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Global governance

Limitations of the G20

by Henning Melber

In depth

George W. Bush, China’s President Hu Jintao and the President of Mexico, Felipe Calderón, at the G8 Summit in Japan in 2008

George W. Bush, China’s President Hu Jintao and the President of Mexico, Felipe Calderón, at the G8 Summit in Japan in 2008

The 21st century is marked by a new multilateralism, with a growing number of global actors increasingly influencing the global economy. The G20 is assuming the role of the G8 but it is still not clear what it can actually achieve. By Henning Melber

The new order is questioning Western dominance, especially that of the US “superpower” that briefly held sway after the collapse of the Soviet ­Union. The EU, with its “soft power”, is also being put to the test – a test that is sapping its strength, as can be seen in the protracted conflict over Economic Partnership Agreements with the ACP countries.

The club hegemony of the G8 is a thing of the past. As long ago as 1999 and the G8 summit in Cologne, the group softened its position and agreed to a motion by Canada’s finance minister – and later prime minister – Paul Martin to invite a dozen “global South” countries to the Finance Ministers’ Meeting. Even so, the G20 did not become a semi formal institution alongside the G8 until after the global financial crisis. Now, it appears to be superseding it.

Whether the G8 will continue to exist as an internal “peer group” within the G20 is hard to say. The G8 members face the BRICSAM countries – Brazil, Russia, India, China, South Africa and Mexico – whose influence has increased considerably. Internally divided over a number of issues, the G8 could be rendered obsolete. Russia is the link – if BRICSAM were to regroup without it, the G20 would split and its chances of survival would be poor. The West has barely noticed the implicit boost to Russia so far.

If the G20 seeks to be a kind of global economic government, it will soon discover its limitations. Its legitimacy derives solely from its economic power, which is no basis for efficiently regulating global affairs – certainly no more efficiently than the 193 members of the United Nations.

The G20 is viewed with distrust as a new global economic authority. Criticism from countries of the South in particular, shows that moving tectonic plates produces minor quakes. Interestingly, the critics include Bolivia, Cuba, Nicaragua and Venezuela – an increasingly influential Latin American alliance. But there is also evidence elsewhere of the G20 not being blindly trusted by countries outside the club (Cooper/Helleiner, 2010) – just consider the Global Redesign Initiative sponsored by Qatar, Singapore and Switzerland or the formation of the Global Governance Group (3G).

African countries are virtually unrepresented in these initiatives. The continent is still excluded. But payback time is coming as international interest in and dependency upon Africa’s natural resources is growing. Geostrategic con­siderations such as securing shipping routes around the Horn of Africa are also relevant. By the 2050s, Africa is forecast to have a population of two billion – half a billion more than either India or China.

At a conference in Ontario in 2009, G20 co-founder Paul Martin warned of the risks of continuing to neglect African interests. Multilateralism needs to be more than camouflage for the pursuit of national interests, he said; the needs of those who do not sit at the G20 table also need to be considered. Doubt is justified about Martin’s words being heeded.

Haves and have-nots

Nevertheless, the G20 is the first club in which the global South enjoys representation, influence and power. That is the new global political reality. But it does not automatically mean that the interests of the South are better represented. On the contrary, there is a risk of the global South being divided into haves and have-nots. The have-nots would then have no reason to respect the climate and security policy concerns of the haves as long as these fail to take account of the right to food and to pay for the consequences of climate change. Nothing would be gained by such a new divide.

The G20 is ultimately a self-appointed global authority. If it wants to be accepted and have real credibility and legitimacy, it needs to consider global public goods and the future of all humankind. But even then there are question marks over how much policymaking should be done outside the United Nations. The UN, however, is still anchored in the bipolar world of politics that became obsolete with the end of the Cold War. This is evident, for example, in the interminable debate on the reform of the Security Council.

There are parallels between the club of five permanent Security Council members and the G20. Probably the most important is that neither really exercises its collective responsibility. As Farer/Sisk (2010) conclude, there is a case for questioning whether the G20 is any less anachronistic than the G8 or the UN Security Council. Who is authorised to take decisions of global importance? Is 20 a more convincing number than 193?

Paul Martin is aware of the significance of these questions. His support for the G20 is conditional upon the governments represented in it not playing the executive to a 193 seat UN parliament. He sees the G20 as a body that makes recommendations – recommendations that may be important but are not binding.

What is also required is a review of the concept of sovereignty in international law. The traditional notion of state sovereignty – as absolute authority within territorial boundaries – dates back to the Treaty of Westphalia in 1648. More than 350 years on, it needs to be updated to take account of duties and responsibilities in the global context. Financial markets, pollution and energy production know no boundaries and global terrorist networks remind us that national control mechanisms are now rarely effective on their own.

Globalisation can only be a success if state sovereignty is defined not only by rights but also by responsibilities. As Paul Martin also points out, however, effective global coordination does not automatically mean global government, and global institutions do not necessarily impair national sovereignty. They can actually strengthen it by helping governments to secure global public goods. The G20 needs to prove that it can and is willing to do that.

Whether it measures up to the task remains to be seen. But expanding ­­the G8 to the G20 could have another positive effect. The countries excluded from the higher echelon could try to strengthen the UN, including its General Assembly and special summits, and make it a more effective institution. That would be an unintended but welcome consequence.