Financial Post G7 Record

[ Help | Search |   Year |  Country |  Subject |  G7 Centre ]
[Financial Post G7 Record]

Financial Post, Weekly edition, Tue 09 Mar 93, page 18. Editorial.

Keywords: Magazines Economic conditions Reports Statistics Spain Canada Economist Group of Seven European Community

Canada belongs at summit table

The Economist magazine last week mischievously suggested Spain should pull the seat out from under Canada at the G-7 table.

This comes from the same group who, in a ranking of 50 nations a few years back, rated no country more boring than Canada. Well, we must point out to the editors of the distinguished magazine and those who have given currency to the G-7 suggestion, that The Economist missed the mark again. There's more to being a member of the Group of Seven industrialized nations than a country's gross domestic product.

The Economist argues the G-7 is supposed to be made up of the ''seven biggest economies'' and points out that based on OECD provisional figures, Spain beats Canada's 1992 GDP of $567 billion with a GDP of $585 billion. Yet at the same time, it recognizes it might be ''misleading'' to convert GDPs into dollars at market exchange rates. So why bother?

The Economist concedes that using purchasing power parities as a measure, our economy is still 4% bigger than Spain's. But then it goes on to argue that if Spain added its ''black economy'' (possibly 20%-30% of GDP) it would come ''comfortably ahead of Canada.'' So the logic here is that the G-7 should reward Spain for its flourishing underground economy?

Furthermore, it can be argued that Spain already has a seat. In spite of its name, the G-7 is really a G-8. In 1977 the exclusive ''club'' closed its doors to any future aspirants after admitting the European Community (to which Spain belongs). This further tipped the balance in Europe's favor, with five out of eight summiteers representing Europe's interests.

So if the G-7 needs any new members, it should be a member to offset the European bias. Former U.S president Ronald Reagan probably had that in mind when he tried to bring Australia into the fold to no avail.

The Economist somehow also overlooked that Canada is still a nation that gives foreign aid. Spain effectively is a recipient of it. In what can be compared to the equalization payments Canadian provinces receive, the EC dishes out funds to Spain regularly.

Just last week, Spain's socialist government put forward a US$2.52-billion emergency economic package. Madrid hopes the EC will fund 80% of the package. Must be nice. Meanwhile, last month, the Conference Board of Canada predicted Canada would lead the G-7 with 3.2% growth this year.

Canada has other claims to its participation in a summit process that has expanded beyond a mere economic focus. As an active member of the Organization of American States, the Commonwealth, la Francophonie and the North American free trade agreement, we bring a special dimension to summit deliberations. And we're a major global security power thanks to our peacekeeping efforts.

Nice try, guys, but a Spain-for-Canada shuffle doesn't cut it.

This information is provided by the Financial Post.
Please send comments to:
Revised: June 3, 1995

All contents copyright ©, Financial Post. All rights reserved.