The West-Russia Tiff Overshadowed G20 Summit.

2014-12-15 16:51

Halla Putin, Bye Growth.

The G20 Summit in Brisbane, Australia, in early November 2014 reached a welcome agreement on crucial questions facing the global economy including the identification of structural reforms that should be implemented, adoption of policies that support private sector-led growth, the strengthening of demand, contain the rise of sovereign debt, endorsement of the global infrastructure initiative to attract investors and create jobs, and boosting employment through apprenticeships and incentives for hiring young people.

But these issues were not the focus of public discussions regarding the G20 because the conflict between Russia and the West over the conflict in eastern Ukraine had taken centre states. The politics of global power play, great power rivalry over spheres of influence in world regions, sidetracked the summit in more ways than one. The question is what are the implications of this?

The G20 emerged in the late 1990s as a platform of ministers of finance and central bank governors to discuss international finance and economy. In 2009, George W. Bush, the then US president, invited heads of state of the countries participating in the G20 to a summit to discuss ways of dealing with a global financial and economic crisis that emerged in 2008, resulting in the collapse of big financial corporations and causing a decline in the global economy.

Each summit since then has been used to develop a consensus position on what measures should be taken to boost the economy and support economic recovery.

The summit in South Korea in 2011 built on agreements at the Toronto summit a year earlier on the need for a development consensus by adopting a document outlining such consensus. These and other ideas are discussed and decided upon at G20 summits.

Brisbane allows Sidetracking of real Common Agenda

The Brisbane Summit was initially pitched in public communication as focused on practical measures to ensure a robust global economy, one that is able to produce employment and ensure global economic resilience.

As hosts, Australia invested a lot into elevating the importance of infrastructure development at a global level as a way to attract investment and stimulate private sector growth thereby encourage employment growth especially for young people. It hoped that the summit would adopt the over 1000 measures covering economic growth and resilience, and the reform of global institutions.

The matters of global economics were firmly at the centre of the agenda and public discourse until the western powers and Russia decided to escalate their tensions over the Ukrainian crisis that began after Ukraine government that was later dethroned chose a strategic economic partnership with Russia to the east over one with the EU to the west, this setting off a chain of events in which the east-west rivalry has been prominent.

In the run up to the G20, western powers had kicked Russia out of the G8 and slapped sanctions in order to isolate it. They decided that they would use the Brisbane G20 Summit to speak tough against Russia.

Thus, they decided to in fact make Russsia the focus of the Australia encounter in the hope that in this way they would isolate Russia. Tony Abbot, the Australian Prime Minister who was the host, went as far as promising that he would "shirtfront" Putin in person and would have the toughest encounter with him. Of course, this was exaggerated into a wrestling prep talk.

Indeed, as the summit started the focus was almost wholy on everything about Putin, from his posture to his facial express to his interaction with every single person in Brisbane. The media was also discussing what the various western governments were saying about Putin, both about their threats and about how tough they spoke to Putin.

G20 and the Class of Expectations.

The G20 emerged in the midst of the global economic crisis epicentered in the industrial west in the late 2000s to become the premier platform for managing international economic cooperation. It eclipsed the western dominated Group of Eight (G8) forum as the apex of global decision-making on the global economy, thus confirming the slow diffusion of economic power from one where western powers were sole pillars of the global economy to one where Asia, Latin America and Africa are also significant.

It this became untenable to project the group made up of predominantly western powers as a legitimate underwriter of global economic reforms. Not only was its geopolitical legitimacy as a body diminished with growing agency of the non-western world, but its performance in respect of its failure to live up to its lofty claims and good promises as reviews have repeatedly shown.

The G7 configuration (G8 minus Russia) works to maintain the post-war global status quo of western-dominated economic growth and development, which produces underdevelopment in the developing world, and thus it has interest in maintaining the power and privilege of the west.

So, when the G7/G8 also failed to anticipate, prevent, and effectively respond to the global economic crisis in the late 2000s, its legitimacy dissipated, at least in the eyes of peoples of the world and nations of the south.

It was thus a stroke of genius when US president, George W. Bush, inaugurated in 2009 the G20 Summit out of the G20 of finance ministers that had existed for several years. This was initially likened to an expansion of the G8 through the addition of 12 other countries including major emerging powers of the south. It was expected by some that the G20 Summits would extend the G8 agenda to the whole world by enlisting the support or connivance of major regional emerging powers in Africa, Asia and Latin America, turning them into sources of global geopolitical legitimacy of the old agenda. It was thought that it was a proverbial new wineskins but old wine.

On the other hand, there was a sense that the G20 was what the changing balance of power internationally needed, the recognition of unavailable interdependence and cooperation across the North-South divide to develop the basis for a common vision for common humanity.

The struggle between these possibilities is far from resolved as the impulses for subverting the G20 to the interests of the G8 co-existing in competition with those increasingly epitomised by the Brazil, Russia, India, China and South Africa (BRICS) platform in favour of a multipolar and multilateralist and inclusive framework for international economic cooperation.

It is understandable why the US and other major western powers want to see a G20 that give legitimacy to the G8 where they call the shorts and why most emerging powers work in favour of an inclusive G20.

The Urge to Confront Putin Eclipses Global Economic Challenges.

As hosts and president of the G20 in 2014, Australia was sidetracked from its focus on getting a deal on concrete measures for ensuring a robust global economic growth by improving the management and use of public finances, reforming economies, support conditions that the private sector to invest, expand and hire employees.

Feeling the urge to speak tough against Russia that it suspected of having a role in the downing of a Malaysian airline over eastern Ukraine, the Australian Prime Minister, Tony Abbot, publicly promised to use the G20 encounter to "shirtfront" or physically confront the Russian president, Vladmir Putin. He vowed that his conversation with the Russian prime minister would be "the toughest conversation of all".

Members of several western governments even started talking about excluding the Russian president from the G20 Summit. At that point, the media stopped reporting on the Australian G20 agenda and focused on the promised boxing match.

It stopped promoting the need for a strong consensus on what was needed to rejuvenate the global economy, but focused on the West's appetite for escalating tensions with Russia. Headlines focused on the west talking tough to Putin, excluding and isolating him, making Russia feel the heat and giving him an uncomfortable time in Brisbane.

Whereas Australia had placed high ambitions for robust economic growth and economic cooperation on the agenda in the months leading to Brisbane, it allowed irritations arising from global power rivalry to dominate the discourse before and during the G20 summit.

Australia had argued strongly for a shift from government-led to private sector-led economic growth, infrastructure development across the globe, measure to improve economic planning, strengthening financial systems, development of new international tax rules that enable new business models, encourage the US to ratify IMF quota and governance reforms agreed by all.

Just over 1000 concrete measures, a large number of them new, had been developed for thorough discussion and adoption by the G20 summit and very few of these enjoyed public discussion as the West-versus-Putin power game became the main focus of public discussions around and about the G20.

Thus, an opportunity to strengthen, at least in the eyes of the public, global consensus for economic rejuvenation and international economic cooperation with a view to accelerating socio-economic development throughout the world was lost.

The BRICS Caucus in the G20

Meeting in June 2014, BRICS leaders rejected offhand the intention to exclude Putin from the G20 and reminded the world that "the custodianship of the G-20 belongs to all member states equally and no one member state can unilaterally determine its nature and character." It argued that the Ukrainian crisis could only be resolved through political dialogue involving all concerned and not by the imposition of a particular view on others.

Of course, earlier, in March 2014, BRICS had through a meeting of foreign ministers issued its first common position on Ukraine, which was that the crisis should be resolved in "calm and leve-headed manner" through dialogue within the ambit of the United Nations.

BRICS leaders had an informal meeting on the sidelines of the overshadowed G20 Summit, confirming the sense that the G7 and the BRICS had emerged two key poles of power within the G20 representing competiting to global power. The meeting agreed that the establishment of the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) marked the creation of instruments "to contribute to the stability of the international financial system." They announced that the interim Board of Directors for the bank had been set up and the Work Plan for the full establishment of the bank was making progress.

The CRA working group had concluded their on procedures and rules for the Governing Council and theStanding Committee, while work on the Inter-Central Bank Agreement was already afoot. They agreed to expedite the ratification processes.

They were thus not waiting for the US to respect the will of the majority of G20 countries pertaining to the IMF reforms that the US had still not ratified, but they were pushing ahead.

Then, BRICS leaders discussed matters on the G20 agenda including measures for growth and job creation, investment and infrastructure, trade, financial systems and tax, and energy issues. They committed to work with others to ensure that the G20 was successful in its work, while noting that the recovery of the global economy was yet to materialise because growth in the developed world remained very low and the contribution of high growth rates from emerging economies was not enough to rejuvenate the global economy.

They expressed deep disappointment at the non-implementation of the IMF reforms agreed in 2010. Of course, they did not want to publicly name the US for stalling the implementation of the reforms, thus undermining the spirit and letter of G20 agreements and commitments on this since 2009.

The BRICS sought to take initiative to advance their shared agenda, which is in many ways also a global south and emerging powers agenda, in spite of some internal differences, rather than leaving everything to the G7 caucus in the G20. It decided to also use the opportunity to focus on their own internal issues and strengthen the unity of their purpose.

Shirt-fronting at the expense of foreground development.

This meant that the G20 would not be remembered only for "shirtfronting", but also for fronting the agenda for growth, employment and global reforms. They sought to demonstrate their commitment to negotiated solutions and political dialogue as an alternative to the western choice of sanction and condemnation with possible military options somewhere in the back pockets.

This does not mean that the BRICS are united behind Russia, far from it. Neither do I imply that they have no internal differences on any number of issues on the G20 table. I do not suggest that the BRICS and G20 are equivalent geopolitical structures that are in some competition, but that the BRICS and G7 are had fundamentally different approaches to the G20: the latter somewhat unilateralist and the former multilateralist.

All that I am saying is that the BRICS sidelined the G20 noises that shifted the public focus on the meeting from matters of economic rejuvenation and reforms to the great power rivalry between the West and Russia with Ukraine as a proxy.

In the process, we have come to know of the speed with which BRICS is pursuing its economic initiatives, creating hope for alternative and additional finance for development in developing regions like Africa.

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