Opinion The G Zero
During the Cold War,the world was G2 though no one used that expression.
During the Cold War,the world was G2 though no one used that expression. Then when the USSR imploded,we had a problem of US hegemony. That was G1. Many commentators wished for a multi-polar world in which many powers would work together and not just be bullied by the US.
Of course,the issue is that the US cannot bully the UNSC-P5 and stir it into action. So the developed countries invented the G5 in the 1970s. Later,we had G7 with Canada and Italy for reasons hard to fathom. Then the USSR got in during its sunset years. The G8 leaders were just a gathering full of hot air but the G8 Finance Ministers remain a powerful and effective body when work has to be done. This is why after the Asian crisis of 1997,we had the G20 with many more developing countries finance ministers attending.
But then during the post-Lehman Brothers crisis,French President Nicolas Sarkozy persuaded then US President George Bush to convene G20 for the leaders and not just finance ministers. So this is why we have just had a G20 meeting in Cannes. But the crisis has shown that far from being a world of G1 or even G2 with the US and China as the great powers,no one seems to be in charge. The world is flat without any tall peaks. US President Barack Obama has been made impotent by the US Congress which would refuse to give him a penny even if it came to saving capitalism. The Eurozone being in trouble,France and Germany are beleaguered and Spain is equally fragile. The British cannot decide whether to rejoice at the difficulty of the Euro or to worry but they wont shell out a penny for the rescue.
Hopes were pinned on China to rescue the Eurozone. After two centuries of treating the Chinese with contempt within their port cities,here are European ex-imperial powers acting as if all is forgotten and they have always loved the Chinese. Will the Chinese give them a few hundred billion dollars and no questions asked?
The Chinese are not proving particularly helpful. Even if they felt generous,the EU has behaved so badly in managing its financial affairs that to give money to that lot without guarantees would be foolhardy. The BRIC countries are being extolled as the new heroes in town only because it serves the purpose of the old G7 to flatter them and beg some money off them.
This is then a world in which neither the G1 will help nor will the second great G will. Welcome to a multi-polar world in which there are no tall leaders who can guide the rest. That sort of world requires democratic procedures to arrive at consensus and that takes time. You cannot urgently devise rules for burden sharing,especially if the rich are the beggars and the poor countries are supposed to be bearing the burden.
The G20 has not been much of a success in the four years they have been meeting. In London,Gordon Brown pretended that the G20 had rustled up a $1trillion recovery package but he was only adding up what had already been committed. He had a habit of doing that all the time,reinventing old packages as new. But even so,that was the high point. No other summit has made any impact. The US and China still quarrel about the RMB undervaluation and no solution was found to that problem at Seoul. Nor to the problem of global imbalancesaka the battle between China and US about trade deficits. It is unlikely that a new growth strategy will be launched.
India has a small but important role. It has never had great power pretensions and is a small player in terms of its forex balances. So it can play the internationalist and get the G20 to behave themselves in a rule-bound way. Let the IMF be strengthened and put in charge of the Eurozone and any other future rescues. It botched the job in 1997 when Asian crisis took place but that was because of European arrogance. Now that the shoe is on the other foot,we need not rub it in. Let the IMF become the heart of the G20 in economic matters. The rest will be easy.
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