July 4, 2025

G7 risks disappearing into oblivion

By: Azhar Azam

The Western efforts to display cohesion on global challenges collapsed after US President Donald Trump left the G7 summit in the middle and embarrassed other member states by accusing them of not offering a fair trade deal. The widening cracks imply that G7 has effectively regressed into G6 with the future of the alliance entering an uncharted territory.

G7 was originally established to cope with economic challenges but in the 1980s broadened its scope to foreign and security policy issues. In the coming years, this seismic shift aggravated conflicts and hampered peace and prosperity the world over, weighing upon credibility of an alliance whose approach was replete with risks and relevance marred by internal differences.

Beneath G7 downfall, there lies aggrandizement of threats and advancement of self-seeking interests. These narcissistic cravings drove the bloc to impose the US-led international order on the rest of the world, preventing greater involvement of major international players and shunning collaboration on pressing global challenges.

Yet once Trump returned with all his bully and bluster, its member states began to feel the pinch of venturing recklessly with Washington. As a result, they are seeking “independence” from America’s security guarantees, declaring US tariffs as “brutal and unfounded” and recalibrating ties with China to diversify their trade away from the US.

Trump’s view the European Union was formed to “screw” the US is the sequel of his first term when he launched a scathing criticism of the bloc, prodding then-German Chancellor Angela Merkel to rely less on Washington and “take our fate into our own hands.” While factors such as lack of follow-through and Trump's acrimony have the bloc’s unity to test, middle powers’ exclusion has contributed to a sharp decline in G7 international prominence.

The alliance’s waning economic heft is another rationale behind its declining significance. G7 share in global GDP on purchasing power parity, per International Monetary Fund, is set to contract from 51.8% in 1980 to 28.4% in 2025. With emerging and developing accounting for almost 61% of global economic output, the North can more stifle the rise of the Global South or strip it of its legitimate right of having a greater role in the global governance system.

In order to prevent it from fading into triviality, G7 posed itself as an inclusive organization by inviting leaders of emerging economies such as Brazil, India and South Africa that are part of the China-led BRICS, a multilateral alliance seeking to strengthen economic, political and social cooperation and increase influence of the South.

But G7 is unlikely to catch the South's attention because it for decades has denied accession to the emerging economies and remained narrowly focused on interests of a handful of advanced industrial economies. A literal exclusion of South suggests that the bloc pursues to leverage its economic relationship to achieve its own mercenary goals; its spending cuts, leaving developing countries exposed to poverty, hunger, conflicts and climate disasters, debunk its commitment with the South.

The BRICS is being accused of diminishing the role of West-dominated institutions; its long-term priorities have been to reform and strengthen these very multilateral bodies with the aim of enhancing representation of marginalized countries. The notion of a reimagined G7 to resolve the global governance crisis is doomed from the outset given it will just be an extension of an elite club, constraining the involvement of the South as a bystander. Even proponents of the concept have acknowledged the South would find a little appeal in it as they will still be excluded from the alliance.

The Western double standards are the biggest obstacle to G7 drive of tantalizing the South into its camp. For instance, the US and allies have been framing Russia’s invasion of Ukraine as a struggle for democracy, supporting its right to defend itself and its sovereignty under Article 51 of the UN Charter.

Yet when it came to Gaza and now Iran, the rich nations extended full-throated support to Israel, disregarding the latter’s violations of international law and the UN Charter. This powerful display of the Western hypocrisy – as Trump dismissed his own intelligence community’s assessment that Tehran wasn’t building nuclear weapons – would further alienate the North from the South.

The West’s violent strategy, inflated threat perception and hypocrisy on climate change – as well-heeled countries historically accounted for most of the carbon emissions but shifted the responsibility of the green transition on the South that contributed the least to triple planetary crisis of climate change, biodiversity loss and pollution yet suffered the most – have triggered resentments in the South and would continue to blight the G7 ambition of carving out developing world from China’s influence into its orbit.

For decades, G7’s delusion of grandeur has precluded it from authorizing entry of developing economies to the forum, ensuring it remains an exclusive club of wealthy-only nations. This stubbornly arrogant posture accompanying a marked propensity to spark conflicts has faced a pushback from the South, dishing out a beatdown to the alliance’s significance. The bloc is at a crossroads, ergo: mend its hypocritical approach or risk disappearing into oblivion.

*My article that first appeared in the Express Tribune

July 3, 2025

Implications of NATO's ramped-up defense spending

By: Azhar Azam

After NATO defense ministers' meeting in Brussels earlier this month, the military alliance's Secretary General Mark Rutte said that allies had agreed on "new capability targets" forming the basis for a new defense investment plan. The proposal, expected to be endorsed at the NATO summit in The Hague on June 24 and 25, will call for allies to jack up defense spending to 5 percent of GDP, including 3.5 percent on core defense and 1.5 percent on defense and security-related investment such as infrastructure and resilience.

In 2014, NATO states committed to spending 2 percent of their economic output on defense. A decade later, the coalition is again looking to take advantage of the conflicts to ramp up its military expenditure, a move that could have serious economic and social implications for member states.

By the time NATO announced that 22 of its 32 members in 2024 had hit the threshold of 2 percent, U.S. President Donald Trump stunned allies by asking them to more than double the target, or he wouldn't protect them. Several NATO countries such as Belgium, Canada, Croatia, Italy, Luxemburg, Portugal and Spain as of 2024 were yet to meet the 2 percent target while those of Albania, Bulgaria, France, Germany, Hungary, Montenegro, Netherlands, North Macedonia, Norway, Romania, Slovak Republic, Sweden and Türkiye barely matched their commitment.

The new 5 percent target could allow Trump to declare a win at the coming summit, but it is economically and politically unviable for many NATO's European partners, which are facing a myriad of economic challenges and where defense spending isn't politically popular. Defense economists have also argued that even if Europe were to grow at quite an extraordinary rate of more than 10 percent in real terms in 2024, it would take 10 years to get to 3 percent of GDP.

Allies have agreed to boost their weapon inventories. Yet, given that many European countries either lack the economic wherewithal or are experiencing sluggish growth rates, it will be difficult for them to raise defense spending without squeezing their social safety net. The GDP in the euro area and European Union (EU) last year increased by 0.9 percent and 1.1 percent, respectively and is projected to stay at those levels in 2025, making the task of meeting the target more onerous.

The new commitment will take a heavy toll on NATO economies. For instance, one percent of Germany's GDP represents 45 billion euros (more than $52 billion). That means Berlin (with 2.12 percent) in 2024 spent more than 95 billion euros on defense and will have to earmark an additional 62 billion euros annually on core defense alone. The new goal of 3.5 percent will cost the Dutch government 16-19 billion euros a year on top of the existing defense budget.

Likewise, an extra 1 percent amounts to 30 billion pounds (about $40.7 billion) for Britain. The UK welfare cuts of 4.8 billion pounds and enhanced defense spending of 2.2 billion pounds have sparked concerns among Britons, lawmakers and poverty campaigners. The demand to ratchet up defense spending – at a time when the country's independent fiscal watchdog, the Office for Budget Responsibility, has halved its economic prediction for 2025 and raised forecasts for public borrowing and inflation – could exacerbate domestic challenges for the government.

What's more, several NATO countries in Europe have high GDP-to-debt ratios. The debt of Greece, Italy, France, Belgium and Spain exceeds their economic output, which would require them to borrow more to meet the target. This will compound their economic challenges and could be risky politically over its potential to trigger spending cuts on education, health and other welfare programs especially in Croatia, Hungary, Greece, Slovakia, Czechia and Italy where a majority of people, according to NATO's own survey, want to maintain current defense spending levels.

The Trump administration's coercive tactics, as well as these factors, have propelled an urge in Europe to gradual independence from the U.S. and may drive countries to ratify the 3.5 percent target with no intention whatsoever of ever reaching the target.

Already, rifts are surfacing in the alliance about this unreasonable and counterproductive target over its potential to dampen the ambitions of the welfare states, with some questioning NATO's existence. After much inside wrangling, Spain has won the exemption; it will inspire others to emulate Madrid's path to skirt political backlash and public wrath.

Studies have also found that Europe's shift toward defense spending increases economic activity moderately in the short term but crowds out private demand and pushes the debt-to-GDP ratio higher, activating a trickle-down effect on the economy. With NATO military expenditure touching unprecedented fiscal limits, social benefits and economic growth will be chopped, adding pressure to public finances, and climate goals will face an existential threat.

In an effort to protect the U.S. military-industrial complex and prevent NATO from sleepwalking into irrelevance, the Trump administration is setting a dangerous precedent for the rest of the world. This arbitrary target would elicit a reckless arms race internationally, slow down economic recovery, impinge on societal goals and weaken climate action, leaving people in NATO countries wondering whether their governments were standing with or against them.

*My article that first appearted in CGTN