits.

CORRECTIONS G7 Research Group findings suggest that G7 performance on development is improved by having a summit produce multiple documents, such as the Africa Action Plan in 2000. When there are several documents to support the development commitments, compliance tends to be higher.

Compliance is also higher for commitments that refer to a multi-year timetable. References to key international organisations responsible for development also improve compliance.

Therefore, at Biarritz G7 leaders should reiterate and indeed reignite their commitment to creating long-term development opportunities, manifested in multiple and specific summit documents with references to key international organisations and a multi-year timetable, in order to promote equal opportunities for all. France has consistently complied with its commitments on development and this can be an opportunity to use its presidency to improve the G7’s performance on development.

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Interview with Achim Steiner

The power of togetherness How could the G7 leaders at their Biarritz Summit best follow up the work done by the G20 leaders at Osaka?

As host of the Biarritz Summit, French president Emmanuel Macron has sent some ambitious signals. The G7 remains a small group of members with a disproportionate influence, role and responsibility in terms of political and economic stability in the world. I hope we will see in Biarritz a reduction in the dissonance among the G7 members in addressing climate change. We may not have complete unity, but a strong signal on progress will be critical. Inequality and economic disparities are also issues challenging G7 members in their own domestic political arenas and also in terms of the critical global role they play. And global security takes on a particularly important role when the G7 is in Europe, given the insecurity in key parts of world where Europe has been linked, whether through migration and displacement, or whether through the rise of violent extremism. Just in the Sahel region alone, can the G7 advance the capacity to engage effectively in the long term and invest in the more structural transformation that those countries are looking for? That’s why Africa is very much on the agenda of the G7 summit.

ACHIM STEINER Administrator, United Nations Development Programme Achim Steiner became UNDP administrator in 2017. He is also the vice chair of the United Nations Sustainable Development Group, which unites 40 entities of the UN system that work to support sustainable development. Prior to joining UNDP, he was director of the Oxford Martin School and professorial fellow of Balliol College, University of Oxford. Steiner led the United Nations Environment Programme (2006–16) and was also director-general of the United Nations Office at Nairobi. He previously held other notable positions including director-general of the International Union for the Conservation of Nature and secretary-general of the World Commission on Dams.

Twitter@ASteiner  www.undp.org

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Achim Steiner, administrator, United Nations Development Programme, shares with John Kirton what can be achieved when the world comes together to overcome individual issues as part of the wider global development landscape How do the Sustainable Development Goals help advance the Biarritz Summit’s central goal of strengthening equality for all?

You can always turn the SDGs on their head, so to speak, and view them as a risk map. The world concluded in 2015 that if we do not act more intelligently, more collectively and in a more transformative way, we risk facing even greater problems or crises. For the G7, the SDGs also map the major risk areas that, left unaddressed, will exacerbate inequality and domestic political tensions. They also pinpoint a growing number of territories that could become unstable.

Just look at Afghanistan, Somalia, the Sahel – and in Mali, even with a significant international peacekeeping mission, it is a struggle to help the country stabilise again. This is where the G7’s collective capacity to act is fundamental. No individual country can bring either the resources or the political leverage that is needed.

Iraq has taught us much.

As the coalition forces and the Iraqi army took over the cities, the ability to implement rapid stabilisation programmes – in which the UNDP was such a central player with the Iraqi government – was only possible because the international community

Leaders from countries that have not yet come very far can look over the fence at their neighbours and see what is working and why it makes sense” came together. It made $1 billion available to allow us to bring four and a half million out of six million displaced people back to their homes and begin reconstruction and rebuilding. These success stories recognise that if you cannot answer the development perspective of people in a crisis or a conflict, you are unlikely to be able to stop the recruitment and financing of violent extremism and radicalisation.

Can we expect the United Nations to review the progress of the SDGs to shape the path to 2030?

Yes – the heads of state and government come together every four years to take stock of SDG progress, and that’s happening at the United Nations in New York this September with the SDG Summit. This will occur alongside the Climate Action Summit convened by the UN secretary-general as well as summits on financing for development, universal health coverage and small island developing states. This September is an alignment of major meetings happening around the high-level segment of the UN General Assembly that is likely to attract a record number of world leaders.

The leaders will look at how their countries and the world are doing as a whole. This is an opportunity for us to review progress and success stories and learn from them. It also allows leaders to speak about how they have taken up the SDGs. Indeed, leaders from countries that have not yet come very far can look over the fence at their neighbours and see what is working and why it makes sense. Moreover, the G7G20SUMMITS.ORG

community of nations can assess whether we are likely to achieve the SDGs by 2030 and what we need to do differently or more deliberately in order to maintain the growing momentum towards implementation.

These summits can take the form of a political declaration, voluntary commitments and a reaffirmation of the 2030 Agenda for Sustainable Development. Above all, we would like to ensure that the world understands how unique, singular and powerful the 2030 Agenda is at unifying essentially every country. Its universality and integrated approach have proved to be very resilient. We want to encourage actors outside of government to believe in how relevant and useful this agenda is for them to engage with a wide range of actors including the private sector, the financial sector and civil society. It is very clear that we cannot meet the challenges of the 21st century by simply picking out individual issues. We can own them, we can feel passionate about them, we can become activists for them. However, our likelihood of success is in part premised by not isolating individual issues from either their national development landscape or the global development reality.

When people talk with each other, they are less likely to be in conflict or end up in conflict with each other. The UN is about getting the world to talk, and the events taking place this September are an amazing illustration of the power of this idea.

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he World Bank Group seeks to help countries achieve improvements in growth, job creation, poverty reduction, governance, the environment, climate adaptation and resilience, human capital, infrastructure and debt transparency.

To meet the worldâ&#x20AC;&#x2122;s development goals, the WBG is increasing its focus on country programmes to improve growth and development outcomes. The best starting point is for strong leaders to guide programmes that make sense in the economic and political environment, and we are expanding support for countries at lower levels of income and states affected by fragility and conflict. The aim is to effectively address issues central to the WBG mission, while considering challenges such as the global slowdown in growth and the surge in debt that does not deliver real benefits.

Global growth has continued to weaken, and momentum remains fragile. For emerging-market and developing economies, lacklustre investment is particularly concerning.

Investment growth in these economies, which is expected to remain weak and below historical averages, is being held back by sluggish global growth, limited fiscal space and structural constraints that misallocate or discourage investment, such as poor business environments, labour and product market controls, and weak governance. Subdued investment weakens foundations for the sustained growth that is needed to alleviate extreme poverty and advance shared prosperity.

As it aims at comprehensive economic and social improvements, the World Bank is sharpening its focus in relevant areas. David Malpass, president, World Bank Group, details the programmes under way that target shared prosperity and seek to overcome challenges that continue to stunt opportunity

Financing development In an era of low interest rates, government borrowing might appear to be an attractive option to finance growth-enhancing investment projects. Debt is often an important tool for development and poverty reduction, and sustainable borrowing can help countries finance investments in essential areas such as infrastructure, health and education. However, to add to growth, debt must be transparent and well managed. Otherwise, it becomes more of a burden than a benefit by increasing vulnerability to crises, eroding the effectiveness of macroeconomic policy and weighing on investment and growth.

Unsustainable debt levels have become increasingly troublesome in the past few years, with incentives often working against transparency. Government debt in emerging market and developing economies is higher than before the global financial crisis by an average of 15 percentage points of gross domestic product. These countries need to strike a careful balance between acquiring debt to promote investment growth and avoiding risks associated with excessive levels and hidden forms of debt.

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THE INSECURITY EFFECT One of the WBG’s biggest challenges is supporting countries affected by fragility, conflict and violence, such as those in the Sahel and the Horn of Africa. We are also carefully monitoring the situation in Venezuela and stand ready to provide support.

In these countries, insecurity has already set back development gains, and it is increasing macro-fiscal pressures and contributing to rising levels of extreme poverty.

We need to help countries establish stronger foundations that enable young people to build futures at home and address the root causes of conflict and instability that contribute to forced

displacement and migration. Ultimately, any hope of poverty reduction, structural reforms and economic growth in fragile settings is impossible without stability and security.

In the Sahel, a decisive effort is needed by the international community – including G7 leaders and the Sahel countries – to reverse the deterioration of security, enhance state presence and strengthen the social contract. Together with partners in the Sahel Alliance, the WBG is changing the way we do business in the Sahel in several ways: first, by focusing more intently on prevention and on addressing the causes of fragility; second, by remaining engaged during situations of active conflict to re-establish the presence of the state and build resilience; third, by creating the basis for countries to escape fragility – for example, by supporting digital transformation to enhance broadband penetration and lessen the cost of internet access; and finally, by supporting refugees and host communities across the region.

Instability and fragility in the Sahel are driven by land pressures from rapid population growth and climate change.

Almost half of the population of 80 million is under 15 years old, fertility rates are among the highest in the world, and there is a lack of economic opportunity, which combine to create a regional ‘fragility trap’. One fundamental driver of change is women’s empowerment. The Sahel Women’s Empowerment and Demographic Dividend Project is increasing women’s and adolescent girls’ access to quality reproductive, child and maternal health services. This helps girls delay marriage and childbirth, stay in school longer and eventually participate in the labour force.

In the 18th replenishment of the International Development Association, WBG resources to the Sahel are expected to be $4.9 billion. But with a strong replenishment, we could envisage an increase to $6.8 billion in IDA19. The Sahel Alliance has been an essential opportunity, not only to better harmonise efforts across donors, but also to focus on hot spots of fragility and address their root causes. We hope this will produce success stories that can be replicated in other regions, helping drive growth, enhance poverty reduction and advance shared prosperity around the world.

DAVID MALPASS President, World Bank Group David Malpass began his five-year term as president of the World Bank Group in April 2019. He previously served as under secretary of the US Treasury for international affairs, and represented the United States at the G7 and G20 deputy finance ministerial meetings. Before joining the US Treasury, Mr Malpass was an international economist and founder of a macroeconomics research firm based in New York City. He served as chief economist of Bear Stearns. He also served as deputy assistant secretary of the US Treasury for developing nations and deputy assistant secretary in the Department of State for Latin American economic affairs.

Twitter @DavidMalpassWBG ‫ ‏‬ www.worldbank.org G7G20SUMMITS.ORG

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4 OPPORTUNITIES

FOR INNOVATION

G20 performance on

digitalisation With combating inequalities high on the Biarritz agenda, Meredith Williams, lead researcher on financial regulation, G7 Research Group, says the G7 should do more to make sure everyone benefits from the technology revolution

S

ince the 1978 summit, the G7 has regularly addressed the growing digital divide and digital opportunities. Before the creation of the G7â&#x20AC;&#x2122;s Digital Opportunities Task Force in 2000, the G7 usually focused on increasing technology transfers to developing countries.

This issue now includes digitalisation and the expansion of information and communications technologies in developing countries. The G7 has historically paid little attention to the link between technologyoriented employment and education and skills training. However, there was a focus on the digital economy at the 2018 summit and France in 2019 is emphasising the fight against inequalities â&#x20AC;&#x201C; including the digital divide.

CONCLUSIONS The first reference to digitalisation in the form of ICT came at the 1983 summit. Across all summits, the G7 has produced a total of 15,541 words on digitalisation, an average of 353 words per summit. Between 1975 and 1999 the number of words ranged from zero to 422. The G7 first recognised the opportunities created by new technologies in such areas as ICT and life sciences at the 2000 summit, with a record 3,020 words.

Attention to digitalisation then lessened, with the number of words ranging between

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zero and 604. In 2013, the G7 acknowledged that the digital economy was a growing concern, with 2,498 words on open data, access to data, and the release of data for innovation and improved governance. Yet the 2014 summit had only 487 words on digitalisation, followed by 1,835 in 2015, 1,977 in 2016, 534 in 2017 and 1,120 in 2018.

COMMITMENTS Since 1975, the G7 has made 111 collective, politically binding, future-oriented commitments on digitalisation, or 0.2% of the total 5,525 commitments identified by the G7 Research Group. The first came in 1983, on actively pursuing trade in services and high-tech products. The next appeared in 1991, on the wide and rapid diffusion of advances in science and technology. The 1992 and 1994 summits each had one commitment. Between one and six commitments were produced in 1996, from 1998 to 2003, and in 2006, 2008, 2009 and 2011. The 2013 summit generated 18 commitments. The 2016 and 2018 summits had 23 commitments each, the most made to date.

COMPLIANCE The G7 Research Group has assessed 16 of the 111 digitalisation commitments for compliance by G7 members. Compliance averaged 71%, slightly lower than the overall 75% average for all issues. The highest compliance came from the 2000 summit, with full compliance for setting up the Digital Opportunities Task Force.

The 2006, 2007 and 2009 summits had the lowest compliance at 33%. Generally, compliance scores have fluctuated but risen recently. The 2016 commitment on promoting international cybersecurity and international law and the 2017 commitment on fostering innovation to develop skills to boost economic growth each had compliance of 88%, up from the 2013 commitment with just 67%. Six months after the 2018 summit, compliance on the

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one assessed commitment related to Africa had 100% compliance.

CORRECTIONS Although the G7 recently complied well with its digitalisation and ICT commitments, there is room for improvement. In agreeing to such a wide range of commitments, spanning numerous subjects and addressing broad global challenges, the G7 has struggled to maintain a consistent focus

Conclusions (% words)

on core issues. Yet it appears that when G7 leaders agree to specific digitalisation commitments, compliance scores are much higher, as seen with the high compliance rates from 2000 and 2016.

To improve their compliance, G7 leaders should consider making more commitments on digitalisation, focus on a specific subject and indicate a particular outcome that they want to achieve.

Leaders should also consider referring

MEREDITH WILLIAMS Lead researcher on financial regulation, G7 Research Group Meredith Williams is the lead researcher on financial regulation for the G7 and G20 Research Groups, with a focus on fintech regulation and digital innovation. She is also a lead researcher with the Creating Digital Opportunity Project of the Innovation Policy Lab at the Munk School of Global Affairs and Public Policy at the University of Toronto, focusing on blockchain technology innovation and open banking regulation. She is currently studying for her master’s of law in innovation technology at the University of Edinburgh, while also pursuing a career at the largest global e-commerce platform.

Twitter @g7_rg  www.g7.utoronto.ca

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Commitments (%)

explicitly to the actions required to achieve compliance, and those actions should link to reducing digital inequalities. Compliance is higher with commitments that specify creating a task force, developing new frameworks or implementing a plan of action.

G7 leaders should consider inviting large technology and data companies (such as Google, Facebook and Amazon) to the summit to address topics such as data privacy and data protection, in order to create more transparency. There is mediocre compliance with commitments on data privacy and protection due to a lack of clarity and understanding of the impacts of releasing data for innovation.

G7 leaders can bridge the digital divide with these large technology leaders by continuing previous discussions on the Open Data Charter.

Thus, G7 leaders should continue to make commitments on digitalisation, but must also understand the impacts of the digital economy on areas such as employment and education. They should take steps to make sure everyone can benefit from the technology boom, and fight against rising inequalities on a global scale as the central theme of France’s 2019 G7 presidency.

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OPPORTUNITIES FOR INNOVATION

The workplace equality challenge Under France’s G7 presidency, the G7 Social has provided an opportunity for the International Labour Organization to engage deeply with G7 members. Guy Ryder, director-general, International Labour Organization, highlights the gaps the G7 must help to bridge to ensure decent work for all

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his year’s G7 French presidency has chosen the theme for the Biarritz Summit well. ‘Combating inequality’ is indeed one of the key challenges of our time. A strong declaration by G7 leaders will do much to demonstrate their commitment to providing effective solutions to this critical problem.

The theme of combating inequality strongly aligns with the International Labour Organization’s mandate for social justice, as articulated most recently by our Centenary Declaration for the Future of Work adopted by the International Labour Conference in June 2019. The G7 presidency’s intent for the Biarritz Summit to reaffirm the G7 members’ commitment to respond to global challenges through collective action further provides important support for the declaration’s call for stronger multilateralism to confront the issues facing the world of work.

The G7’s labour and employment track, known this year as the G7 Social, furthered the overarching theme of France’s presidency by concentrating on four goals: further integrating international labour standards into the multilateral system, supporting access to universal social protection systems, supporting individuals through digital transformation and its impact on the future of work, and promoting occupational

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equality between women and men. Because these themes are integral to the Decent Work Agenda, they provided the ILO with an opportunity to engage deeply with G7 members, not only by providing technical inputs on each of them but also by participating during the discussions.

In the context of the G7 Social’s focus on the rapid changes in the world of work, France highlighted the importance of the ILO’s centenary by welcoming Work for a brighter future, the report of the ILO’s Global Commission on the Future of Work.

It also emphasised the critical role played by the ILO in the multilateral debate on economic and social policy, and the importance of the ILO’s groundbreaking new international standard on violence and harassment in the world of work.

The communiqué adopted by labour and employment ministers when they met in Paris on 6–7 June 2019 reflects the work of the G7 Social through an ambitious set of goals: ∙∙

A call to action to reduce inequalities in a global world, including a multilateral dialogue and coordination for the reduction of inequalities and a commitment to promoting responsible business conduct in global supply chains;

∙∙

Commitments in favour of universal access to social protection in the changing world of work;

∙∙

Commitments to empower individuals for the future of work; and,

∙∙

Commitments to ensure gender equality in the world of work.

The ministers’ communiqué and the ILO’s Centenary Declaration have many strong points of convergence that reveal key areas of focus for the future of work.

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THE ECONOMIC AND SOCIAL LINK Both instruments stress the need to strengthen multilateralism.

The G7 communiqué emphasises the inseparability of economic and social policies to reduce inequalities. This finds its counterpart in the Centenary Declaration’s recognition of the “strong, complex and crucial links between social, trade, financial, economic and environmental policies”, which leads to a call for the ILO to play a stronger role in broad policy dialogues among multilateral institutions. The communiqué and the accompanying G7 Social Tripartite Declaration reaffirm and implement the G7 members’ commitment to social dialogue as the means of shaping the future of work we want.

Similarly, just as the G7 communiqué stresses that social protection, in line with ILO Recommendation 202 on Social Protection Floors, “is instrumental in shaping the future of work”, the Centenary Declaration calls on the ILO to “develop and enhance social protection systems, which are adequate, sustainable and adapted to developments in the world of work”. Both instruments draw from the Report of the Global Commission, which underscores the importance of social protection systems to support people through the increasingly complex transitions they will need to navigate the changing world of work in order to realise their capabilities.

The G7 communiqué’s call for empowering individuals hinges on the need to “adapt labour market support and institutions to provide decent working conditions for all platform workers” and “underline[s] the importance of harnessing the potential of current changes to create high-quality jobs for all”. Addressing new business models and diverse forms of work arrangements, the Declaration, for its part, directs the ILO’s efforts to “[harness] … technological progress and productivity growth” to ensure decent work and “a just sharing of the benefits for all”. Both documents draw on prior work of the ILO to call for G7G20SUMMITS.ORG

GUY RYDER

Director-general, International Labour Organization Guy Ryder has been director-general of the International Labour Organization since 2012, having held various senior positions in the ILO from 1999 to 2002 and again since 2010. Ryder leads the organisation’s action to promote job-rich growth and to make decent work for all a keystone of strategies for sustainable development. He has a background in the trade union movement and is the former general secretary of the International Trade Union Confederation.

Twitter @GuyRyder  www.ilo.org

a transformative agenda for gender equality through a broad range of policies, including by closing persistent gender gaps in pay and participation in the labour market. Both instruments recognise the persistent challenges of informality.

As the ILO begins our second century, we are preparing our next programme and budget to respond to the key priority areas identified in the Centenary Declaration. We look to the G7 summit to provide an important boost for the ILO’s efforts to bring that about, and by so doing to provide our own contribution to the G7 priority of combating inequality.

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5

XYXYYXYXYYXYYXYYX YXYYXYXYYXYYXYYXYYXYYXY

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G7 performance on

macroeconomic policy Although the G7 started as an economic summit, its focus on macroeconomics has markedly declined.

Alissa Wang, researcher, G7 Research Group, looks at the tools available to the G7 that have been proven to catalyse higher compliance in this area

E

conomic governance has been at the heart of the G7’s mission since its founding. As a club of the world’s major industrialised democratic countries plus the European Union, the G7 has always given global economic issues, in particular macroeconomic policy, an important place on its agenda. However, as the G7 developed into a more expansive global governance institution concerned with a broadening range of subjects, its focus on macroeconomics has gradually declined.

CONCLUSIONS G7 deliberation on macroeconomics has declined markedly over time. At its first summit in 1975, a substantial 51% of total words in its communiqués were dedicated to macroeconomics issues. In the first decade of G7 summitry, from 1975 to 1984, average deliberation was at 29%. By the second decade, from 1985 to 1994, deliberation declined to 14%. By the third decade, from 1995 to 2004, it declined further to just

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259

commitments made on macroeconomic policy since 1975

85%

Average compliance on assessed macroeconomic policy commitments

6%. Since 2005, deliberation has dropped even more to 4%. Deliberation on macroeconomics hit an all-time low of under 1% in 2006. Although it has risen since then, the rise has remained under 10% in recent years.

COMMITMENTS Since 1975, the G7 has made a total of 259 collective, politically binding, future-oriented commitments on macroeconomic policy. This amount accounts for 5% of the total 5,525 commitments identified by the G7 Research Group. Macroeconomics ranks ninth among all 33 issue areas in terms of the overall number of commitments made. The number of commitments on macroeconomic policy peaked at 18 at the 2016 summit; however, the highest percentage came at the 1982 summit, where of the total 24 commitments, the nine focused on macroeconomics constituted 38%. As with the number of words, the number of commitments has declined over time. In the first decade, the average percentage of commitments on macroeconomic policy was substantial at 19%. In the second decade, the percentage dropped slightly, but remained substantial at 13%. In the third decade, the percentage plummeted to 2%. Since 2005, this percentage has risen slightly to 4%.

COMPLIANCE The G7 Research Group has assessed compliance with 16 of the total of 259 macroeconomic policy commitments made at G7 summits. At 85%, average compliance on macroeconomic policy is higher

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G7 performance on macroeconomic policy, 1975–2018 100

75

50

25

197

197 5 Ra

mb ouil let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve nice 198 1 Ot taw 198 a 2 Ve 198 rsail 3W les illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 ris 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 nan 3 Ev ask ianis lesBain 200 s 4 Se a Isla 200 nd 5G l ene 200 agl 6 St es Pet 200 ersb 7H urg eilig 200 end 8H am okk m aido -Toy ako 200 9 L’A quil 201 a 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix

0

Compliance (%)

than the overall average of 75% across all issues.

Compliance with macroeconomic policy commitments is among the strongest of the 27 issue areas assessed: it is in fourth place, after commitments on the Heiligendamm Process to institutionalise dialogue between the G7 and its outreach partners in first place, migration and refugees in second place, and social policy and information and communications technologies tied in third place.

Over time, compliance with macroeconomic commitments was relatively stable, with a few slight drops. The two commitments from 1996 and the one assessed from 1999 averaged 100%. Compliance dropped in 2003 to 63% and 2004 to 61%, hitting an all-time low. However, compliance with the one assessed commitment from 2011 was 95%, followed

ALISSA WANG Researcher, G7 Research Group Alissa Wang is a researcher with the G7 and G20 Research Groups and chair of summit studies for the BRICS Research Group, all based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She is pursuing a combined JD/ PhD in political science with a focus on international relations and comparative politics.

Twitter @alissawang  www.g7.utoronto.ca

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Conclusions (% words)

Commitments (%)

by an average 85% for the four assessed commitments from 2012 and 89% for the two commitments from 2013. Most recently, average compliance was high at 91% for the two assessed commitments from 2015, dropped to 63% for the one assessed commitment from 2016, and climbed back up to 82% for the one assessed commitment from 2017. Six months after the 2018 summit, compliance on the one assessed commitment related to macroeconomics was 94%.

CORRECTIONS To improve its macroeconomic policy compliance, the G7 should consider careful and selective use of commitment features that catalyse higher or lower compliance. For example, placing a commitment in the preamble of an outcome document corresponds with lower compliance, as demonstrated by the two lowest complying commitments from 2003 and 2004. However, two catalysts that correspond with high compliance are involving private-sector cooperation and specifying a country or region. The 2012 commitment that contained both these catalysts ranked highest in performance at 100%. In addition, increasing the number of macroeconomic policy commitments made at a summit could have a slight positive effect, as the top-performing summits in terms of compliance made more macroeconomic commitments overall. Finally, increasing the number of finance ministers’ meetings before a summit could also have a positive effect on compliance, as the top-performing summits had, on average, a slightly higher number of finance ministerials.

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INCLUSIVE ECONOMIC INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH INVESTMENTS

Interview with Angel Gurría

Global growth for global gain Angel Gurría, secretary-general, Organisation for Economic Co-operation and Development, shares with John Kirton how the OECD is advancing equality, where it is helping to add economic value and what the digital transformation means in economic terms How is the Organisation for Economic Co-operation and Development helping the Biarritz Summit to advance host President Emmanuel Macron’s goal of fighting inequalities?

The OECD has a long-standing engagement in fighting inequalities and we have been raising awareness on this major issue. All of our work is about inclusive growth – not only because it is fair, but also because it is sound economic policymaking.

Back in 2008, we published Growing Unequal? Income Distribution and 92

Poverty in OECD Countries, and there have since been four more flagship reports on this issue, most recently this May, Under Pressure: The Squeezed Middle Class. We have also produced dozens of working papers and thousands of statistics and cases. So we commend President Macron’s choice to set fighting inequality as the overall theme for Biarritz. It is the defining issue of our times.

Growth has returned in all major regions of the world, yet inequality is staggering within countries – it is at its highest point in many countries for 30 years, and growing. The top 20% of households across OECD countries hold on average financial wealth worth around 72 times that of those in the bottom 20%.

Intergenerational and social mobility is very low, and the risk of slipping down the social ladder is high. This leads to further ‘squeezed middle classes’ – and the middle class is the bedrock of liberal democracies.

We are lending our expertise to provide evidence and policy recommendations to support the G7 in finding common solutions to this global challenge, building on our contributions to the G7 Bari Agenda in 2017 and the Charlevoix equality and growth statement last year with the OECD Inclusive Framework and our Business for Inclusive Growth Platform for Policy and Action. We are also inviting G7 leaders to take concrete action across the employment, gender, development, education and finance dimensions to support various G7 deliverables.

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ANGEL GURRÍA

Secretary-general, Organisation for Economic Co-operation and Development Angel Gurría has been secretary-general of the OECD since 2006, following a distinguished career in public service in Mexico, including positions as minister of foreign affairs and minister of finance and public credit in the 1990s. He has participated in various international not-for-profit bodies, including the Population Council and the Center for Global Development. He chaired the International Task Force on Financing Water for All and is a member of the United Nations SecretaryGeneral’s Advisory Board on Water and Sanitation and the World Economic Forum’s Global Agenda Council on Water Security.

Twitter @OECD ‫ ‏‬ www.oecd.org

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Where else has the OECD been most able to add value?

As you know, we are the house of structural reforms and evidence-based policymaking, so we have been looking at what policies have worked better and which have not, and looking at their costs, complementarities and sequencing in gender, the future of work, education and digitalisation. When you tackle an overarching objective such as fighting inequalities, you need a comprehensive approach to public policies, dealing with several items simultaneously and leveraging their synergies and identifying trade-offs, although each has to be treated separately.

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INCLUSIVE ECONOMIC INVESTMENTS Gender is a key element, and one in which we have a lot of experience to draw upon, including through the G20’s 25 by 25 target. We are participating in the G7’s better gender law initiative, helping identify laws and legislations as best practices for gender equality and women’s empowerment, supporting implementation and finding mechanisms for effective peer learning.

The G7 Social ministerial meeting helped reinforce social justice by integrating social and labour norms in multilateralism, supporting universal social protection, finding common policy responses to the new forms of work and ensuring gender equality in the workplace. The OECD has a range of policy tools that we invite countries to take up and implement to help apply the highest social and sustainability standards in globalisation, such as our instrument on responsible business conduct and due diligence.

Environmental challenges, and most notably the erosion of biodiversity as the planet is now facing its sixth mass extinction, exacerbate inequalities and create insecurity. The efforts led by members of the G7 in fostering the green transition and the goals defined by the 2030 Agenda through the preservation of biodiversity are timely and necessary. The OECD, faithful to our long-standing engagement on the environment, is helping the French presidency deliver on its priorities on biodiversity by putting forward the business and economic case for preserving biodiversity and contributing to elaborating an ambitious post-2020 global biodiversity framework.

In the joint education and development agenda, we are helping to advance the G7’s girls’ education agenda and develop a compendium of good practices

Top 20%

The top 20% of OECD households hold average financial wealth worth

72x the wealth of those in the bottom 20%

Bottom 20%

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to promote girls’ education, thanks to our analysis drawing on the PISA for Development exercise and the Social Institutions and Gender Index. We are also working on vocational education and training, financing for education, teacher training, and early childhood education and care.

But the responsibility for living up to the challenge of fighting inequalities cannot rest only on the shoulders of governments. It requires the whole of society. We are working to bring together governments, companies and investors on a common agenda for inclusive growth. We propose that at Biarritz, the public and private sectors seal their engagement to support programmes that will reduce different types of inequalities – spatial, gender or in opportunities.

How is the OECD helping the G7 seize the opportunities offered by digital technology and artificial intelligence?

The OECD has been exploring the profound implications of the digital transformation through our Going Digital project. AI is one major component of a digital ecosystem that includes computing power, the Internet of Things, blockchain, 5G, big data and cloud computing. AI brings a whole new range of benefits. It helps people and organisations make better decisions. It detects patterns in enormous volumes of data and it models very complex and interdependent environments. It allows much more accurate and less expensive predictions and decisions. It promises productivity gains. We are seeing the rapid uptake of AI in finance, transport, health care, security, defence and manufacturing, and even marketing and advertising. It is a growth area for investment and business development – in 2016 alone, the amount of private equity investment in AI start-ups doubled to reach $16 billion by 2017.

However, AI also raises new challenges to ensure that AI systems are trustworthy, respecting the needs of people and society for privacy, security, safety and autonomy, fairness and quality work, as well as transparency and accountability of AI-powered outcomes. Leveraging AI also requires data, models and computing power, and the capacity to adapt organisational processes. AI can also raise ethical and diversity concerns, including the safety of autonomous systems that evolve over time, sometimes in unforeseen ways, and the dangers of transferring existing biases from the analogue world into the digital world – including those related to gender and race — notably for high-stakes decisions in areas such as criminal justice or employment.

Based on the evidence that is being developed as part of the Going Digital project, including the AI Principles, the OECD is working with the French G7 presidency to support the creation of a multi-stakeholder Group of International Experts on Artificial Intelligence to assist with and guide the responsible adoption of AI that is human-centric and grounded in human rights, inclusion, diversity, innovation and economic growth.

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INCLUSIVE ECONOMIC INVESTMENTS

“All of our work is about inclusive growth, not only because it is fair, but also because it is sound economic policymaking”

This year, the G7 summit is taking place after the G20’s summit in Japan in June. Has that changed the dynamic?

We have had to adapt a little, but this hasn’t fundamentally changed the outcomes or the internal dynamics of each forum. Both have complementary priorities and coordination roles in global governance.

The origins of the G7 derive from the time of the Plaza Accord, with the world’s largest economies coming together to tightly coordinate their action, given their systemic impact and weight in the global economy. This has since determined its internal dynamics. The G20 dynamic is somewhat different: it is a response to a shift in the global economy that accelerated during and after the financial crisis, with the emergence of China, Brazil, India, Indonesia and South Africa. These actors have become key players and policy coordination with them is therefore essential. But the G20 is much more heterogeneous. As such, its role is to ensure global policy consistency, mutual reinforcement and a global level playing field.

In that regard, their roles are highly synergistic.

Take the issue of international taxation. Some of the main fault lines over the digital services tax are actually among G7 countries. Within this context, finding agreement at the G7 level on key parameters of the solution to challenges arising from the 96

digitalisation of the economy can help pave the way once the G20 has also been brought on board, for a near-universal solution within the context of the Inclusive Framework on Base Erosion and Profit Shifting. This is how BEPS was set up, leaving a sequenced role to both G7 and G20.

AI is another example. The G7 is putting forward the creation of an international panel on AI that would foster cooperation on the adoption of human-centric AI. In the G20, members have agreed on non-binding principles drawn from OECD principles to guide the adoption of responsible AI. There are several other examples of constructive articulation of agendas between the G7 and G20, such as gender or marine litter.

The G7 has a logic based on the world’s largest economies coming together because of their impact and because they represent such a large percentage of global domestic product, so they need to understand the impact of each other’s policies and, ideally, coordinate them. In the G20, because the world has changed with the emergence of China as well as Brazil, India, Indonesia and South Africa, members represent a broader diversity of geography and levels of development.

It all tells you one thing: work undertaken in both forums confirms that global issues can only be addressed and dealt with by global and multilateral approaches.

G7 FRANCE: THE BIARRITZ SUMMIT — August 2019 G7G20SUMMITS.ORG

From Routledgeâ&#x20AC;Ś Social Closure and International Society

The G20

Tristen Naylor

Peter I. Hajnal

Evolution, Interrelationships, Documentation, Second Edition

Status Groups from the Family of Civilised Nations to the G20 An examination of how actors compete for a seat at the table in the management of international society and how that competition stratifies the international domain.

This revised and updated edition presents detailed analysis of the history and current state of the G20, and the challenges it faces.

Accountability for Effectiveness in Global Governance Edited by John J. Kirton and Marina Larionova

The Global Governance of Climate Change G7, G20, and UN Leadership

John J. Kirton and Ella Kokotsis

This book examines how well central global institutions comply with their commitments and how their effectiveness can be improved through measures to deliver better results.

An analysis of the regimes for controlling global climate change that demonstrates the effectiveness of the G7 and G20 as an alternative to the United Nations.

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INCLUSIVE ECONOMIC INVESTMENTS

Interview with Robert Fauver

Outlook on the global economy Robert Fauver, former US G7 sherpa, shares with editor John Kirton his perspective on the global economy â&#x20AC;&#x201C; from what is making it tick to shortand long-term threats to growth 98

What is the current state of the global economy?

Putting aside for the moment the Middle East oil problem, nothing looks like it would bring anything other than a very modest slowdown, if that. In general, the global economy is on a steady growth path.

For the United States, consumption spending and private investment spending look solid enough to support 3% annual growth. Net exports are always an unknown factor, but from the domestic side it is solid 3% growth.

The big unknown in Europe is, of course, Brexit.

It is still upsetting expectations, so consumption in some parts of Europe is being held back. Italy is still a weak spot, but it has survived weaker conditions, and its little-talked-about black economy continues to bring the population a decent standard of living. France is still going through a reaction to

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Emmanuel Macron’s presidency. His early initiative on changing labour laws backfired with unrest and it is still holding growth down. Germany is trying to figure out what is going to happen in the post-Merkel era, so expectations are a little shaky there. Europe is on the weaker side of the G7; nothing disastrous, but nothing optimistic either.

Japan’s first quarter was below expectations, but it is coming into a growth spurt because of the summer Olympics next year. That huge influx of tourist dollars will sustain significant growth – maybe almost 2% over the next 18 months. That is a bright spot in the outlook that most econometric forecasters do not consider.

What are you most worried about?

Two things. First, the trade situation led by the United States’ continual bombastic approaches to trade negotiations unsettles markets. Regardless of the anxious wait for passage of the new NAFTA, the final product is a significant improvement. I think the same will come from China when the dust settles, but in the meantime it does upset markets.

Second, if the oil crisis in the Middle East and the Iranian situation continue, we could see uncertainty in the financial market. The longest growth of the markets in modern US history could end, not for underlying economic factors but for geopolitical tensions and global factors. But if you put energy markets in the Middle East and the Suez Canal area to the side, there is plenty of room for upward growth for 18 months, perhaps with a modest correction.

Will inflation reappear?

It is far too early to worry about a return of rapid inflation. We have gone for 14 years with almost none, which is not a long-term path that anybody would expect. Increased labour mobility and wage flexibility are beginning to enter into the US market. We are seeing wages and lower and middle incomes rising, finally. That will put some upward pressure on prices. There is not much slack within the domestic economy. Excess capacity is relatively tight, so I would not be surprised to see 2% inflation.

At what point should markets worry about mounting debts and deficits and quantitative easing?

It will be a medium-term concern in the next year or two. I am worried about the current move in the United States about putting a two-year cap on expenditures, leaving a $1 trillion deficit for the next two years. That is an outrageous number – nowhere near some of the Europeans, but we do not have the slack that they have.

It is taking a very long time to come out of the crisis.

Monetary policy has been excessively cautious in returning to positive real interest rates. If the US Federal Reserve cuts rates again, we may return to negative interest rates, which are never good over any length of time. But the Fed will come back around. I am a little concerned about the European Central Bank, with new leadership from somebody with no financial market experience or economic training. The new ECB leader is an astute politician and very good at working with diverse groups, but that does not necessarily make for a good central banker.

Should the G7 leaders at Biarritz take a stance on interventions in exchange rate policy for competitive purposes?

There is a non-market-determined exchange rate in China but not by purchase and sale by the central bank. Constraints on capital movements are much more G7G20SUMMITS.ORG

Europe is on the weaker side of the G7; nothing disastrous, but nothing optimistic either” significant in reducing demand for the renminbi in international markets, which has a more significant effect on creating a non-market determined exchange rate than direct market intervention.

Within the G7 there is not much evidence of direct market intervention other than smoothing.

Should the G7 leaders focus on structural reforms?

Yes, structural rigidities continue to hinder the efficient allocation of resources within Europe and, to some extent, in Japan. There is a lot in labour mobility that is hindered by rules and regulations and labour market arrangements. There are product price determinations still unable to take place in a market sense. There are institutional rigidities – pension schemes being one, which is a significant concern given ageing populations in most of the G7 countries. Underfunding pensions both public and private is a significant overhang on medium- and long-term growth. There needs to be a significant discussion by leaders, central bankers and finance ministers. Japan is leading us down that path because its ageing population and underfunded liabilities are comparatively more significant.

ROBERT FAUVER Robert Fauver is president of Fauver Associates, LLC. He spent 32 years as a career public servant in the United States working in the Treasury, State Department, White House and National Intelligence Council. He was President Bill Clinton’s sherpa for the G7 summits of 1993 and 1994 and special assistant to the president for national security and Pakistan following their testing of nuclear weapons. He negotiated the yen-dollar agreement that led to the beginning of the liberalisation and internationalisation of Japan’s financial markets.

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The rapid uptake of non-traditional banking services could prove a threat to global financial equilibrium if market segmentation is not addressed by world leaders, writes Chiara Oldani, professor of economics, University of Viterbo ‘La Tuscia’

Preventing the next financial crisis 100

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T

he current risk to the global financial system and its stability in 2019 is growing market segmentation that could substantially modify the delicate equilibrium achieved after the 2007–09 crisis. Corporate and public debts in some G7 countries are vulnerable because of the growth of non-traditional banking, which reduces the effectiveness of monitoring and consumer protection (such as measures to combat money laundering and fraud and to protect data). They are also vulnerable because of the long-term effects of the sub-prime crisis, which include increased unemployment, reduced consumption and growing distrust.

Since 2009, efforts by G7 countries to control risks have come at a high price: extraordinary expansionary monetary policies lead to zero-interest rates, to alleviate the credit crunch, but they also lead to reduced revenues in the finance industry, driving the need to innovate, find new businesses and circumvent rules. The Financial Stability Board has substantially contributed to improving the resilience of the global finance sector, but its duties are not over under its new governor, Randal Quarles. By December 2018, the notional value of over-the-counter derivatives had reached $544 trillion and two thirds of contracts were cleared by central counterparties, the most important of which are often systemically important banks. In fact, the introduction of central counterparties for OTC derivatives in 2008 reduced the risk, but increased concentration in the industry. Higher market concentration can represent a new source of systemic risk, because the relationship between banks and central counterparties is highly symbiotic.

The sub-prime crisis forced western countries to cooperate and improve financial regulation to restore confidence and trust. Global financial regulation in the European Union, with its common market and prudent and stringent rules, and the United States converged until the United Kingdom voted to leave the European Union in 2016. In 2017, US president-elect Donald Trump announced the dismissal of the Dodd Frank Wall Street Consumer Protection Act. In May 2018, the US Congress approved a substantial change to the prudential rules that had been introduced in 2010, according to which a financial institution with total assets in excess of $250 billion – instead of $50 billion – should be considered systemically important; this higher level allowed many institutions to lend and trade, with less supervision and capitalisation. This freedom is considered necessary to gain market share, especially as digital banking and fintech services are spreading throughout the global financial system.

THE RISE OF FINTECH The growth of non-bank financing deeply modifies the structure of markets and also the finance

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G7 leaders should reduce market fragmentation in traditional finance, because fragmentation can weaken supervision and monitoring”

544tr

$

Notional value of OTC derivatives

²⁄₃

of contracts cleared by central counterparties

112bn

$

Volume of fintech in 2018

industry. Fintech doubled its volume up to $112 billion in 2018. Credit volumes are greater in countries with less stringent banking regulation, in particular China, the United States and the United Kingdom. The sustained demand for digital currencies, such as Bitcoin, Ethereum and probably Facebook’s Libra after 2020 is also the result of reduced regulatory coordination among countries that does not substantially impede the trade of such cryptocurrencies, and indirectly contributes to their development.

G7 leaders at the Biarritz Summit should actively promote financial stability. In particular, they should reduce market fragmentation in traditional finance, because fragmentation can weaken supervision and monitoring. History teaches us that heavier regulation pushes further innovation, yet the most efficient and feasible way to address the growth of non-traditional banking cannot be a ‘global financial regulator’; instead, leaders at Biarritz should identify common incentives to encourage efficiency and competition in the non-traditional banking and finance sectors, to drive future policy proposals and achieve stability.

CHIARA OLDANI Professor of monetary economics, University of Viterbo ‘La Tuscia’ Chiara Oldani is a professor of monetary economics at the University of Viterbo ‘La Tuscia’ and the director of the Rome office of the G7 and G20 Research Groups. Her research currently focuses on over-the-counter financial derivatives and the complex web of counterparty risk, widely considered a major precipitating factor of the global financial crisis.

Twitter @chiaraoldani  www.unitus.it

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regional security in the Middle East When it comes to security in this region, more commitments do not equal greater compliance. Explicit links to broader missions and the inclusion of regional guests in summits are among the mechanisms available to achieve more, writes Maria Zelenova, research analyst, G7 Research Group

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ince it first mentioned security in the broader Middle East at the 1980 Venice Summit, the G7 has regularly addressed the use of force, sanctions, diplomatic suasion and financial support to mitigate conflict in the region. The democratic mandate of the G7 makes it well suited to this task for a region that includes Afghanistan to the west, the Persian Gulf to the south,

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Egypt and Libya to the east, and Turkey to the north. Importantly, G7 members often commit to comply with United Nations Security Council resolutions related to the Middle East.

CONCLUSIONS At Venice, G7 leaders condemned the Soviet military occupation of Afghanistan and endorsed Resolution ESVI/2 passed by the United Nations General Assembly. They dedicated 474 words and eight paragraphs to building a more secure Afghanistan.

They addressed security in the Middle East at almost every subsequent summit, except in 1983, 1985, 1986, 1990 and 2003.

Their attention peaked at 4,803 words made at the 2011 Deauville Summit.

Overall, communiqué conclusions focused on the Arab–Israeli dispute, promoting full compliance with relevant resolutions passed by the UN General Assembly and Security Council and with humanitarian support in the region.

COMMITMENTS Since 1984, G7 summits have produced 141 collective, politically binding, future-oriented commitments on security in

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G7 performance on

the broader Middle East, as identified by the G7 Research Group.

The first commitment, made at the 1984 London Summit, called for the peaceful settlement of the Iran–Iraq conflict. The next appeared only at the 1996 Lyon Summit, when leaders pledged to enforce implementation of “all UN Security Council resolutions concerning Iraq and Libya”.

They produced more commitments on the broader Middle East at the 2001, 2004, 2005 and 2006 summits, and at every summit after 2008. Most recently, the 2016 and 2017 summits produced commitments on the stabilisation and rehabilitation of Syria, as well as on the defeat of terrorist networks operating there.

COMPLIANCE The G7 Research Group has assessed 11 of all the commitments on broader Middle East security for compliance by G7 members. Compliance averaged 87%, which is significantly higher than the overall average of 75% for all subjects.

The highest compliance came with the assessed commitments from the 2005, 2006, 2010 and 2011 summits. Full compliance came with commitments on mobilising

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Compliance (%)

political support for financial contributions, offering economic and humanitarian support for the Lebanese people, establishing an Afghanistan-led national reconciliation and reintegration process, and supporting the transition process of Afghanistan. The lowest compliance score of 72% came from 2008, on accelerating Afghan police and other elements of security reforms.

Generally, compliance with commitments on security in the broader Middle East has decreased. Most recently, the 2016 and 2017 commitments on security and stability in Syria achieved scores of 87% and 75% respectively – a drop from the perfect compliance

Conclusions (% words)

scores often achieved on commitments in previous years.

CORRECTIONS The 11 commitments assessed for compliance suggest that the G7 can improve its compliance in the following four ways.

First, the leaders should be cautious about making more commitments on security in the broader Middle East, for more commitments on this subject do not increase compliance with those assessed. For example, the 2013 Lough Erne Summit made five commitments, but the one assessed for compliance had a below-average score of 83%.

Second, leaders should make more explicit links in their commitments to the

MARIA ZELENOVA Research analyst, G7 Research Group Maria Zelenova is a research analyst for the G7 and G20 Research Groups based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She is especially interested in human security, human rights and climate change. Maria holds an honours bachelor of arts in political science and history, and is pursuing a master of arts in international security at Sciences Po in Paris.

Twitter @mary_zelenova  www.g7.utoronto.ca

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Commitments (%)

G7’s distinctive fundamental mission of open democracy and individual liberty.

Third, they should link their commitments to issues such as financial regulation, economic development and immigration.

Commitments that included a reference to one or both of these missions or subjects achieved near-perfect compliance scores.

Fourth, G7 leaders should invite more regional guests to the summits. Doing so creates more outreach and accountability, which in turn relates to higher compliance. Inviting regional guests, such as the leaders of Egypt, Turkey or Libya, helps produce more ambitious, inclusive commitments. Two summits that did so – L’Aquila in 2009 and Muskoka in 2010 – achieved compliance of 94% and 100% respectively.

Thus, G7 leaders should continue to put humanitarian crises in the Middle East on their agenda, address the impact of those crises on global economic growth, and increase outreach to regional partners and relevant international organisations.

With the leader of Egypt invited to the 2019 Biarritz Summit, there may be an opportunity to continue forging the links between security in the region and economic inclusivity, and to build on the texts of relevant United Nations Security Council resolutions.

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The digitalisation of crime – and law enforcement In an increasingly complex and transnational security landscape, Catherine De Bolle, executive director, Europol, says we must pool our resources and expertise and ensure discussion and political will at the highest levels

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n 15 March 2019, the world watched in horror as a terrorist attack, against two mosques in Christchurch, New Zealand, was live-streamed. The speed and volume of internet abuse in the aftermath of the attack showed the limitations in addressing such threats as well as made clear the harm that can be caused by terrorist and violent extremist content online.

After Christchurch, we realised we needed to further bolster society’s response to these evolving threats. Consequently, Europol is now working with the European Commission and the Global Internet Forum to Counter Terrorism to create a crisis protocol that aims to facilitate rapid assessment and effective

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coordination and management of a future online crisis between EU law enforcement and online service providers.

Europol is also already working on combating terrorist content online through our EU Internet Referral Unit. Despite the shrinking physical footprint of the so-called Islamic State, the group continues to galvanise a significant number of online supporters.

The broad dissemination of terrorist content online along with the additional layer of anonymity provided by many platforms presents challenges for law enforcement. For these reasons, a common EU response to terrorist content online was necessary. Therefore, in 2015, Europol established the EU IRU to detect and investigate malicious content on the internet and social media. It has since become a crucial tool in combating online radicalisation in the European Union.

THREATS TO LAW ENFORCEMENT Indisputably, the internet and technology are fundamentally shaping security challenges and responses in the European Union. The opportunities for law enforcement in harnessing new technologies are as great as the challenges they pose and their potential utility by criminal actors.

For example, 5G and the Internet of Things are considered to be some of the most critical building blocks of our digital economy and society over the next decades. They also might jeopardise law enforcement’s capacity to carry out technical investigations and lawful interceptions, necessary to investigate serious and organised crime or terrorism.

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The opportunities for law enforcement in harnessing new technologies are as great as the challenges they pose and their potential utility by criminal actors” Similarly, artificial intelligence can empower criminals who seek to attack systems and networks and become an advanced tool in the arsenal for cyberattacks. However, AI can provide essential opportunities in the area of data processing for law enforcement. In the case of child sexual exploitation, the amount of material detected online by law enforcement and the private sector continues to increase. AI can help ensure law enforcement can properly assess the enhanced volume of data coming in, while also being able to engage in foresight based on pattern recognition.

As executive director of Europol, I know that EU police chiefs and law enforcement are concerned about criminals’ use of new technologies and about our ability as law enforcement to adapt our response to an increasingly complex and transnational security landscape. There is a need to pool resources and expertise at the European level.

Europol has a strong culture of innovation, which aims at finding solutions to these challenges. We are currently working on complementing national capabilities and reducing the need for investments at the national level by developing a highly specialised, state-of-the-art decryption platform, forensic services and facial recognition tools based on artificial intelligence, for example.

Europol’s Strategy 2020+ sets out my ambition to establish Europol as a hub for innovation bringing together law enforcement, the private sector and academia, to facilitate the development of innovative solutions tailored to the needs of law enforcement.

Such an entity would enhance the EU’s ability to articulate an operational vision of innovation within the realm of internal security, and be ready for future disruptions. Additionally, the aim is to collaborate with the private sector to contribute to developments in innovation to make sure that new technologies are safe and secure so society and law enforcement can benefit from them.

Europol’s mission is to contribute to a safer Europe by providing the best possible support to EU law enforcement. To achieve this goal and more effectively tackle common security threats in Europe and in the world, it is clear that we all need to join forces.

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providing joint responses to international security challenges, especially against the use of the internet for terrorist purposes. Security and the rule of law are founding principles of the EU and integral elements for the future of our societies and democracies. Thus, it is important not only that there is discussion within the law enforcement community on finding solutions to security issues, but also that there is discussion and political will at the highest levels such as the G7. I hope it will be a successful summit.

CATHERINE DE BOLLE Executive director, Europol

Before taking up her post as Europol’s executive director in May 2018, Catherine De Bolle served as general commissioner of the Belgian Federal Police from 2012. Prior to her appointment as Belgian police commissioner, De Bolle was chief of police in Ninove. In January 2015, she received the title of public manager of the year. From November 2015 until November 2018, she was a member of the executive committee of Interpol. De Bolle studied law at Ghent University and then went on to graduate from the Royal Gendarmerie Academy in Belgium.

Twitter @europol  www.europol.europa.eu

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Securiport

Civil Aviation Security Implementation

Passenger Biometric Recognition

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he security of nations depends on data. We need the necessary data to track known and existing threats and to identify unknown and emerging threats. We also require tools to analyse and apply data to strategic matters of security. In doing this, there are three key questions to ask.

WHY DO WE NEED DATA? Since security is about human beings, and human nature is highly unpredictable, data — and, most importantly, data analytics — play a key role.

If someone is approaching a country’s border, that country needs to know: Who is this person? What are his or her intentions?

Is this the right place for this individual?

The country also needs to quickly discern whether an individual is a criminal, terrorist, drug or human trafficker, or a money launderer, sexual predator, or potential kidnapper.

For a nation to maintain security, it must determine if the person seeking entry is trustworthy.

This individual must be able to interrelate with society in a healthy manner for the continued productivity and safety of all.

The answers to these and other questions can be found by analysing data.

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Traveller Risk Assessment

Person of Interest Identification

Security and analytics: Securing borders with AI When leveraged correctly, data revolutionises national security. Enrique Segura, president and CEO of Securiport, explains the role of analytics and artificial intelligence in helping countries keep their borders safe

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ADVOCACY

Securiport WHERE DO WE FIND DATA? Data can be found literally everywhere: in government archives, libraries, newspapers, books, universities, credit reports, the internet, social media, purchase histories, and routine behaviours evinced through the everyday interaction with software. Having enough data is not the problem.

In fact, the volume of data available is so extraordinarily massive that the real challenge lies in identifying and extracting relevant, useful, and reliable data.

Data becomes biased (and therefore faulty, misleading and useless) when we have preconceptions about what we want to see. As rational human beings, we need to justify our observations and conclusions.

We gravitate subconsciously towards specific types of data that support our preconceived ideas.

However, sometimes data is simply wrong.

It can become tainted by its association with unrelated or irrelevant issues. It may be unsubstantiated or perhaps biased for reasons unknown to the analyst.

All these factors can, and will, lead to erroneous results and assumptions. Our mass of data is vast and homogenised, and it ranges from the questionable and tainted to the extraordinarily crucial. Tools that can identify, quantify, and discard fake and irrelevant data are vital.

Data must be reliable enough to make secure decisions. We must be able to identify when data is unreliable and factor it into our conclusions. Tools that can filter fake and irrelevant data add essential refinement to the process. These tools are still in an embryonic state, but they are developing quickly due to their importance.

This is where analytics comes in.

WHAT KIND OF DATA DO WE NEED? This encompasses everything from the data we start with to the data critical to making a decision. We need data that constantly refines itself through exposure to analytical tools – tools that become increasingly better over time at discerning diagnostic facts from fiction and rendering our data more and more reliable.

It is said that science can be thought of as a discipline that requires a degree of evidence to build knowledge around phenomena, but it also blends logic with imagination. Therefore, the science of analytics must be self-learning so it can refine its conclusions as it progresses.

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The volume of data available is so extraordinarily massive that the real challenge lies in identifying and extracting relevant, useful and reliable data” can trigger other data evaluations. If the same person cannot certify his or her address upon the next border entry, or the data indicate a recent criminal activity or an over-extended visa, these data points can build vital signposts and orient further inquiry.

DR. ENRIQUE SEGURA President and CEO, Securiport Dr. Segura, PhD, MBA, a native Argentine based in Washington DC, works with foreign governments and the civil aviation industry to design and implement next-generation border management solutions. As an avid philanthropist and an economist by trade, he has developed a financial model that allows immigration systems to be deployed across the globe with no cost to the host country.  www.securiport.com

This discipline is powered by artificial intelligence and facilitates the evaluation of data over time to discover changes, trends and anomalies. These analytics adapt, refine and grow. For instance, if an individual enters a country stating that his business is finance and the next time Bharat Masrani that he is in real estate, that discrepancy

THE FOUNDATIONS OF AI ANALYTICS Analytics powered by AI do not merely analyse the evolution of static data records. They also derive important information from the analysis of sensitive behavioural data that describe how people react in front of an authority. Do they hesitate? Do they act confused? Does their blood pressure go up? Do their eyes dilate?

All these are important indicators that, when monitored and compared over time, provide clues about individuals and their possible intentions.

Behavioural data can go beyond the physical aspect of the individual to include social, financial, legal, educational and medical information, allowing for the unique identification of each person.

Through AI-driven analytics, we can build a baseline of expectations and categories of data through which further and further comparisons may be made, while constantly refining the process. The result is ever greater accuracy and reduced risk for nations.

The combination of data records allows us to construct a map that can profoundly and powerfully define individuals, expose what they may be hiding, illuminate what laws they may be intent on violating, and what dangers they may pose. This is how we help nations maintain security, and safeguard their people, assets and peace.

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No borders in cyberspace The digital realm presents a daunting array of threats to democracy. Starting with the G7, countries must take measures to address false information, market dominance and poor transparency in the online world, writes Fen Osler Hampson, chancellor’s professor, Carleton University

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ll democracies are now wrestling with the issue of foreign manipulation of internet-based platforms to distort the political conversation during elections and deceive voters through false information. This includes hacking and leaking, bot farms and trolls that are aided by the online equivalent of what Soviet leader Joseph Stalin called “useful idiots”, and ‘deep fake’ videos that are intended to confuse and deceive.

Clearly, no single country or political jurisdiction can deal with these cyber challenges on its own because there are no real borders – or at least controllable ones – in cyberspace.

As the club of the world’s leading democracies, the G7 plays an important role in promoting greater cooperation to address a wide range of threats to democracy in the digital sphere.

Canada promoted the development of a rapid response mechanism at the 2018 Charlevoix Summit, and continued as chair of that initiative to ensure follow-through in coordination, information-sharing and collaborative development of best responses.

Nevertheless, there is still a great deal more that must be done to defend democratic institutions and make citizens aware of the risks of manipulation, distortion and misinformation through social media and other online platforms. More must be done, too, to ensure greater levels of cooperation as national regulators struggle to address these and other challenges in the cyber realm.

However, unless countries – starting with the G7 – address the issue of the overwhelming market concentration and dominance of a small number of online platforms such as Facebook, Twitter, Google, Amazon and, in the entertainment world, Netflix, they will be whistling past the proverbial graveyard in their efforts to develop new rules on privacy, hate speech, free speech and other online challenges.

These tech giants enjoy oligopolistic, if not monopolistic, control in cyberspace. Furthermore, the algorithms that manage and curate online content on these platforms generally tend to be written by young, white males who have limited world experience and lack the kind of educational background that would expose them to different cultural viewpoints and processes of moral reasoning.

CLOSELY KEPT SECRETS The lack of transparency in the way big data is harvested and curated by major internet platforms also means that the general public and regulators have little knowledge of corporate business models and how data is manipulated and marketed. Algorithms are closely kept trade secrets, much like the recipe for Coca-Cola.

Some knowledgeable observers now question whether democracy can actually survive in a world of big data and artificial intelligence, where monopolies rule the internet and the online world. As Dirk Helbing and his colleagues in the prestigious journal Scientific American explained, “Today, algorithms know pretty well what we do, what we think and how we feel – possibly even better than our friends

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Some knowledgeable observers now question whether democracy can actually survive in a world of big data and artificial intelligence, where monopolies rule”

and family or even ourselves. … The more is known about us, the less likely our choices are to be free and not predetermined by others. But it won’t stop there. Some software platforms are moving towards ‘persuasive computing’. In the future, using sophisticated manipulation technologies, these platforms will be able to steer us through entire courses of action, be it for the execution of complex work processes or to generate free content for internet platforms, from which corporations earn billions.

The trend goes from programming computers to programming people.”

In George Orwell’s novel Nineteen Eighty-Four, a big face gazed down from a wall with a caption that said “Big Brother Is Watching You”. In today’s world, Orwell’s Big Brother seems archaic and clumsy. Private firms have far more sophisticated tools at their disposal. Scientific American calls this the politics of “big nudging”, where on a massive scale, citizens are steered towards preferred kinds of behaviour.

Is there a role for the G7 in addressing these online challenges to democracy? You bet there is.

FEN OSLER HAMPSON

Chancellor’s professor, Carleton University Fen Osler Hampson is a fellow of the Royal Society of Canada and chancellor’s professor at Carleton University in the Norman Paterson School of International Affairs. He is the author of 14 books, and editor or co-editor of 30 volumes on international affairs, including (with Eric Jardine) Look Who’s Watching: Surveillance, Treachery and Trust Online.

Twitter @fenhampson

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Election integrity is high on the G7 agenda following foreign hacking and viral disinformation campaigns. Christopher Sands, senior research professor, Paul H. Nitze School of Advanced International Studies, Johns Hopkins University, explores the measures being taken to defend democracy

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rexit and the 2016 US presidential election raised the spectre of foreign intervention in democratic processes. False information designed to spread virally through social media, sensitive information leaks on candidates (or threats thereof) and even electronic tampering with voting machinery called official results into doubt.

Russia and China were often blamed but denied responsibility, and investigations failed to restore public confidence in election integrity.

Unsurprisingly, then, G7 leaders – all heads of democratically elected governments – have placed election integrity on their agenda. It was discussed indirectly by G7 leaders at Taormina in 2017 in terms of defending against cyberattacks on critical infrastructure.

At Charlevoix in 2018, discussions advanced to permit consensus on the Charlevoix Commitment on Defending Democracy from Foreign Threats, which committed to definitions and coordinated responses to election interference. The G7 pledged that members would: • Respond to foreign threats, together and individually, to meet the challenges facing their democracies; • Strengthen cooperation to prevent, thwart and respond to malign foreign interference aimed at undermining the democratic processes and the national interests of a G7 member; • Establish a G7 rapid response mechanism to help identify and respond to threats, including through sharing information, analysis and identifying opportunities for coordinated responses;

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Restoring trust in the election process

• Share lessons learnt and best practices with governments, civil society and the private sector and develop initiatives that promote free, independent and pluralistic media, fact-based information and freedom of expression; • Engage directly with internet service providers and social media platforms regarding malicious misuse by foreign actors, to improve transparency and prevent the illegal use of personal data and privacy breaches; • Support public learning and civic awareness to promote critical thinking and media literacy on intentionally misleading information and improving online security and safety; and • Ensure transparency on funding for political parties and advertising, especially during election campaigns.

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At Biarritz, the timing might now be ideal for a forward-looking discussion of collective actions. National elections are scheduled in Canada and Japan in 2019, in the United States in 2020, Germany in 2021, France in 2022 and Italy in 2023. Britain’s next election must take place by 2022 but may come sooner.

G7 leaders have three options related to election integrity that can be summed up as the three Ds of detection, defence and deterrence.

Advance detection of interference is difficult but necessary. Officials have learned a good deal through forensic investigations of past election interference.

At Biarritz, leaders could discuss the sources and methods of election interference and the vulnerabilities identified by security services as potential avenues of attack.

Large platforms including Google, Facebook and Twitter have undertaken measures to address the spread of false information and the use of their platforms to incite hatred of groups and even violence. These independent actions deserve the leaders’ scrutiny, and almost certainly do not go sufficiently far to satisfy the leaders or their electorates that upcoming elections are safe from outside disinformation campaigns.

VOTER REASSURANCE The challenge of defending elections from foreign interference is highly technical. At Biarritz, G7 leaders should compare what their respective governments have done to date and, as called for at Charlevoix, share best practices and use the G7 to reassure voters that they are acting to reduce interference and respond swiftly G7G20SUMMITS.ORG

As during the Cold War, within the G7 US willingness to go on the offensive makes other leaders nervous about the risks of escalation and being caught in the crossfire” and effectively when it occurs. The leaders noted at Charlevoix the importance of promoting critical thinking as part of voter education to inoculate the electorate against viral disinformation. One year later, an in-depth update on these efforts to defend electoral processes through voter participation in challenging false information would be timely.

The most controversial response to election interference has been deterrence, promoted by the United States. President Donald Trump ordered a review of US cyber defences in May 2017, which included federal, state and local government systems as well as private networks. Based partly on that review, in September 2018 Trump unleashed the US military and security agencies to develop tactics for offensive cyberattacks on foreign systems.

US cyber strategy acknowledges that the vulnerability of democratic systems is their relative openness, with a free flow of

information that can be tampered with to influence voter decisions or perceptions of the legitimacy of election outcomes.

Yet authoritarian systems have a corresponding vulnerability resulting from restrictions and controls on information and communication designed to prevent criticism of the regime. An offensive cyber operation that opens up space for dissidents and critics to communicate with each other and the public could seriously threaten authoritarian regimes.

As during the Cold War, within the G7 US willingness to go on the offensive makes other leaders nervous about the risks of escalation and being caught in the crossfire. This dynamic will return at Biarritz over deterrence to defend the integrity of electoral systems. Yet this discussion must happen among the leading technologically advanced democracies, to prove once again the value of the G7.

CHRISTOPHER SANDS

Senior research professor, Paul H. Nitze School of Advanced International Studies, Johns Hopkins University Christopher Sands is a senior research professor at the Johns Hopkins University Paul H. Nitze School of Advanced International Studies and a non-resident senior associate of the Center for Strategic and International Studies, both in Washington, DC. He represented the United States think tank and university communities at the Think 7 summit for the 2018 G7 summit in Charlevoix, Canada.

Twitter @sandsathopkins

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Cooperation for a secure Europe

Faced with the shrinking zone of democracy and continuing Russian political and military pressure, the G7 must persevere in building strategic stability in this vital region, says Aurel Braun, professor of international relations and political science, University of Toronto

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ith all the key issues to be addressed at the G7 Biarritz Summit, security concerns regarding the vast region stretching from the Baltics to the Balkans and east to Ukraine may not be the top priority. There are, however, security threats within and to the region that need to be confronted.

Just a few decades ago, what we see today would have seemed inconceivable. Most of the states in this heterogeneous region were members of the Warsaw Pact, firmly in Moscow’s grip, while Ukraine and the Baltic states of Latvia, Lithuania and Estonia appeared irredeemably part of the Soviet Union. Today, the former Warsaw Pact states and the three Baltic countries are not only members of the North Atlantic Treaty Organization, but also the European Union, and have committed themselves to a democratic political order. Other ex-Soviet republics and ex-Yugoslav republics are aspirants to these European bodies.

Yet the euphoria of 1989 and 1991 and confidence that liberal democracy would prevail proved ephemeral. The transition to democracy has turned out to be exceedingly difficult and certainly

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not irreversible. Russia, which under Boris Yeltsin seemed committed to democracy and friendship with the West, has become a military rival and, in certain respects, an ideological and cultural one.

Consequently, the G7 members – all committed democracies and, with the exception of Japan (which has a bilateral alliance with the United States), members of NATO – face two key, interconnected security problems in the region. The first relates to the shrinking zone of democracy. The second involves continuing Russian political and military pressure, which in its most virulent recent manifestation saw Moscow illegally annex Ukraine’s Crimea region.

RETRENCHMENT OF THE DEMOCRATIC ORDER In a region where for many decades people desperately longed for democracy and freedom, now there is a dangerous retrenchment in the democratic order, especially in Poland and Hungary. Anti-democratic parties are challenging or undermining the rule of law, and the populist Hungarian prime minister Viktor Orbán has expressed his preference for ‘illiberal democracy’. Corrosive and pervasive corruption is also undermining the prospects for democracy in Romania, Moldova, Ukraine and Bulgaria. In Eastern Europe, the zone of democracy is shrinking in a way that should concern the G7.

Nowhere, though, is that contraction more worrisome than in Russia itself, which relates to

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G7 members possess the power of moral suasion to help the democratic forces in this region and can back this up with unparalleled economic resources”

21.3trn

$

Estimated 2019 GDP for the US

1.61trn

$

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Estimated 2019 GDP for Russia

the second major problem. Domestic and external variables are tightly and almost inextricably intertwined in Russia. As the Putin government has increasingly centralised power, its domestic programme, predicated on a tacit trade-off between economic progress and popular political acquiescence, has been unravelling. Russia’s unidimensional economy, dependent on energy, has become stagnant and Putin’s popularity has significantly declined.

Unwilling to risk political liberalisation or true economic diversification, his government tries to compensate domestically by promoting Russian ultra-nationalism and Russian orthodox culture as an alternative to what it claims is a decadent West. This ploy in itself is inadequate unless it is continuously fuelled by external ‘successes’ as a means of boosting national pride and diverting attention from the unresolved fundamental problems at home.

It is no coincidence then that Russia probes and pokes western defences and relentlessly seeks to manipulate politics in the former Soviet states and elsewhere in Eastern Europe. Moscow has employed cyber warfare against Estonia, invaded Georgia and, in Ukraine, challenged the post–Cold War order and assaulted international law – all portrayed by Moscow as unalloyed successes.

Fortunately, the G7 has enormous soft and hard power that it can bring to bear on these problems.

First, as successful advanced democracies, G7 G7G20SUMMITS.ORG

members possess the power of moral suasion to help the democratic forces in this region and can back this up with unparalleled economic resources. G7 countries collectively produce a substantial share of global gross domestic product. The 2019 GDP estimate of $21.34 trillion for the United States contrasts sharply with Russia’s relatively minuscule GDP of $1.61 trillion.

Second, the G7 has not hesitated to condemn Russian aggression.

In November 2018, G7 foreign ministers sharply deplored Moscow’s actions in the Kerch Strait (and the capture and holding of Ukrainian sailors) and reaffirmed their “unwavering support for Ukraine’s sovereignty and territorial integrity”.

Furthermore, the G7 can indirectly also exert military pressure on Russia via NATO and through continuing economic sanctions to try to deter aggression in the region. Members of the G7 can work with states in the region (many of which have significantly increased their defence expenditures) through NATO, and also with regional groupings such as Visegrád.

None of these are painless tasks for the G7. But it may be easier to build a consensus and formulate policies that range from persuasion, using economic incentives or punishment, to forms of military deterrence, since Russia is no longer a G7 member. Perhaps paradoxically, Russia’s illegal invasion of Ukraine and annexation of Crimea, resulting in its suspension from the G8, may now also present the G7 with a renewed opportunity to help democracy and strategic stability in this vital region of the world.

AUREL BRAUN

Professor of international relationsand political science, University of Toronto Aurel Braun is a professor of international relations and political science at the University of Toronto. He is also an associate of the Davis Center at Harvard University. Between 2012 and 2015, he was a visiting professor in the Department of Government at Harvard. In 2012, he was awarded the Queen Elizabeth II Diamond Jubilee Medal for services to Canada and for academic distinction by the governor-general of Canada. His latest book is NATO-Russia Relations in the 21st Century. His forthcoming book is titled Russia, the West and Arctic Security.

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PROMOTING PEACE AND SECURITY

With the greatest threats to global peace and security today coming from East Asia, David A. Welch, university research chair, Balsillie School of International Affairs, and senior fellow, Centre for International Governance Innovation, says it’s time for the G7 to step up on security in the region

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he G7 summit began life in 1975 at Rambouillet, France, with the primary aim of promoting macroeconomic policy coordination. Since then, its agenda has broadened to include everything from soup to nuts.

International security, however, has rarely been top of mind, East Asian security still less so. The G7 has recently made commitments on security issues, with non-proliferation and terrorism featuring prominently, but in a supporting rather than leading role. It has mostly been willing to let the United Nations and various other formal or ad hoc security organs take the point position.

It is time for this to change. There are both demand-side and supply-side reasons for this.

On the demand side, the greatest threats to global peace and security today are in East Asia. In four major

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potential flashpoints, nuclear-armed countries stand on opposite sides of the issues: in Korea, on Taiwan, in the East China Sea and in the South China Sea. While tensions in the latter two have calmed lately, the former two look increasingly ominous, aggravated by lingering mutual misperceptions, with the parties entrenched on flatly incompatible positions. Most of the global community insists that North Korea denuclearise, yet the Kim regime gives every indication of believing that nuclear capability is necessary for its survival, and possibly also for its long-term ambitions on the Korean peninsula. As Xi Jinping increases pressure on Taiwan to rejoin the fold – something he seems to regard as a legacy goal – Taiwan recoils, spurred in no small measure by Beijing’s increasingly bold encroachments on Hong Kong’s autonomy. The region desperately needs a stabilising hand.

On the supply side, global security is put at risk by the erosion of post-war liberal internationalist norms that only the G7 is well positioned to defend.

The UN, G20, Association of Southeast Asian Nations and BRICS are either too weak, too divided or both.

Only the G7 has the necessary critical mass of both capability and commitment.

It is true that the post-war order is being eroded largely by the G7’s most powerful member, the United States. To some extent, therefore, the wound

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All eyes East

is self-inflicted. A stable international order needs a stabiliser, and the United States has stepped back from this traditional role. President Donald Trump’s transactional ‘Make America Great Again’ approach to foreign affairs undermines Washington’s willingness and ability to provide two crucial public goods on which the liberal international order depends: security and a market of last resort. Trump’s half-hearted, precarious commitment to the North Atlantic Treaty Organization, Asian allies and the UN – along with his rather idiosyncratic affection for hostile authoritarian rulers such as Vladimir Putin and Kim Jong-un – have called into question his judgement and his commitment, unnerving America’s allies and friends. His trade wars threaten to trigger a global contraction that, among other things, will jeopardise poorer and weaker countries’ access to the world’s largest market and make populism, authoritarianism, protectionism and bandwagoning with China more attractive alternatives.

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TEMPORARY LIMITATIONS American recalcitrance surely represents a limitation on the G7, but it is a temporary one.

Meanwhile, the remaining G7 members include the strongest, most committed supporters of the liberal international order who, in true Lilliputian fashion, can to some extent bind the wayward Gulliver until he returns to his senses. With the world’s third-largest economy and second-best navy, Japan could play the role of regional champion from a material and geographical perspective, but requires multilateral cover to avoid (unfounded) fears of revanchism. The United Kingdom is beleaguered by the ongoing Brexit fiasco, but at least it expresses the desire, and has some limited capability, to stand up for East Asian order. So does France. Canada has been attempting to be more active in regional security and has made some progress, but there is more it can do both by way of material contribution and in its traditional middle-power role. Germany and the European Union may be currently unable to play much of an active role, but they at least bring some moral authority to the table, and Italy can contribute solidarity.

What might the G7 do?

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Express a joint commitment to the San Francisco system, the territorial integrity of states and the peaceful settlement of disputes;

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Harmonise efforts to plug leaks in the North Korean sanctions regime;

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Commit to supporting regional partners in their efforts to strengthen regional security organs, the rule of law and confidencebuilding measures;

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Affirm a joint commitment to the right of the Taiwanese people to decide their own fate; and

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Establish a working group to explore how the G7 can contribute to regional peace and security.

With such steps, the G7 can bring heft and moral clarity to a region sorely in need of both.

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American recalcitrance surely represents a limitation on the G7, but it is a temporary one. The remaining G7 members include the strongest, most committed supporters of the liberal international order”

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Estimated 2019 GDP for Russia

DAVID A. WELCH

University research chair, Balsillie School of International Affairs, and senior fellow, Centre for International Governance Innovation David Welch is university research chair and a professor of political science at the University of Waterloo. He teaches at the Balsillie School of International Affairs and is a senior fellow at the Centre for International Governance Innovation. He is author of, among other books, Painful Choices: A Theory of Foreign Policy Change and Decisions, Decisions: The Art of Effective Decision-Making and co-author of Vietnam if Kennedy had Lived: Virtual JFK. Twitter @davidawelch  www.davidwelch.ca August 2019 — G7 FRANCE: THE BIARRITZ SUMMIT

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PROMOTING HEALTH

PARTNERSHIPS WITH AFRICA

G7 performance on

Africa Recent years have seen the G7 adopt a renewed inclusive format regarding Africa, which has driven higher compliance and produced clearer, more concise commitments. Brittaney Warren, director of compliance, G7 Research Group, shares the data

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rench president Emmanuel Macron chose the overarching theme of inequality for the G7 summit that he will host on 24–26 August in Biarritz. He also seeks to create a “renewed format” to enhance the G7’s inclusivity, by expanding the group to include systemically important democracies and African partners. South Africa is one of the four invited major democracies. Burkina Faso, Egypt, Senegal and Rwanda are the invited African partners, selected due to their recent or current chairing roles in African regional organisations. These countries will be engaged on sustainable development, especially jobs for youth and women, education, health, and digital and financial inclusion. France will also engage with South Africa on digitalisation, climate change, biodiversity and oceans.

How successful will this new format be for Africa? A look at the G7’s past performance on African governance provides some insight.

CONCLUSIONS The G7 first referred to Africa in 1980, dedicating 89 words in its communiqué.

In 1984, another 51 words appeared.

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Attention to Africa rose in 1985 to 244 words, beginning a second phase of a fluctuating rise in attention to Africa that peaked at 1,228 words in 1997. The third phase started in 2002, when G7 leaders dedicated a historic high of 6,711 words to Africa. Between 2002 and 2009 attention to Africa remained high, never going below 1,000 words. A fourth, weaker phase began in 2010. Of the eight summits between 2010 and 2018, just three dedicated more than 1,000 words to Africa; five had fewer, reaching as low as 361 words in 2018.

COMMITMENTS From these deliberations came 355 collective, future-oriented, politically binding commitments on Africa as identified by the G7 Research Group. In the first phase, between 1985 and 2001, the G7 made just 25 commitments on Africa.

In 2002, the start of the second phase, the number of commitments jumped to 87.

Although only three commitments were made in 2003, there were 19 in 2004 and 46 in 2005. This rollercoaster pattern continued until 2009, but never dropped below 19.

Thus the second phase, between 2002 and 2009, produced 269 commitments. However,

the third phase, between 2010 and 2018, saw another drop, as its eight summits had only 61 commitments on Africa.

COMPLIANCE The G7 Research Group has assessed 42 of the 355 commitments on Africa for compliance by G7 members and found an average of 76%, similar to the 75% average over all issues. The first assessed commitment was made at the 1997 summit, with 50% compliance, and the second was from the 2001 summit, with 100%. Between 2002 and 2007 compliance stayed between 70% and 82%. In 2008 it dropped to 63%, but then steadily rose to a high of 88% in 2017. Six months after the 2018 summit, compliance on the one assessed commitment related to Africa had 100% compliance.

CORRECTIONS To sustain and strengthen this recent high compliance, the G7 should ensure that the renewed inclusive format succeeds. It can do so by adopting the recommendations made by Africans themselves. Preliminary research by the G20 Research Group has found that in the G20, which includes G7 members and South Africa, compliance is

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PROMOTING HEALTH

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slightly higher when the leaders take the advice of the Think 20, a group of academic and other experts with in-depth knowledge in their respective fields. This resource could be applied to the G7 context, with the invited African countries and heads of African organisations considered the field experts. The Think 7 met for the first time under the 2018 presidency and met for a second time this year.

G7 leaders should adopt these recommendations in the form of clear, concise commitments. They should be selective, making fewer Africa-related

commitments but with more focus, quality and potential impact. Indeed, the six summits with the highest compliance – 87% – generated 101 commitments, and the seven summits with the lowest compliance – 67% – had almost twice as many.

Furthermore, governing with African experts rather than for Africa could open the door for reconciliation between Africa and the democratic, human rights–focused G7, some of whose members owe a historic debt to the African slaves whose forced labour was a significant source of the wealth and status that these members enjoy today.

BRITTANEY WARREN Director of compliance, G7 Research Group Brittaney Warren is director of compliance and lead researcher on climate change for the G7 Research Group, the G20 Research Group and the BRICS Research Group at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto.

She has published on accountability measures in summit commitments, the G7 and G20’s compliance and governance of climate change, and the G20’s governance of digitalisation.

She has worked in Spain and Peru and is currently working towards a master’s degree in environmental studies at York University.

Twitter @brittaneywarren ‫ ‏‬ www.g7.utoronto.ca G7G20SUMMITS.ORG

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An IMF that works for Africa Reforms are required to improve IMF governance and its performance in Africa, starting with better African representation and an end to its Euro-centric leadership, writes Daniel D. Bradlow, SARCHI professor of international development law and African economic relations, University of Pretoria and professor emeritus, American University Washington College of Law

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he International Monetary Fund has had an ongoing profound and controversial impact on Africa since the debt crises of the 1980s.

However, Africa’s participation in IMF governance is not commensurate with the scale and intensity of this impact.

Over the next year, the IMF is expected to complete its 15th review of its quota

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allocations and its work on governance reforms. This presents Africa with a rare opportunity to enhance its weak role in IMF governance. Success will require the support of the G7 members, given their oversized role in IMF governance.

This support would be most useful concerning three governance issues, none of which requires the G7 members to

compromise their positions on the complex quota issues. These are representation on the IMF board of executive directors, the public accountability of the IMF and the selection of the IMF’s managing director.

First, the G7 should actively support Africa’s call for a third sub-Saharan African seat on the IMF’s board of executive directors. Representation on the board is

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important because IMF operations and policy decisions require board approval.

Currently, the 46 countries in sub-Saharan Africa are represented by two executive directors. The fact that Africa is so poorly represented on the board is particularly troubling because African countries are arguably the most intensive consumers of IMF services.

The most feasible way to improve African representation is to establish a third African chair on the board. This will help reduce the workload of each sub-Saharan African

director so that they can more effectively advocate for African concerns at the board.

In supporting this African demand, the G7 would merely be ensuring that the IMF follows the lead of the World Bank, where sub-Saharan Africa already has a third board chair.

INCREASED ACCOUNTABILITY Second, the IMF needs to become more accountable to all its stakeholders. Given the complexity of its operations, it is unrealistic to expect that the IMF staff

46

countries in sub-Saharan Africa represented by just

2

executive directors

DANIEL D. BRADLOW SARCHI professor of international development law and Africa economic relations, University of Pretoria Daniel D. Bradlow is the SARCHI professor of international development law and African economic relations at the University of Pretoria and a professor emeritus at the American University Washington College of Law. He was previously head of the international economic relations and policy department at the South African Reserve Bank and chair of the roster of experts on the Independent Review Mechanism of the African Development Bank. He has also served on the International Law Association’s Committee on Accountability of International Organizations and as a consultant to numerous international organisations. He publishes frequently on international law and international financial institutions, international law and social change, and global economic governance.

Twitter @dannybradlow

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will always provide their member states with infallible advice and that they will have sufficient knowledge to attach the best and most effective conditions to their financial assistance. In addition, given the negotiating imbalances between a country in crisis and the IMF, it is unrealistic for the IMF staff and management to maintain that the IMF does not impose its conditionalities on its members. When many African countries approach the IMF for support they have no meaningful alternative source of financing and they are acting under such pressure that they cannot bargain effectively. Consequently, their acceptance of IMF conditions cannot be considered an act of state sovereignty in any meaningful sense.

As is the case with any powerful body in the G7, the IMF should be accountable to those that it affects for the way in which it exercises its power. This means that the IMF should create an independent accountability mechanism that can investigate complaints from communities that contend they have been disproportionately harmed by the IMF’s operations in their home countries.

The purpose of these investigations should not be to assign blame, but to prepare independent and evidence-based reports that can be used to educate all IMF stakeholders about how the IMF does business, the actual impacts of its operations and how to mitigate any unavoidable adverse impacts.

This mechanism would differ from the Independent Evaluation Office because its investigations would be initiated by outside requests from adversely affected stakeholders. As the only IMF mechanism to be triggered by affected communities, it would provide the board and management with hitherto unavailable information about its operations.

Third, the G7 should support the call from Africa and other regions to end the practice of the IMF managing director always being a European. The process should become more transparent and competitive. It is not credible to contend that the best candidates are always European or that the current arrangement is the optimal arrangement for the institution. The mere fact that the three European-selected managing directors before Christine Lagarde all failed to complete their terms and all had an ethical problem is a good indication of how flawed the process is.

These three reforms would cost the G7 little but would improve the IMF’s governance and its relations with and performance in Africa.

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G 7

Engagement with Africa requires facing up to inequalities that erode growth and development.

Elizabeth Sidiropoulos, chief executive, South African Institute for International Affairs, calls for a harmonised approach for deeper, more fruitful cooperation between the G7 and this vast continent

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ELIZABETH SIDIROPOULOS

n early July, the African Union Summit in Niamey, Chief executive, South African Institute Niger, launched the operational phase of the for International Affairs African Continental Free Trade Agreement, a project to liberalise trade and enhance industrial Elizabeth Sidiropoulos is the chief development and infrastructure. There is still a long executive of the South African Institute road ahead, but the rapid ratification and progress of International Affairs, based in on negotiations differentiate this process from earlier Johannesburg. Her research areas include economic development initiatives and illustrates South African foreign policy, global growing African agency. governance and specifically informal The continent has been a regular item on the G7’s governance clubs such as the G20 and the agenda since the Kananaskis Summit in Canada in BRICS, and the role of emerging powers in 2002. But engagement with Africa is no longer just Africa. She is the co-chair of the Think 20 about development aid. The growth potential of many Africa Standing Group, established during African countries, as well as the potential demographic the German G20 2016 presidency, which dividend, is significant. Indeed, Africa’s current child feeds into one of the task forces of the population is 580 million and is four times larger than Think 20. that of Europe. As a market of more than 1.2 billion people with a rising middle class, the continent is also Twitter @SAIIA_info  www.saiia.org.za an expanding frontier of economic opportunities.

While the continent continues to face challenges such as poverty, limited industrial capacity, violent extremism and intra-state conflict – some of these assuaged and others exacerbated by external partners – it is also often at the receiving end of children in Africa, rules that entrench global inequities. These include trade rules and arrangements 4x that of Europe's that allow unfair trading practices such as agricultural subsidies to continue child population in rich countries, or international taxation systems that enable illicit financial flows, or indeed the new inequalities that digital commerce has created regarding data, privacy and where taxes of the big tech companies, which are the major leapfrogging into more sustainable industries, while the beneficiaries, are paid. continent has launched the African Renewable Energy Inequality is the focus of the French G7 presidency this year – inequality Initiative intended to achieve 300GW of additional between rich and poor people, between rich and poor countries, and between renewable energy generation by 2030. Business and those who make the rules and those who take them. Too often the compensatory climate change need to be part of the same double helix. mechanisms for the latter are too ineffectual, are insufficient or spawn new Violent extremism and migration are two other areas problems. The rise of the digital economy has only exacerbated this, while the where cooperation is necessary and happening, but growing aversion among some G7 members to multilateral rules that apply to all its content needs to change. G7 members are active in erodes both the principle of multilateralism and its impact. counterterrorism initiatives in the Sahel particularly, Deeper cooperation between the G7 and African leaders can be fruitful in providing much-needed assistance to under-resourced several areas, specifically investment and climate change, violent extremism states. Europeans have included a developmental and migration. dimension in their cooperation, recognising the intersection between poverty and grievances that ECONOMIC OPPORTUNITY can lead to extremism. However, the overwhelming Initiatives are under way to increase economic opportunity in Africa to curb the emphasis has been on security dimensions, which have flow of economic migrants to Europe and elsewhere – from the European Union’s been insufficient to address the underlying causes. ambitious External Investment Plan to the G20’s Compact with Africa and the EU This failure has also made the response to the flows of Trust Fund. The operationalisation of the CFTA, a stronger focus on improving people seeking a better life in Europe brutal, standing connectivity, and many African countries’ commitment to develop industrial in contrast to the very human rights norms that the capacity and regional value chains provide incentives for the G7 private sector to West considers its own. In Libya – geographically the establish or ramp up its local presence on the continent. Green industrialisation springboard to the Mediterranean, but also the catalyst and renewable energy are on Africa’s agenda and some countries are for much of the deepening instability in the Sahel since 2011 – G7 members have been ambivalent in their engagements and driven by their own particular interests. A partnership of equals in this domain requires the G7 to respect United Nations resolutions relating to North Africa and the Sahel, rather than seeking to advance individual states’ geopolitical agendas. A more coordinated approach to dealing with the fallout from the western intervention in Libya, an approach that respects UN resolutions, would be a significant step forward in bringing more stability and governance to a region that has had significant consequences for the continent’s attempt to take control of its peace and development agenda.

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While the continent continues to face challenges such as poverty, limited industrial capacity, violent extremism and intra-state conflict, it is also often at the receiving end of rules that entrench global inequities”

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A STRONGER G7 SYSTEM

The risks of a renewed format The G7 must tread a fine line between being more inclusive and participatory, and upholding the group’s value and unique position in the overall global governance landscape – a necessary critical balance if the G7 is to remain relevant and effective, says Tristen Naylor, fellow in international relations, London School of Economics

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rance has declared a ‘renewed format’ for the G7, prioritising engagement with non-members. The club needs to be careful, though, not to repeat past mistakes in widening participation or undermine its role in the overall global governance landscape.

France has invited eight countries to join the G7 in Biarritz: Australia, Chile, India, South Africa, Burkina Faso, Egypt, Senegal and Rwanda, in addition to holding outreach initiatives with civil society, including the Gender Equality Advisory Council and the G7’s nine engagement groups. This brings the G7 far from France’s original design for the summit in 1975 as an intimate ‘fireside chat’ among the leaders of France, Britain, Western Germany, Italy, the United States and Japan.

Indeed, much of the club’s early history involved resisting additional participants, with only Italy and Canada making it into the group over the particular reluctance of France. Such

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reticence also marked the disputed incorporation of Russia in the 1990s and drove the push for a back-to-basics format at the 2012 Camp David Summit following years of bloated guest lists, the high watermark of which saw Italy issue 28 invitations to the 2009 L’Aquila Summit.

This pause in expanded participation did not last long – after Russia’s suspension in 2014, successive hosts again began liberally extending invitations. In 2018, Canada invited 16 non-members to the Charlevoix Summit.

This year’s summit format thus indicates the expansionary impulse with which the club has always wrestled. The reasons behind it are good: engagement helps buttress the multilateral order, keeps non-traditional issues at the top of the governance agenda and shores up legitimacy for the western-focused club.

Moreover, such a coalition is particularly critical as the international community confronts the challenges that top the G7’s agenda.

FREE AND FRANK EXCHANGE Despite just intentions and pressing needs, articulating the G7 in this way might actually create problems. First and foremost, an expanded guest list reduces the efficacy of meetings. The more people around the table, the less free-flowing conversation there tends to be. This was a central concern of the first summit host, Valéry Giscard d’Estaing, motivating him to keep the group as small as possible, and it likewise inspired smaller summits in more recent years. The intimacy of these meetings has allowed the G7 to maintain its edge since the advent of the G20, remaining a setting conducive to free and frank exchange rather than formal, prepared statements. The larger and more cumbersome the G7 process becomes, while improving its credentials as an inclusive, participatory forum, the less it can successfully operate as a driver of global governance.

The second problem is that of duplication. The world already has a

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countries attended the first summit in 1975

more inclusive, participatory informal governance forum in the G20. Three of the Biarritz invitees are G20 members (Australia, India and South Africa), Senegal is regularly invited to the G20, and Egypt and Rwanda also have sat at the G20 table. The panoply of civil society engagement groups likewise recreates

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what the G20 has already pioneered.

Third, in addition to encumbering the club, the potential effects of this arrangement are dampened by there being less incentive for invitees to participate as robustly as they otherwise would as full members, as is particularly the case for G20 members Australia, India and

TRISTEN NAYLOR Fellow in international relations, London School of Economics Tristen Naylor is a fellow in international relations at the London School of Economics and was previously the lecturer in diplomatic studies at the University of Oxford. Prior to his academic career he worked in foreign policy for the government of Canada. He is a recipient of the Canadian Public Service Award of Excellence.

Twitter @TristenNaylor

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invitations issued by Italy in 2009

16

non-members invited

by Canada in 2018

South Africa. Moreover, the initiatives that filter through engagement processes are more likely to be implemented globally via the G20, where China, Brazil, Indonesia and Russia have a stake. This is a lesson that the club ought to have learned from its ‘Outreach’ process after 2005, when China, India, Brazil, South Africa and Mexico were invited to G8 summits. That initiative was not without resentment, marking the invitees with the status of second-tier add-ons, and was unsurprisingly abandoned with the elevation of the G20 to the leaders’ level, where they sit at the table as equals.

The motivations for a more inclusive and participatory G7 are both laudable and necessary. But such expansion has the potential to undermine the club’s added value and unique position in the overall global governance landscape. Managed well, this renewed format can help keep the G7 relevant and effective; managed poorly, it could further weaken the case for there being a G7 at all.

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s France hosts this year’s G7 summit in Biarritz on the Basque coast, French president Emmanuel Macron has an ambitious vision to renew the format of the G7. At the United Nations in September 2018, Macron stressed that “the time when a club of rich countries could alone define the world’s balances is long gone”. With combating inequality as its overarching theme, France sees its G7 presidency as “an opportunity to adjust the format of the group” by involving democracies with regional influence, African partners and civil society to produce real solutions to tackle all forms of inequality.

In Biarritz, France has the opportunity to take the lead in reshaping the G7 to suit the realities of today’s international governance. This is not a new role for France. In fact, the G7 itself was created at the initiative of French president Valéry Giscard d’Estaing, who convened the first leaders’ summit in November 1975 at the Château de Rambouillet. Both as host and participant, France has been a key G7 player in three major ways: promoting

a new vision for international cooperation, making the group more inclusive and championing the natural environment.

A NEW VISION FOR INTERNATIONAL COOPERATION The 1970s ushered in an era of economic instability in the midst of Cold War tensions. The abrupt end of the Bretton Woods system in 1971 combined with the 1973 oil crisis to produce recessions in most major western economies. In 1975, at the initiative of Giscard, the leaders of France, West Germany, the United States, Italy, Japan and the United Kingdom met in a relaxed setting to respond.

Giscard structured the summit as small and informally as possible, without advisors or the press, to avoid what he saw as their constraining presence and allow for a free exchange of ideas among those with the power to implement them.

It was intended as an impromptu, never-to-be-repeated meeting in contrast to other arenas of global governance, which were characterised by a high degree of formality and

France in focus Ahead of its Biarritz Summit, Hélène Emorine, director, Paris office, G7 Research Group, considers the central role France has played in championing international cooperation for a more inclusive G7

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institutionalisation. Yet the leaders saw the summit as so valuable that it became an annual event, with Canada added in 1976 and the European Community, now the European Union, in 1977.

The 1975 Rambouillet Summit paved the way towards a new, and more informal, type of international cooperation that continues to operate more than 40 years later.

MAKING THE G7 MORE INCLUSIVE France has been a long-standing advocate for engaging with non-G7 members to make the G7 more inclusive and diverse.

As the Cold War tensions ended, at the 1989 Versailles Summit François Mitterrand invited the leaders of 10 African countries, five Latin American countries and three Asian countries, despite opposition from the United States and the United Kingdom. Similarly, at the 2003 Evian Summit, Jacques Chirac created an outreach meeting with leaders from 11 developing countries to join the G8 leaders (now that Russia was a member) not just as guests, but as participants. Evian was the first time that summit invitations included African countries. In 2008, Nicolas Sarkozy called for the G8 to be expanded to the G13 by adding China, India, Mexico, Brazil and South Africa.

The 2019 Biarritz Summit will not be limited to the G7 leaders. Macron is emphasising working with major democracies and African countries, international organisations and civil society.

CHAMPIONING ENVIRONMENTAL ISSUES While France has emphasised many topics ranging from tax avoidance to terrorism since 1975, the environment stands out in France’s contribution to the G7.

Indeed, at the conclusion of the Rambouillet Summit, the leaders collectively declared their common interest in developing alternative sources of energy. At the 1988 Toronto Summit, France insisted that environmental issues appear on the agenda, and lobbied that other G7 members, including the European Community, adhere to the Montreal Protocol. At the 2000 Okinawa Summit, France strongly advocated for the G7 to meet the Kyoto Protocol’s targets. At the 2003 Evian Summit, France prioritised action plans on water and the shrinking of

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HÉLÈNE EMORINE Director, Paris office of the G7 Research Group Hélène Emorine is the director of the Paris office of the G7 Research Group, based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She holds an MSc in global governance and diplomacy from the University of Oxford. Her research focuses on cooperation between states, non-state actors and the private sector through international and plurilateral institutions.

Twitter @heleneemorine  www.g7.utoronto.ca

the ozone layer. Since the successful negotiation of the Paris Agreement in 2015, France has consistently pushed for the G7 to reaffirm support for the agreement despite the US withdrawal.

In Biarritz, France will again champion the environment, with fighting environmental degradation as a key priority.

France aims to ensure the Paris Agreement is fully adhered to and raise funds to implement an ecological transition without leaving anyone behind.

When France hosted the first summit in 1975, the world was facing economic turbulence. Today, more than ever, the world is facing economic, political, social and ecological turbulence.

At Biarritz, France will have the opportunity to build on its contributions to the G7, channel the spirit of Rambouillet and drive further, ambitious international cooperation to address today’s challenges.

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A STRONGER G7 SYSTEM

In defence of global governance Delivering the European Union’s message of defending the rules-based order is being made harder by the political stance of some G7 members – but an agenda with multilateralism at its core is easing communication in the face of stiff resistance, writes Jan Wouters, director, Leuven Centre for Global Governance Studies, KU Leuven 126

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n the website of the European Union there is an interesting reference to the G7 Biarritz Summit. Apart from the rather obvious information that “President Donald Tusk and President Jean-Claude Juncker will represent the EU at the G7 summit”, it states that “the G7 summit will be an opportunity for the EU to defend the rules-based order and its organisations as the best approach for global governance”.

That is exactly what the European Union should do, and what it is good at.

At a traditional G7 summit there should be no real need to defend the multilateral order: G7 leaders have time and again expressed their strong support for it, and the G7 itself is an integral – albeit informal – part of such order. Why preach to the converted?

However, these are not normal times. US president Donald Trump has repeatedly attacked international organisations and his administration has been gravely violating its obligations under the World Trade Organization, as well as undercutting the functioning of its rules-based dispute settlement system. At the United Nations General Assembly in September 2018, Trump explicitly stated that “America will always choose independence and cooperation over global governance”.

But the problems go beyond Trump. The United Kingdom has a new prime minister who has shamelessly misled the British electorate about the functioning of the European Union in order to trigger Brexit, and who threatens not to pay the

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United Kingdom’s outstanding dues to the European Union. Italy is being run by a government with populist tendencies that has repeatedly been at loggerheads with EU institutions about budgetary and other previously agreed multilateral arrangements. The fact that two of the EU’s own members – G7 members – are in such a political situation makes delivering the EU’s message at the G7 complicated.

It helps, though, that France has been running a very energetic G7 presidency, with multilateralism at its core. The G7 foreign ministers’ communiqué of 6 April 2019 is littered with references to multilateral cooperation. The same applies to other documents, such as the foreign ministers’ statement on non-proliferation and disarmament.

The devil is, however, in the details.

It will probably not be too difficult to maintain generic references to multilateralism in the Biarritz outcome documents. But whether there will be clear and concrete language on respecting and safeguarding the multilateral trading system and the WTO dispute settlement mechanism, on upholding the Paris Agreement on climate change and on the nuclear agreement with Iran will be quite a different matter. The European Union should try to make the language in those outcome documents as specific as possible, even if it meets stiff resistance. The recent experience of the G20 Osaka Summit may help Juncker and Tusk to prepare for difficult negotiations in Biarritz.

ONE VOICE The European Union has already done some excellent homework: on 17 June, the Foreign Affairs Council adopted much-needed conclusions on “EU action to strengthen rules-based multilateralism”. This document is a comprehensive, detailed and up-to-date overview of how the European Union

At a traditional G7 summit there should be no real need to defend the multilateral order, but these are not normal times” intends to “[speak] with one voice in relevant international fora” to promote “a multilateral system that is rules and rights-based”.

For the EU to speak with one voice, it needs a thorough process of ex ante internal coordination with all its members on the issues on the agenda of the international forum in question. That, too, is a challenge for the Biarritz Summit.

Indeed, a key priority for the French G7 presidency – chased by the gilets jaunes at home – is tackling “increasing levels of inequality”, which it sees as “a serious threat to social cohesion and economic development to the benefit of all”. This overall goal is split into five ambitious sub-goals: “Combating inequalities of fate; reduction of environmental inequalities; promotion of fairer and more equitable trade, tax and development policies; action for peace, against security threats and terrorism; and best use of the opportunities provided by digital technology and artificial intelligence.”

It is a very bold, but righteous, agenda, which touches on myriad formal and informal governance forums, instruments and

mechanisms. It is thus a pity that the EU Council conclusions of 17 June do not focus more on the G7 and do not target these detailed goals more concretely.

The conclusions only stress, in passing, the need to “intensify cooperation with … international organisations and fora such as the G7”. On substance, they do not come much further than confirming the European Union’s commitment to “continue fostering international action on … equality, including gender equality”.

Hopefully, the European Union and its members will have been able to coordinate and prepare their positions prior to the G7 Biarritz Summit in a much more detailed manner.

JAN WOUTERS Director, Leuven Centre for Global Governance Studies, KU Leuven Jan Wouters is a professor of international law and international organisations, Jean Monnet chair ad personam EU and Global Governance, and the founding director of the Institute for International Law and the Leuven Centre for Global Governance Studies at the University of Leuven. He is a member of the Royal Academy of Belgium for Sciences and Arts and a member of counsel at Linklaters, Brussels.

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