Why G-20 summit was all show and no substance
The G-20 summit in Hangzhou on September 4-5 did not produce any eye-catching results, despite its much lengthier final communiqué (48 paras) compared to that of the 2014 Brisbane summit (21 paras) and the 2015 Antalya summit (27 paras).
Declarations
The summit was held under the shadow of China's economic slowdown, its intemperate rejection of the UNCLOS arbitration ruling on its unlawful conduct in the South China Sea and growing US-China differences, not to mention mounting tensions or mistrust between China and major G-20 countries such as Japan, Canada, Australia and even India.
The G-20 communiqué is full of high-sounding declarations on all that is needed to promote global growth and equity as a collective endeavour, ignoring the large gap between precept and practise.
The determination "to foster an innovative, invigorated, interconnected and inclusive world economy to usher in a new era of global growth and sustainable development" was expressed, even though actual trends do not support this objective.
The G-20 leaders noted weak global growth, the potential volatility in the financial markets, fluctuating commodity prices, sluggish trade and investment, and slow employment growth in some countries.
Challenges to the global economic outlook originating from geopolitical developments, increased refugee flows, terrorism and conflicts were also pinpointed.
But no concrete solutions to these problems stemming largely from the political, economic and security policies of the dominating powers have been offered.
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| PM Narendra Modi at G-20 Summit, Hangzhou. (Photo credit: Reuters) |
US mismanagement of its financial sector accounts for the persisting financial instability.
China's frenetic growth that guzzled up resources worldwide has created huge sectoral overcapacities there that, with the country's growth slowing down, are disrupting commodity markets.
Regime change policies that continue in Syria, Turkey's destabilising regional ambitions, the Saudi-Iran rivalry that is stoking sectarian conflict, the half-hearted fight against the Islamic State, inconsistent approaches to religious extremism and terrorism by major G-20 states, the renewal of Cold War politics in Europe, China's aggressive behaviour in the western Pacific are ironically responsible for the challenges that the G-20 communiqué identifies.
How will the G-20 collectively transform its economies in a "more innovative and sustainable" manner? Advanced economies, in fact, rely on technological innovation to preserve their global economic hegemony as best they can.
Pressure on Intellectual Property Rights (IPR) issues on developing countries is intended in part to preserve the innovative and technological edge of the West over others.
Innovation requires a supportive infrastructure of human capital, quality of education, financial resources, expenditure on R&D, entrepreneurship, market forces and a culture of risk-taking and competition, which can only be created over time with massive effort.
The debate over sustainable development is already decades old, and is riddled with an underlying calculus of market advantage and managing competition, etc.
Globalisation
Attitudes towards globalisation are changing in those very countries that vigorously promoted it for creating an increasingly barrier-free global market for their multinational corporations.
The G-20 leaders committed themselves to build an open economy, reject protectionism, further strengthen the multilateral trading system and so on, yet it is the West which is now visibly disenchanted with globalisation because it has favoured investment across countries by multinational corporations in search for cheap labour, easier environmental regulations, availability of high quality human resources for R&D at much lower cost, tax advantages and so on.
Loss of jobs and income inequalities in countries hitherto the standard-bearers of globalisation have caused a backlash.
The G-20 communiqué speaks of harder work to build an open world economy, reject protectionism, promote global trade and investment, including through further strengthening the multilateral trading system and eradicating poverty as part of the emphasis on inclusiveness.
In fact, as electioneering in the US presidential election and developments in Europe show, protectionist discourse and anti-foreigner sentiment are growing.
Agreements
The US is pushing for regional trade agreements - the Trans Pacific Partnership and the Transatlantic Trade and Investment Partnership - to outflank the WTO, and through these pacts introduce in international negotiations regulatory, investment protection and IPR issues resisted by the developing countries within the WTO framework.
Bridging the digital divide with affordable broadband access, completion of work on a new IMF quota formula by 2017, scaling up green financing, greater international cooperation against corruption with the surprising caveat of respecting human rights and sovereignty of each country, are mentioned in the G-20 communiqué.
So is support for the WTO, but with the door open for introducing new issues of liberalisation that are being addressed in regional trade arrangements, a collective response to the excess capacity in steel and other industries, and various steps to combat terrorism, including choking up its finance.
During the G-20 summit the BRICS countries gather separately and highlight their perspective on the global economic agenda.
Their statement at Hangzhou echoed parts of the G-20 communiqué on innovation, inclusiveness, sustainable growth and the like, but emphasised WTO as the cornerstone of the multilateral trading system with prime focus on development, expressed concern at rising protectionism, called for reviewing IMF quotas, stressed energy security and universal energy access, welcomed the work of the New Development Bank created under the auspices of the BRICS group and had a formulation on terrorism that emphasised the UN's central role in combating it but omitted any mention of the UN Comprehensive Convention on International Terrorism sponsored by India.
(Courtesy of Mail Today.)