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Editorial

Discussing dissent

by Hans Dembowski
Media workers in front of video screens in Seoul in November

Media workers in front of video screens in Seoul in November

It all began quite promisingly in very difficult times. The global economy was at the brink of collapse after Lehman Brothers, the New York-based investment bank, failed amid bizarre and dysfunctional speculation schemes that poisoned the financial sector internationally. It looked like aggregate demand would grind to a halt all over the world. And it seemed obvious that international coordination was needed to reform banking.

In that setting, US President George W. Bush invited the leaders of the most important economies to a summit in Washington following the pattern of the well-established G8 meetings. This time, however, the leaders of Brazil, Mexico, China, India and Indonesia took part. These are countries where hundreds of millions of very poor people struggle to make ends meet.

In the beginning, the G20 looked united. The leaders agreed on stimulus programmes to spur demand, opted for bank bailouts and promised to refrain from protectionism. Harmony was short-lived, however. Today, they openly disagree on exchange rates, trade imbalances and other issues of global relevance. An equally worrisome trend is that many G20 leaders are constrained in their ability to act. US President Barack Obama is struggling with resurgent Republicans who blatantly refuse to assume international responsibility. They deny climate change altogether and refuse to even consider higher taxes for the very rich in spite of pretending, in public, to be obsessed with balanced budgets (which was not their priority while Bush was in office).

Europe is busy with its own affairs. The euro was supposed to speed up economic convergence within the EU – but in practice, monetary union exacerbated trade imbalances between nations that predominantly export or import. When D+C/E+Z went to press before Christmas, the sovereign debt problems of Irleand, Portugal, Spain and even Italy were making headlines. India’s government was stuck in a huge corruption scandal. And though Chinese leaders look increasingly self-confident and even proud on the world stage, they are terrified that social unrest might undermine their power should the country’s rapid economic growth slow down.

The G20 is currently not the control room of world affairs. It looks more like a stage for actors who want to demonstrate their relevance to their own ­people at home. Fears of a global economic depression have gone by, and the G20’s ability to define common goals and programmes has been eroded accordingly. What a pity. Humankind needs coordination and harmonisation in many fields of policy. Migration, taxes and development are but three catchwords that come to mind. The G20, moreover, is also the club of all major carbon emitters. In principle, they could solve the problem of global warming on their own – if only they had the will.

A divided G20, however, is preferable to no G20 at all. It is better to discuss dissent and paper it over with cooperation rhetoric than to stop talking and resort to protectionist or even violent means. But in the long run, talking won’t do. Humankind needs substantial action.

Hans Dembowski