48th Group of Seven (G7) Summit

In News

• The “2022 Resilient Democracies Statement” was signed after the Prime Minister attended a 48th summit of the G7 countries.
  • The statement called for “guarding the freedom, independence and diversity of civil society actors” and “protecting the freedom of expression and opinion online and offline”.
  • Germany holds the presidency of the G7 in 2022. The German Presidency has invited Argentina, India, Indonesia, Senegal and South Africa to the G7 Summit.

Major outcomes of the summit

• Defending the principles and are resolved to:
  • Protecting the freedom of expression and opinion online and offline
  • Ensuring an open, free, global, interoperable, reliable and secure internet.
  • Increasing the cyber resilience of digital infrastructure
  • Countering hybrid threats, in particular information manipulation and interference, including disinformation.
  • Cooperating to counter information manipulation, promote accurate information, and advocate for our shared democratic values worldwide.
  • Promoting affordable access to diverse sources of reliable and trustworthy information and data, online and offline, including through a multi-stakeholder approach
  • Enhancing transparency about the actions of online platforms to combat violent, extremist and inciting content online.
• Ban on imports of Russian gold: 
  • The leaders agreed on a ban on imports of Russian gold and to step up aid to countries hit with food shortages by the blockade on Ukraine grain shipments through the Black Sea.
• Blocking Russian oil imports: 
  • The U.S. has already blocked Russian oil imports, which were small in any case.
  • The EU has decided to impose a ban on the 90% of Russian oil that comes by sea, but that does not take effect until the end of the year.
• Climate club: 
  • Group also pledged to create a new climate club for nations that want to take more ambitious action to tackle global warming.
  • Countries that join the club agree on tougher measures to reduce greenhouse gas emissions with the aim of keeping global temperatures from rising more than 1.5 Celsius this century compared with pre-industrial times.
• Build Back Better World initiative: 
  • G-7 leaders announced a revival of the Build Back Better World initiative, a program aimed at countering China’s infrastructure investments through its Belt and Road Initiative.
• Partnership for Global Infrastructure and Investment (PGII): 
  • G7 announced the collective mobilization of 600 billion dollars by 2027 under Partnership for Global Infrastructure and Investment (PGII) to deliver “game-changing” and “transparent” infrastructure projects to developing and middle-income countries.
• LiFE Campaign:
  • The Indian Prime Minister highlighted the Global Initiative for LiFE (Lifestyle for Environment) campaign.
  • The goal of this campaign is to encourage an eco-friendly lifestyle.

Issues cited by G7 countries

• Russia’s income from oil sales is financing its invasion of Ukraine.
• High prices: High energy prices are a big problem for G-7 countries consumers.
• Higher global oil prices have softened the blow to Russia’s income even as Western traders shun Russian oil.
• Essential goods: West has become fatigued by the cost of a war that is contributing to soaring energy costs and price hikes on essential goods around the globe.
• Gold: The US says Russia has used gold to support its currency as a way to circumvent the impact of sanctions.
  • One way to do that is by swapping gold for a more liquid foreign exchange that is not subject to current sanctions.
  • Russia will still be able to sell gold to other countries outside the Group of Seven jurisdiction.  

Impact on Russia

• Isolate Russia economically: The gold import ban is meant to isolate Russia economically, starve its funding arm and prevent money laundering.
• Hit on funding: As western experts claim that the war in Ukraine is funded by Oil refiners in Russia, this move will hit on the war funding.
• Russia is now under severe sanctions: The country’s richest have rushed to convert their assets into gold to avoid the impact of the financial restrictions.

Impacts on India

• Inflation and crude prices:
  • Further ban could lead to rising oil prices, further posing risk to India’s rising inflation.
  • India imports more than 80 per cent of its oil requirement, but the share of oil imports in its total imports is around 25 per cent.
  • Rising oil prices will also impact the current account deficit (the difference between the values of goods and services imported and exported).
• India’s diplomatic dilemma:
  • Because of India’s strategic ties with Russia and its dependence on Russia for military supplies 60 to 70 per cent of India’s military hardware is of Russian-origin.
• Impact on Indian exports:
  • Russia is India’s 25th largest trading partner with exports of $2.5 billion and imports of $6.9 billion.
  • India’s key exports to Russia include mobile phones and pharmaceuticals while India’s key imports from Russia are crude oil, coal and diamonds. Tea is a major export item from India.
• Clean Energy: Clean energy provides a variety of environmental and economic benefits, including a reduction in air pollution.
  • A diverse clean energy supply also reduces the dependence on imported fuels.
  • Renewable clean energy also has inherent cost savings, as there is no need to extract and transport fuels, such as with oil or coal, as the resources replenish themselves naturally.
• Statement on international order:
  • The statement assumes significance amidst aggressive moves by China in the strategic Indo-Pacific region as well as Russia’s invasion of Ukraine.
  • India, the US and several other world powers have been talking about the need to ensure a free, open and thriving Indo-Pacific in the backdrop of China’s aggressive military manoeuvring in the region.
  • China also claims nearly all of the disputed South China Sea, though Taiwan, the Philippines, Brunei, Malaysia and Vietnam all claim parts of it. 
    • Beijing has built artificial islands and military installations in the South China Sea.

Source: TH