What is robbing the G20 of its essence

The fourteenth summit of the Group of Twenty (G20) major economies in Osaka, Japan, on June 28-29 revealed more discord and weakness than unity and strength in the global governance architecture.G20 summits are meant to underline international problems and address them through policy coordination and guidance from the highest political level of heads of state and government. But as member countries diverge sharply on core issues, this unique institution risks losing the relevance it earned in the initial years following the 2008 global economic crisis.Today’s G20 is a pale shadow of what it used to be because everyone knows what the big challenges affecting the world are and, yet, consensus for collective action eludes.The Osaka summit’s top two themes were to spur growth in the slowing global economy and promote freer trade and investment. But in the wake of relentless trade wars between the US and multiple countries which are threatening growth prospects around the world, the G20 has not managed to convince member states to spurn protectionism.Condemning protectionism had been a unanimous default position of G20 summits until US President Donald Trump’s advent in 2017. But since then, the group’s shared belief in the principle of free trade has eroded.Trump is leading the charge of narrow national interest-based policymaking without consideration for the wellbeing of the broader interests of other countries. Like a domino effect, once the US erected tariff barriers in the name of “America First”, others had no option but to retaliate and we are now caught in a downward spiral.The World Trade Organisation (WTO), whose own future has been clouded by American scepticism and the declining spirit of multilateral cooperation, has trimmed its global trade growth forecast to 2.6% in 2019, compared with 3% in 2018. At Osaka, concerned leaders like Prime Minister Narendra Modi explicitly named protectionism and unilateral tendencies as negative trends that must be reversed. But the group as a whole has failed to implement measures to remove trade and investment barriers.Trump is not the only spoiler. Part of the paralysis has to do with the fading of a sense of crisis and urgency which compelled all G20 members to set aside selfish behaviour and save the global economy after the 2008 crash. The willingness to adjust and make concessions for other countries has dimmed. Nationalism is indeed trumping globalism.Another central priority on which the G20 has fragmented into a motley gathering lacking in cohesion is climate change. The Osaka summit did name it on paper as a sub-theme.But, again, consensus and a concrete push are missing. Scientific evidence that greenhouse gas emissions are not being cut adequately should have roused the entire G20 to issue decisive commands to combat this ongoing emergency. But Trump’s denial of the crisis and the drying up of climate finance funding from developed to developing nations to transition to green technology are terrible omens. The environmental commons could be battered far worse in times to come.Energy supplies and renewables have always been on the formal agenda of G20 summits. Osaka was no different. Leaders of large energy importing countries like India expressed alarm about war between the US and Iran and its impact on oil markets. Modi told Trump in their bilateral at Osaka that peace and stability in the Persian Gulf region was in “India’s fundamental interest”. The G20 host Japan even pitched in as a mediator between the US and Iran.But the American crusade against Iran is driven by domestic politics within the US. Trump is also happily peddling American shale oil as a substitute to Iranian crude, thereby advancing market share for US energy companies. Naked pursuit of domestic interests rather than the welfare of the international community is robbing the G20 of its essence.A striking aspect of the Osaka summit was the forceful articulation of the age-old conflict between “Global South” and “Global North”.“Minilaterals” on the sidelines of the main summit insisted on the centrality of a developmentcentric course where the special needs and interests of poorer nations are respected. For example, the sub-group of Russia, India and China (RIC) batted for a “rule-based trading system” and appealed to “maintain the trend of globalisation”.In the Brazil, Russia, India, China and South Africa (BRICS) informal, Modi criticised “one-sided decisions” roiling the global economy and demanded “all-inclusive” development with lessened inequalities.Besides the classic “North versus South” fault line, “North against North” rifts are also undermining the G20. Some liberal European leaders continue to be aghast by Trump’s populism. “Trans-Atlanticism” has hit rock bottom. But inside Europe, there is a pro-Trump far-right camp, which is defying liberal leaderships in France and Germany.Labelling the G20 a broken family or a Tower of Babel is no exaggeration. Its grand mandate of steering the world economy will remain aspirational until it gets its own house in order. Given the illiberal political winds blowing across the horizon, expecting a multilateral revival is wishful.

from Economic Times https://ift.tt/2IYkUxc