Business is booming.

The G20 has flaws but the world still needs it

Receive free Chinese politics & policy updates

In the dark days of April 2009, the G20 summit became a turning point in the global financial crisis. Leaders agreed on joint initiatives and measures worth $1.1tn to boost trade and bolster struggling economies. The group of 19 big developed and developing markets and the EU was hailed as a forum for economic co-operation that could supplant the western-dominated G8.

Reality has fallen short of that vision. The fracturing of the multilateral system, growing US-China tensions and Russia’s invasion of Ukraine have sapped the G20 even as the need for it has grown. There is little surprise that Russia’s Vladimir Putin will be absent from this year’s annual summit, in New Delhi, for the second year running. But China’s Xi Jinping is staying away for the first time. And widening divisions over the Ukraine war mean the event may also fail, as it never has before, to agree a joint communiqué — posing questions over the G20’s prospects.

That will not prevent progress in some areas. Championed by India’s prime minister Narendra Modi, the African Union is expected to become a G20 member, expanding the voice of the developing world. This is despite disquiet in some quarters that admitting such a disparate organisation could make the G20 unwieldy. Important work has been done under the Indian presidency on reform of multilateral development banks, climate finance and developing country debt.

Even if the summit does manage to agree on a joint text, it will almost certainly involve watering down the already nuanced language on Russia’s aggression in Ukraine agreed at last year’s Bali summit. Modi had hoped to import the same wording, but the fact some developing countries are balking — accusing the west of escalating the conflict by arming Ukraine — highlights the depths of the G20 divide.

What happens in Ukraine and Russia will determine, to some extent, whether the group can be revivified. So will the attitude of China. Officials suggest Xi’s absence this year reflects Beijing’s rivalry and a bitter border dispute with New Delhi, rather than any long-term move to distance itself from the group. India’s attempts to cast itself as a leader of the developing world have irked China, which aspires to the same role. Xi has little wish to share the spotlight with Modi, who has seized on the G20 presidency as an opportunity to promote his country, and himself.

Xi’s non-appearance, though, comes just weeks after China led a push to expand the Brics group of emerging economies to include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. There is a danger of bifurcation between the wealthy democracies of what is again the G7 — after Russia was ejected for annexing Crimea — and an enlarged Brics that has little in common save an ambition to reshape the US-led order.

The absence of China’s president opens space, too, for Joe Biden of the US and other western leaders to demonstrate their own commitment to support, and heed, the developing world. It is an opportunity they should seize.

Yet China and India share a desire to revamp global political and financial governance to make it more representative of emerging economies — and reform of the postwar Bretton Woods institutions is overdue. It is in China’s interest, as much as in India’s, to try to achieve its aims by engaging constructively in a gathering with the US and other big developed economies, rather than through an anti-western bloc.

In an era of new superpower rivalries and the existential threat of climate change, it is in the global interest, too, for leaders of large but often antagonistic economies to sit down for “jaw-jaw”. The G20 has many flaws and inadequacies. But, aside from the dysfunctional UN, it is the best forum we have.

Source link

Comments are closed, but trackbacks and pingbacks are open.