A policeman patrols past the Atomic Bomb Dome in Hiroshima just days ahead of the arrival of leaders for the G7 Leaders' Summit. AFP
A policeman patrols past the Atomic Bomb Dome in Hiroshima just days ahead of the arrival of leaders for the G7 Leaders' Summit. AFP
A policeman patrols past the Atomic Bomb Dome in Hiroshima just days ahead of the arrival of leaders for the G7 Leaders' Summit. AFP
A policeman patrols past the Atomic Bomb Dome in Hiroshima just days ahead of the arrival of leaders for the G7 Leaders' Summit. AFP

What is the G7 and which country is hosting the G7 summit 2023?


Neil Murphy
  • English
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On Friday, leaders of the G7 countries will assemble in Hiroshima, Japan, to discuss economic and geopolitical challenges.

The National takes a look back on the history of the exclusive club and its annual gathering, and looks ahead to its latest summit.

What is the G7 and which countries are in it?

The G7, or Group of Seven, is an organisation comprising the world's seven largest “advanced” economies that was formed in 1975.

Its aim was to share and form macroeconomic solutions to the economic problems of the day.

At that time the group was the G6, comprising founder members France, Germany, Italy, Japan, the UK and the US. A year later, it became the G7 when Canada was assimilated.

In 1998 the G7 became the G8 when Russia was welcomed into the fold. However, following the Russian annexation of Crimea in 2014, Moscow was indefinitely suspended and the forum reverted to the G7.

Although it is not a country, the EU attends the G7 summit.

Every year, a different country assumes presidency of the group, with Japan the current holders.

What is the G7 summit and how many have been held?

Every year since its formation the leaders of the member countries have congregated to discuss the big global events of the day. At the end of the summit a statement is issued outlining the areas of agreement. Each member country takes it in turn to host the event.

The first official summit as the G7 was held in the US in 1976, with the group having met in France a year earlier as the G6, before Canada's inclusion.

This year will mark the 49th meeting of the G7, if its time as the G6 and G8 is included too.

Which country is hosting the 2023 G7 summit, when is it, and what will be discussed?

This year, the three-day summit is being at held in Hiroshima Sports Centre from May 19 to 21.

Hiroshima, which is home to more than two million residents, was devastated by a nuclear bomb in 1945 and has since been recognised globally as a city of peace.

The choice of venue underscores a determination to put nuclear disarmament and non-proliferation at the top of the agenda of this year's summit.

Assembled leaders, including UK Prime Minister Rishi Sunak, French President Emmanuel Macron and US President Joe Biden, face some of the G7's most formidable challenges in years.

The leaders will also attempt to galvanise support for Ukraine as it attempts to retake territory lost to Russia following the invasion last year.

This year, the leaders of Australia, Brazil, Comoros, Cook Islands, India, Indonesia, South Korea and Vietnam are invited, as Japanese Prime Minister Fumio Kishida stresses the importance of reaching out to developing countries in the so-called Global South and US allies and partners.

A path to nuclear disarmament has appeared more difficult with Russia’s recent nuclear weapon threats in Ukraine, as well as nuclear and missile development by China and North Korea.

Mr Kishida on Friday will welcome arriving leaders at the Hiroshima Peace Park. He also plans to escort the leaders to the A-bomb museum, in the first group visit by heads of nuclear states. There may also be a meeting with atom bomb survivors.

Where was the 2022 G7 summit held and what was agreed?

Last year the three-day summit was held at Schloss Elmau, a castle retreat in the Bavarian Alps in Germany, from June 26 to June 28.

Germany took over the presidency of the group, six months after Angela Merkel was replaced as German chancellor by the Social Democratic Party's Olaf Scholz.

Other assembled leaders included UK prime minister Boris Johnson and Italian premier Mario Draghi, both of whom have since been replaced.

As well as the permanent G7 members, the leaders of Argentina, India, Indonesia, Senegal and South Africa were invited as guests.

Why is China not in the G7?

China has never been a member, despite its powerful economy. It is not seen as an advanced economy due to its relatively lowly wealth per capita.

Beijing last year warned G7 leaders that a “small group” of countries no longer decided the fate of the world.

WOMAN AND CHILD

Director: Saeed Roustaee

Starring: Parinaz Izadyar, Payman Maadi

Rating: 4/5

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Updated: June 20, 2023, 10:25 AM