Moves by successive governments to implement economic rationalist policies from the 1980s period failed to stimulate meaningful economic growth. The policies followed a set line of privatisation of state industries, liberalisation and de-regulation of entire economies. While huge amounts of finance capital suddenly found its way into the developing world, the economies of the advanced, industrial countries tended to stagnate: GDP growth rates started to fall.  It has taken four decades for them to realise that the economies of the Five Eyes will not reach the bottom-line and then re-emerge as vibrant entities.

 

Easily accessible economic statistics from reliable sources, reveal the extent of the problem:

 

The growth rate of the global economy has declined from over 4 per cent in 1961 to about 3 per cent in 2019 (2).

 

Ranked in order of the 192 countries and regions whose 2019 GDP growth rates were recorded by the International Monetary Fund, the position of each of the Five Eyes countries were:

 

USA                         101st
New Zealand           113rd
Australia                   125th
Canada                     131st
UK                            134th 

 

These are hardly impressive rankings for leading world economies! (3)

 

A closer study of each of the GDP growth rates of the economies of the Five Eyes has revealed:

  US                       over 6 per cent in the mid-1980s, falling to under 3 per cent in 2018;
     
  New Zealand       8 per cent in 1971, falling to under 3 per cent in 2018;
        
  Australia              7 per cent in 1970, falling to under 3 per cent in 2018;

 

  Canada               nearly 8 per cent in the early 1960s, falling to less than 2 per cent in    2018;

 

  UK                      7 per cent in 1974, falling to under 2 per cent in 2018. (4)

Behind the economic criteria lies the growth rate of China, which has surpassed the west. China has now successfully become a competitor with the US, pushing Japan into third place in the global economy. From its second place, China is now regarded as a threat to traditional US-led hegemonic positions, particularly in the Asia-Pacific region.

 

Two important factors have to be considered:

 

Firstly, projections of the declining GDP growth rates of the Five Eyes economies show sometime in the present decade they are likely to fall to zero. Serious problems will then occur; the present COVID-19 pandemic has merely hastened a process already well under-way from much earlier. The statement from the Australian Strategic Policy Institute (ASPI) about the pandemic and how 'the crisis has made us all vulnerable to supply chains … and a lot of that has to be reconsidered' was merely an attempt at a diversion away from the real problem. (5)

 

Similar statements issued from Washington that the US economy could take a decade to fully recover from the COVID-19 pandemic problems, together with an assessment from Canberra that the Australian economy might take five years to recover, completely overlook other, more important, causal factors. (6)

 

Secondly, sometime in the next decade China will replace the US as the world's biggest economy.

 

Both developments are likely to have serious implications for the Five Eyes.

 

It is, therefore, understandable why the Trump administration has seized upon the G7 grouping as a centre for a concerted attempt to contain and encircle China, and thereby attempt to restrict its economic viability. It is significant to note the Trump administration has also planned to widen the G7 to include South Korea and Brazil, both countries with considerable strategic significance with US-led military and security provision in Asia and Latin America. (7) Other additional countries being considered for inclusion into the new G7 also include the Russian Federation and India, while China has not been invited.

 

While the economic outcome of the planned expansion of the G7 is problematic and likely to produce regional trading blocs operating with hostility toward China, it should be noted many of the developing countries ranked inside the top hundred using GDP growth criteria have stronger links with China than US-led allies.

 

With Australian Prime Minister Scott Morrison awaiting his call-up to the G7, and an inaugural meeting scheduled for September, we need an independent foreign policy!

1.     Five Eyes focus on economic pact, Australian, 8 June 2020.
2.     World Bank: GDP Growth rates.
3.     Wikipedia: GDP Growth rates, Country by Country.
4.     GDP Growth rates, Country by Country, Macro-trends/Statistica.
5.     Australian, op.cit., 8 June 2020.
6.     US economy faces a 10-year recovery, Australian, 3 June 2020; and, Five-year path to recovery, Australian, 10 June 2020.
7.     Korea accepts Trump's G7 invite, Australian, 3 June 2020.