Commentary RESEARCH

G20 and a new era of multi-polarity


2017-07-14 12:00

Sabena Siddiqi

Bridging the gap between developed and developing countries, the G20 Group encompasses 85 percent of the world economy. Elevated to a summit level after the 2008 global financial crisis, it has become a platform for diverse voices to be heard on global economic governance.

Significantly larger than the G8, this year’s theme was “Shaping an inter-connected world” and the conference closed with commitments to fight protectionism, limit unfair trade practices and focus on opening markets and a non-discriminatory approaches.

Calling on G20 member countries to champion an open world economy and a multilateral trade regime, Chinese President Xi Jinping was of the view that global growth remained unsteady despite signs of recovery.

Emphasizing the role of innovation and development in boosting global growth, President Xi proposed increased cooperation in the digital economy, a new industrial revolution and the joint development of new technologies and industries. Discouraging protectionism, he went on to say, “We must remain committed to openness and mutual benefit for all so as to increase the size of the global economic pie.”

Endorsing sustainable development, he said, "Another source of growth derives from making greater efforts to address the issue of development and implement the 2030 Agenda for Sustainable Development, and such efforts will both benefit developing countries and generate business and investment opportunities for developed countries. In other words, this will be a win-win game for all.” Contributing to more than 30 percent of global growth in recent years, China has been a major stabilizer and driver of the world economy.

Over the years, the G20 has broadened its agenda and climate change, development policy, labor markets and employment policy, digital technology and even counter-terrorism have come under its present ambit as opposed to its previous sole focus on global economic growth, international trade and financial market regulation.

Held in Germany this year, it was an ideal opportunity for Angela Merkel to put forward her vision for global development. Primarily, Germany’s goal was to safeguard free trade as its trade surplus has crossed more than 8 percent of its GDP in this age of born-again protectionism as introduced by President Trump.

For this purpose, Germany’s best ally turned out to be China as both powers see eye to eye on the climate deal as well as free trade, a cost sharing arrangement involving China on the climate deal was particularly on the agenda as the developed world was on the back-foot regarding this issue since the U.S. withdrew from the agreement. Germany also wanted to influence meaningful decisions on issues like migration and refugee flows as well as counter-terrorism on a global level.

Differing from the U.S. on major issues would have been unthinkable in the past, but Germany took a determined stance and lobbied for support; the power balance had never been as multi-polar as it was this year. Significantly, the G20 summit was the largest multilateral diplomatic event after the Belt and Road Forum in Beijing and towards the closing of the proceedings, China and Germany could be perceived as being on the same page as promoters of multi-polarity.

U.S. influence was greatly diminished and a far cry from its unquestioned global leadership of the past. Lately, the U.S. “America First” policy was a symbolic return to protectionism. Walking out of the climate change deal isolated President Trump. Understandably, it became an uphill task for German negotiators to deliver a final summit statement giving the impression of unity as the main participants did not reach consensus on some issues.

Heralding in multi-polarity, this G20 Summit ended on a ponderous note with member countries wondering whether they should continue to look to the U.S. for global leadership or branch out.

Finally, the U.S., China, Russia and Germany dominated the summit proceedings and led the way. Increasingly erratic, this new power balance was aptly defined by Angela Merkel when she mentioned a “period of unrest in the world” and the need to make things “somewhat quieter.” Firmly, Merkel is of the view that, “anyone who believes that the problems of this world can be solved with isolationism and protectionism is making a terrible error.”

Citing an example, the signing of a free trade deal between Japan and the EU is a sign that the free trading world will work around the restrictions but not embrace protectionism any more.

The author is a geopolitical analyst at think tank Katehon, Pakistan.



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