G-20 Summit: relegating global interest

As the leaders of the world’s biggest powers gather for a Group of 20 summit, their South Korean hosts talk hopefully of the organization as a steering committee of the world. But there are so many different hands grabbing for the steering wheel that the G20 will be lucky to survive without a serious accident, Gideon Rachman wrote in an article, The G20’s seven pillars of friction.

According to Rachman, there are now seven major axes that divide the world: Surplus versus deficit countries, manipulators vs. manipulated, tighteners vs. splurgers, democracies vs. autocracies, West vs. the rest, interventionists vs. souverainistes, and big vs. small countries. Hence, Rachman concludes that the result is dispiriting. He points out that “far from being the solution to the world’s most urgent problems, the G20 looks increasingly divided, ineffectual and illegitimate.”

World leaders

The G20 is responsible for developing international policies that create and stabilize the international financial architecture. During the G-20 summit leaders are supposed to work on several mid- and long-term policy issues, including ensuring global economic recovery, creating a framework for strong, sustainable, and balanced global growth, strengthening the international financial regulatory system, modernizing the international financial institutions, creating global financial safety nets, discussing development issues and currency wars. But instead of sticking to the agenda, G20 leaders are trying to pursue their own interests. There is no unity on the idea of the new financial world order that was originally intended to be created.

Decisions taken at the G20 summit in Seoul will not change the situation on the foreign exchange market and the economies of the participating countries. Economists warn that the G20 effectiveness that depends on commitment has decreased.

It is understandable that everyone would want to derive more benefits, but at the most toughest times cooperation is needed, not individualism.

“Only cooperative action could get us forward,” German Chancellor Angela Merkel said in a speech at the G20 business summit, according to a text which was released in advance.

It should be real cooperation of equals, as there are no more less important members in the modern globalized world. They say there are no win-win situations, but making some sacrifices for the greater good could make everyone better off.

A renewed commitment to development by the world’s most powerful group would certainly be a major step in the right direction and send an important political signal to developing countries, it is of course not enough on its own to overcome the immense challenges that these countries face. Nor does it necessarily invalidate some of the concerns raised regarding the G20’s legitimacy and capacity.

“What really counts is that each member of the group internalizes the concepts of fairness, balance, and the common good and adapts its behaviour accordingly. If the G20 setup can help them do so by playing to its unquestionable strengths of composition, reach and sheer economic prowess, this will be all the better and should not only be welcomed, but encouraged,” Kofi Annan, Former UN Secretary General, wrote in his article G20 Leaders Must Renew Their Commitment to Global Development.

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