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Tag Archives | New World Order

The G-20 Report Card

 The G-20 proved successful as a exigent mechanism post the 2008 Financial Crisis but hasn’t been able to provide solutions to global issues. The 2016 Summit in September will show if the grouping will become yet another defunct multilateral forum or if it can revitalise decisionmaking in the international system.

By Hamsini Hariharan (@HamsiniH)

In the aftermath of the 2008 Financial Crisis, the G-20 was thought to be the most effective institutional response to the crisis. Since then, the multilateral forum has been struggling to stay relevant to the changing geopolitics. Delivering more structural, longer-term solutions to create a more balanced global economy requires more far-reaching actions at domestic level, often needing the approval of national parliaments, which effectively makes advancing the G-20 agenda more difficult.[1] Since 2008, economic changes have been rapid and unpredictable. The Chinese reminbi was admitted into the SDR basket of currencies in 2015 but the Chinese economy in the same year went through a number of shocks and had to devalue its currency. Thus, China which hosting the 2016 Summit, faces a completely different context from the earlier years because of its own economic problems. The Summit, to be held in September 2016 will show if the grouping will become yet another defunct multilateral forum or if it can revitalise decisionmaking in the international system.

The G-20 is an interesting group for analysis on three different levels: On one hand, it shows the wrangling of the US which has been declining in stature in the international system, unable to cope with the pressures of the system unilaterally. On the other hand, it also sees the diplomatic maneuvering of China on an ascent, keen to reform the international system in its favour. The third level sees middle power countries around the world that are pushing for their own national interests as well as the agenda of developing countries.

The Group of Twenty was initiated in 1999 as a response to the Asian Financial Crisis on the suggestion of the G7: “the commitment to work together to establish an informal mechanism for dialogue among systemically important countries, within the framework of the Bretton Woods institutional system”.  The 2008 financial crisis exposed the fault lines in the global economic system particularly excessive bank credit, build up of private consumption based on uncollaterised loans and an inexorable rise in public debt. The group emerged partly as a result of political pressure on world leaders to ‘do something’ about the global financial crisis.  But it also was a response to the absence of international institutions where international coordination could take place quickly along a broad range of policy instruments.

The G 20 in the short term has achieved a status of one of the most important exigency contingents that allows for consensus building amongst powers of differing capabilities.  In the medium term, the G-20 could reflect and (possibly even help manage) a major reorientation in the relative standing of the world’s major powers.

The G-20 was envisioned as a forum to deal with financial crises beyond the capacity of advanced Western states. However, it has been transformed into an arena for world politics to be played out. Different forces of agenda setting have been played out within the G 20. For one, an America reeling from the impact of the 2008 Financial Crisis, initially set the agenda of the G-20 as the primary mechanism for crises management. However, the US has not been able to dictate processes or outcomes of the G-20.

China, as the rising power and expectant challenger to the power of the US, briefly aligned with the US. This led to fears of the two most powerful actors combining strategies to jointly dictate the agenda. However, China did not follow through with any sort of G 2 arrangement citing domestic concerns. G-20 is also the battlefield for developed countries grappling with the rise of emerging countries. While the G20 emerged as the major platform for global politics, the expansion of its agenda and its relevance amidst dynamic geopolitical and economic contexts in the future will determine its prospects.

The G-20 has other instrumental benefits, namely the formation of a new and updated concentration of power and has cross regional reach.  The growing strength of the G-20 as a forum however does not mean that G-20 decisions are effective. G-20 pessimists often cite lack of progress on curtailing currency wars and macroeconomic imbalances and repeatedly express disappointment over the outcome of the G-20 summits. Global governance, even with just twenty members and consensus based decision making, is an arduous task.

The G-20 demonstrates that in a multipolar world, emerging powers have to share the burden of leadership with great powers. However, it has realised very little since 2009 despite much talk. China’s assumption of presidency could provide the group with the push it needs to effect any major change. However, the agenda for discussions remains unclear thus making durable solutions to the problems of global governance implausible.

[1]  Marcin Szczepański and Etienne Bassot, “The Group of Twenty (G20): Setting the Global Agenda”,  European Parliamentary Research Service (Brussels: January 2015) p.8

Hamsini Hariharan is a Research Scholar with the Takshashila Institution and tweets at @HamsiniH

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Three parameters for evaluating global governments

What are the parameters that can help us judge the effectiveness of supra-national political unions?

by Pranay Kotasthane (@pranaykotas)

For about a decade now, geopolitical analysts have been discussing about the emergence of a new world order. The formation (and mere formulation) of new supra-state constructs such as G-20, BRICS, SCO are an evidence for these expectations that demand a shuffle in the world order.

The call for new international institutions is exacerbated by the ineffectiveness of the dominant international governments of the day — the United Nations (UN), International Monetary Fund (IMF) and World Bank (WB). The fundamental reason for their ineffectiveness is the divergence between the power distribution inside these institutions and the power distribution in the world at large.

Consequently, any new formation that tries to compete with the existing system will have to prove its relative superiority over the existing system. But how does one measure this? Are there any parameters that can help us evaluate the effectiveness of supra-national political unions?

Hans Morgenthau’s classic work on political realism ‘Politics of nations’ offers us some interesting answers to these questions:

With regard to each of the attempts at international governments, three questions must be asked:
1. Where is the authority to govern vested, or who is to govern?
2. By what principle of justice is the government to be guided, or what is the conception of the common good to be realised by the government, and
3. To what extent has the government been able to maintain order and peace.

World Order

Image courtesy: username: wiertz, flickr. Creative commons.

Taking these parameters as a reference point, we can observe the following about today’s world order:

Parameter 1. Authority to govern has traditionally been vested in victors of major wars. For example, victors of World War 1 took the lead in forming the League of Nations. Similarly, the current system with the UN at its apex is a direct outcome of the World War 2. The writ of the UN is effectively the writ of the UN Security Council which has the allied powers as its permanent members. The UN General Assembly on the other hand, by design has very limited role in geopolitics.

However, we are now in a world where nuclear deterrence has made wars of a global scale less likely. This means that any new organisation seeking to challenge the current system must derive its authority from a source other than war invincibility. Given that we have had several global economic depressions, and no world wars, this source of authority can well be the economic prowess of a supra state. Global governments of the new age must possess collective a economic might that can tide over the world’s tougher problems.

Moreover, authority is a function of both, power and legitimacy. While economic power is a result of several other factors, legitimacy can be enhanced by effective response in times of crisis.  For example, the initial promises made by the G-20 group following the 2008 recession made the world take notice of this organisation.

Parameter 2. The system of justice to be realised by an international government is a resultant of the justice systems of the constituent great powers. Previous experiences of international governments show that the system of justice has come to mean two things. One, to maintain the political status quo achieved as a result of the war and two, to deal a debilitating blow to the defeated.

Based on the assumption that the emerging world order will be determined primarily in the economic domain, the corresponding justice system will lay emphasis on areas such as trade and monetary flows, investments in infrastructure and so on. Seen from this perspective, it doesn’t come as a surprise that all international formations are trying to build an economic system of their own. Thus, we have China investing in Asian Infrastructure Investment Bank (AIIB) and One Belt One Road (OBOR), while the BRICS are attempting a New Development Bank (NDB) of their own.

Parameter 3. While averting major wars, the UN system has been found wanting in countering terrorism and mass atrocity crimes. Norms such as Responsibility to Protect (R2P) have been applied selectively at best, taking up issues of direct concern to the great powers while ignoring issues which are out of their collective conscience. As a result, we see instances of human rights violations from Balochistan to Yemen, receiving nothing but wholesale ignorance.

In this regard, the new world order will have to perform better on countering terrorism and mass atrocities. Going ahead, maintaining order and peace will not be as much about preventing conventional wars but about responding to asymmetric violence.

Having observed the parameters from the contemporary perspective, one might ask, what should be the ideal size of an effective international government? Clearly, the current number (5) is too small, and having all countries (>200) on board will only slow down the response.

Morgenthau offers a solution for that question as well:

An international organisation cannot be so universal that all members are in it but it should be universal in that all nations likely to disturb the peace are under its jurisdiction.

Pranay Kotasthane is a Research Fellow at The Takshashila Institution. He is on twitter @pranaykotas

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