In the G-Zero, the world's major powers set aside aspirations for global leadership—alone, coordinated, or otherwise—and look primarily inward for their policy priorities. Key institutions that provide global governance become arenas not for collaboration but for confrontation. Global economic growth and efficiency is reduced as a result.
It's a new phenomenon in the post-industrial world. For a brief period following the financial crisis, governance of the global economy looked to be handed over to the G20. It was a decidedly messier group than the G7, with a broader agenda and less room for agreement. Still, at least in principle, members shared an overriding interest in the stability of the international system. However much the national interests of members may have differed, G20 leaders shared a willingness to work in concert (or at least to talk the talk) until the world economy stabilized. This was the "rise of the rest" model—a post-American world to be sure, but one where the United States continued to play a guiding role.
G20 cooperation proved a short-lived collective reaction to panic; safety in numbers in the face of imminent disaster. The first indication it wouldn't last came in Copenhagen a year ago, following a climate summit marked by such disunity that the outcome was worse than if no meeting had taken place. Climate proved a sufficiently low-grade priority in the middle of a hard-fought global economic recovery that the frictions were quickly forgotten. That's less the case with last fall's IMF meeting in Washington and G20 meeting in Seoul, which ended with warnings of a global currency war and a return to the national economic barriers of the 1930s. During both summits, the economic strategies of the world's leading economies were set in opposition to one another.
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No new global alignment sits over the horizon. ... there's no near-term Beijing consensus; no development of the BRICs as an effective bloc; and no effective coordination of the "West."
Eurasia Group's President Ian Bremmer and Head of Research David Gordon Announce Top Risks for 2011
ReplyDelete1 The G-Zero
ReplyDelete2 Europe
3 Cybersecurity and geopolitics
4 China
5 North Korea
6 Capital controls
7 US gridlock
8 Pakistan
9 Mexico
10 Emerging markets
In the G-Zero, the world's major powers set aside aspirations for global leadership—alone, coordinated, or otherwise—and look primarily inward for their policy priorities. Key institutions that provide global governance become arenas not for collaboration but for confrontation. Global economic growth and efficiency is reduced as a result.
ReplyDeleteIt's a new phenomenon in the post-industrial world. For a brief period following the financial crisis, governance of the global economy looked to be handed over to the G20. It was a decidedly messier group than the G7, with a broader agenda and less room for agreement. Still, at least in principle, members shared an overriding interest in the stability of the international system. However much the national interests of members may have differed, G20 leaders shared a willingness to work in concert (or at least to talk the talk) until the world economy stabilized. This was the "rise of the rest" model—a post-American world to be sure, but one where the United States continued to play a guiding role.
G20 cooperation proved a short-lived collective reaction to panic; safety in numbers in the face of imminent disaster. The first indication it wouldn't last came in Copenhagen a year ago, following a climate summit marked by such disunity that the outcome was worse than if no meeting had taken place. Climate proved a sufficiently low-grade priority in the middle of a hard-fought global economic recovery that the frictions were quickly forgotten. That's less the case with last fall's IMF meeting in Washington and G20 meeting in Seoul, which ended with warnings of a global currency war and a return to the national economic barriers of the 1930s. During both summits, the economic strategies of the world's leading economies were set in opposition to one another.
In 2011, as the interests of developed and developing states diverge, and as American, European and Japanese lawmakers split over the relative merits of stimulus and austerity, the biggest global plenaries will experience a breakdown of order. This is not simply a lack of coordination and progress; increasingly they will become fora for political posturing at best (this month's Obama-Hu Jintao summit; the world economic forum), conflict at worst (the Cannes G20, the IMF). During these meetings, markets will hold their breath, hoping they pass without incident.
No new global alignment sits over the horizon. Why the G-Zero and not bloc-formation where countries pool their influence? Because the default policy response to a breakdown in global economic governance is every man/nation for himself. As demonstrated even in a politically integrated Europe, without common rules, there's no such thing as collective economic security. In the G-Zero, domestic constituencies will become increasingly effective in pushing populist agendas on trade, currency, and fiscal policy. However much economic dispositions become ideologically statist, in the absence of agreed global norms, economic agendas are overwhelmingly resolved at the national level (whereas security policies, with the partial exception of those of superpowers, are overwhelmingly resolved in coordination with allies). Hence there's no near-term Beijing consensus; no development of the BRICs as an effective bloc; and no effective coordination of the "West."
ReplyDeleteTo be sure, as economic (and related political) conflict grows over time, greater coordination will eventually evolve as a response, first at subregional and then regional levels. And even at the height of the G-Zero not everything on the global stage is up for grabs. There's little capacity to build a nuclear nonproliferation regime in a G-Zero world, but it's not as if the G7 was more effective on that score—financial crisis or no, North Korea and Iran were still going nuclear. And the United States had a tough time drumming up support for military campaigns in Iraq and Afghanistan well before the G20 took center stage.
But that's little consolation for the coming year. As geopolitics takes on an increasingly geoeconomic hue, all the G20 pledges to "avoid the mistakes of the past" will not prevent the G-Zero from taking hold and sparking other forms of conflict.