An obsolete club for the global great and good

Last weekend thousands marched through the streets of Lyons, where the annual G7 summit gets going today, to protest. They demanded that "other voices" be heard. G7 was denounced as "a coven of ultra-liberal free marketeers who want to cut back welfare and bring down salaries". On this, at least, the marching radicals were plumb wrong. Genuine free marketeers wouldn't be seen anywhere near a gathering partly created to interfere with trade (in drugs, arms and various other undesirable products) and to manipulate markets. But on the first count, the demonstrators had a point. Who do these elite summiteers represent? Who's missing? What are their conduits both to restive domestic populations - some growing dangerously suspicious of international co-operation - and to the unrepresented Group of 100, that is to say the rest of the world? The truth is that G7 has become an anachronistic grouping of the global great and good. It is no longer even much of an excuse for junketing. On Bill Clinton and John ''motorway caff'' Major, Paul Bocuse's culinary skills will go to waste. Jean Chretien, the Canadian premier, might appreciate the cooking, but what on earth is Canada doing at a summit of what are reputedly the world's seven biggest economies ?

Which is not to object to summitry. On the contrary, it daily becomes more vital for national leaders to make the effort to semi-train economic globalisation and the myriad "forces" at work in the world by building structures of co-operative work between nations and global regions. Membership of international bodies will always form a variable geometry: some overlaps will be untidy. But the G7 problem is different and acute. Those Lyons demonstrators were right, albeit for the wrong reason: the very existence of G7 sends the wrong signals.

The Group of Seven Industrialised Nations was a step-child of that period after the collapse of the Bretton Woods agreement when the international monetary regime was stitched together in ad hoc meetings of the big trading nations which took place in New York hotels or French palaces. (The frequency with which France plays host to summits is a tribute to French diplomatic determination not just to sit at the top table but to ensure the table itself is made of Cevennes oak. It is also a manifestation of the problem. Sooner or later the French, as indeed the British and indeed the rest of the world, have to recognise that the Seven Years' War is over and France is nowadays a power of the second rank.) Then, the Plaza and Louvre accords served their purpose. The 1970s oil shock was, eventually, absorbed.

In the 1980s, by contrast, the G7 created itself as a macroeconomic talking shop which took on airs - and Lady Thatcher's lust for global recognition did not help. Meetings became occasions for pretending the global economy was under political management or that some single "solution" existed for a problem, such as unemployment or structural rigidity, that is itself plural. Or they became - as Lyons may become - mere opportunities for electorally needy US presidents to offer domestic audiences examples of leadership in action.

Meanwhile the world continued to change. Government and Opposition here in Britain may argue till the cows come home about the UK's position in the league tables for competitiveness, investment, income growth. Yet most observers would agree that, as the century turns, the British economy is no longer one of the seven biggest, measured in absolute size. According to the OECD the top seven after the United States now are China, Japan, Germany, India, France and Italy; the UK is eighth, with Russia and Brazil bustling up ninth and tenth. It will not be long before Indonesia and Thailand are knocking at the door - and a good thing, too, if their heterodox experience of growth subverts conventional wisdoms.

If one takes the view that much conversation in international forums is fairly empty , it would be unfair to single out this club. But G7 has a special slant. Its existence risks slowing a process of intellectual adjustment through which the leaders and the people of the Western democracies must come to see the new world for what it is - a world much more Asian and Pacific than that which gave birth to Keynes, Cold War and the sundry committees of inquiry chaired by Helmut Schmidt.

For countries such as the UK and France, with their disproportionate military might and all their historical baggage, adjustment is even harder. Membership of G7 discourages our adaptation while blocking the diplomatic space that ought to be opened up to new powers. "Diplomatic" is of course no longer an adequate description of a terrain which covers trade, aid, armaments, regional insecurities and our (Western) claim to police universal rights, even inside the boundaries of strong states.

According to a Treasury paper leaked earlier this month, the UK ought to back reform of the international organisations as a way of retaining any sort of influence. It is a strong argument which applies as much to the question of our Security Council seat. A rational audit of the UK's needs would pose radical questions about a score of memberships - from the UN to workhorses such as the International Monetary Fund and the World Bank, to the Commonwealth and the Organisation for Economic Co-operation and Development.

But let's start, today, with Lyons and suggest bluntly that the G7 serves no useful purpose. President Clinton comes to Lyons trailing terrorism as his theme - it would hard not to in the wake of the Dhahran bomb. There is an American agenda, embracing trade with the betes noires of Libya, Iran and Cuba. There are questions of aid and indebtedness. And yes, these are hard questions, multilateral questions. It is just that G7 is so obviously not the place to begin to resolve them.