Future of the G20
20 Major Powers Are 15 Too Many
The G20 is unable to solve the world’s problems. Time for a new approach: five major powers should take charge of the planet’s fate—including a strong Europe.
A column by Henrik Müller, author and professor for economic-political journalism at the TU Dortmund.
G20 summit in Hangzhou
When the heads of government of the major countries met for the first time, they needed just 1,100 words to state their intentions. In their communiqué, they spelled out in 15 concise points what needed to be done. Macroeconomic issues—the economy, currency fluctuations, inflation—were the main focus, along with energy supply issues. Six men, four of whom were European, with clearly defined common interests: that was the scenario at the first world economic summit at Rambouillet in November 1975.
41 years later, the situation is incomparably more complex. The communiqué for the summit at Hangzhou last week is seven times as long. It comprises 45 points, touching on practically every area of politics: not just current economic issues, but also world trade, financial stability, money laundering, tax competition, climate protection, inequality, terrorism, war, refugee flows, migration, education, research, spiraling resistance to antibiotics. That shows how much the need for global governance has increased.
On December 1 2016, Germany will take over the presidency of the G20. It is unlikely that the communiqué for the summit in Hamburg in fall 2017 will be shorter. On the contrary, the list of global problems could end up even longer in the coming year. Especially if the disintegration of the EU continues, following the Brexit referendum. When the heads of state and government of the remaining 27 EU countries met in Bratislava to reflect on the future of Europe, the huge question of who actually governs the world was also implicitly on the agenda.
In 1975, the answer was pretty clear: the two superpowers, the USA and the Soviet Union, imposed order in their respective hemispheres as they saw fit. Issues that needed dealing with between them were restricted to security matters, given that this was the Cold War era. There was hardly any exchange between the two blocs.
Even within the West, contact was limited. The US was the leader militarily, and economically dominant, although the country was already past its peak. National markets were protected by customs duties and capital controls. There were no large-scale waves of migration. Environmental problems seemed to be limited to individual regions. Nation states had a reasonably strong grip on things.
The situation now is quite different. The world is highly interconnected; the period from 1975 to 2015 saw a twenty-fold increase in the volume of world trade. The planet is also becoming more and more densely populated, with total population rising from 4 to 7.4 billion. Not only that, it is also being exploited more and more intensively; CO2 emissions have more than doubled.
Interdependencies have increased enormously. Many problems can now only be solved through joint action. Yet no one has the power to do so.
Although the major Western countries still meet in the G7 format, they can no longer achieve very much. Hopes now rest with the G20. Instead of a few Western heads of government and a handful of advisors, sessions now bring together democrats and autocrats, kings and communists. Participants also include the EU, the main international institutions and organizations as well as thousands of experts.
Many governments are under pressure at home, as dissatisfied citizens lose faith in the elites. Populists are gaining ground. They boldly promise national solutions based on isolation. These policies will ultimately fail, but in the meantime, they limit the scope for action by the Western G20 states.
Is the world beyond governing?
There seems to be a huge and growing imbalance. While autocrats, such as Vladimir Putin (parliamentary elections were held in Russia on last Sunday with Putin’s party winning) and Xi Jinping, are firmly in the saddle at home and correspondingly assertive on the international stage, the democratic regions of the world present a less impressive sight. The US is deeply divided internally. India is on a Hindu nationalist path. Brazil is mired in a deep constitutional crisis. The UK is being governed by a prime minister without an electoral mandate. Spain is facing its third parliamentary election in a year because the political elites cannot reach agreement. And those are just a few examples.
Who knows, maybe G20 president Angela Merkel, under pressure from the AfD in Germany (the AfD won seats in 10 consecutive elections of federal states), may soon have to find an accommodation with figures, such as Donald Trump (USA), Marine Le Pen (France), and Beppe Grillo (Italy). A nightmare.
Oh, and North America and Europe are not even able to reach a consensus on trade agreements. TTIP and Ceta are under threat of failure; on September 17th, more than 150,000 people protested against it in large-scale demonstration in several major German cities.
Is the world beyond governing? Is some kind of international order still possible today?
A 19th century model
As things stand, our best hope is that something like a global concert of the major powers will emerge, resembling the system in 19th century Europe, which saw the governments in London, Paris, Berlin, Vienna, and Moscow working together to resolve matters between themselves, thereby enabling a long period of stability. In similar fashion, Washington, Beijing, New Delhi, Moscow, and Brussels must jointly direct world affairs in the 21st century.
This also means that in order to prevent us all losing out, the EU needs to transform itself into a strong federal state in the wake of the Brexit shock. All the disputes that currently divide the EU member states and have resulted in them carving themselves up into factions, most recently at the EU Med summit in Athens, only obscure the fact that each country alone can achieve very little.
But there is more to it than that: It is difficult to imagine an international order without a united Europe, and certainly not any kind of order based on liberal values. As such, the EU summit at the end of this week will involve much more than quotas for refugees, investment programs, budget rules, and the future relationship with the UK. Ultimately, it is about a vision for the world. It is, of course, utopian to believe that Europe can deliver one. But Merkel should nevertheless fight for that utopia.