The beginning of the end of the G20?
On September 9-10, the G20 summit took place in India, giving the leaders of the world’s largest economies the chance to meet in a relatively informal setting.
Established in 1999, the Group of 20 initially aimed to coordinate global economic activity, with a strong ambition to centralize decision-making on a global scale. It maintains a close partnership with the Organisation for Economic Co-operation and Development (OECD), a supranational organization dedicated to standardizing economic and financial practices globally based on technocratic principles. This approach aims to tightly regulate markets, thus limiting entrepreneurship and economic freedom on a global scale.
The G20 gained significant traction following the 2008 financial crisis and the advent of United States President Barack Obama’s administration, which advocated for greater state intervention in the economy and displayed skepticism toward markets.
Since 2008, this group has primarily represented the interests of larger states. It has collaborated with the OECD to construct an increasingly bureaucratic framework for standardizing economic, monetary and fiscal activities. This primarily benefits larger countries with extensive bureaucracies, regardless of whether a country is a democracy or an autocracy. Despite this power grab, mainly European technocrats and politicians hide behind the cloak of the OECD as an independent transnational body.
Ironically, this restrictive approach not only stifles entrepreneurial activities, economic development, innovation and prosperity, but also hampers the efficiency of public administrations and creates difficulties for dedicated civil servants.
A turn toward the political
Starting in 2014, with Moscow’s invasion of Ukraine, the G20 began to take on a political dimension, which has become even more pronounced since Russia’s full-scale attack on its neighbor in February 2022.
Unfortunately, the G20 has strongly supported and legitimized the OECD’s technocratic efforts to control all financial and economic activities. The reporting requirements imposed by this collaboration not only burden the economy with significant costs but also intrude on the universal human right to privacy. This serves the interests of an ever-growing state and creates a high tax cartel. It further limits freedom and self-determination.
However, there is now a significant crack in the G20’s facade. The leaders of two major member states, China and Russia, are beginning to show disinterest by sending deputies in their place. China seems more inclined to work with other groups, such as the five-nation BRICS, which will expand to 11 member nations in 2024. All five BRICS nations – Brazil, Russia, India, China and South Africa — are also part of the G20.
A similar sentiment may apply to Russia. Russian President Vladimir Putin could have attended the summit in New Delhi, given that India is not a member of the International Criminal Court and therefore not obliged to arrest him on the war crimes charges that he is facing. However, Mr. Putin chose not to attend, showing a lack of enthusiasm for the event.
For this meeting, host India proposed several themes under the slogan “One Earth – One Family – One Future” to highlight political responsibility for the future. The reality was more mundane. While Western countries aimed to condemn Russia’s invasion of Ukraine, the summit could only agree on a text opposing the occupation of another country by force. Predictably, Russia and China did not support this condemnation, and several other states opted to remain neutral. To reach a compromise, a clause was included that could be interpreted as criticism of certain sanctions against Moscow.
One accomplishment is touted
As for other issues such as the debt of developing nations, the environment and climate, no significant progress was made or expected.
Nonetheless, U.S. President Joe Biden and Indian Prime Minister Narendra Modi did manage to present one achievement: the unveiling of an India-Middle East-Europe economic corridor. This ambitious infrastructure initiative aims to enhance commerce, energy and digital connectivity through a series of railway and shipping routes. Its financing comes from the U.S., European countries and Gulf states. It can be seen as a countermeasure to China’s Belt and Road Initiative.
The Biden administration is currently preparing a “New Washington Consensus,” which contrasts with the original 1970s and 1980s consensus that promoted global free trade, entrepreneurship, competition and lean government. The new version, championed by White House National Security Advisor Jake Sullivan, advocates for stronger government intervention in the economy and tighter controls and central planning, not only nationally but also globally.
The G20 could have been a useful vehicle to advance this agenda.
However, the recent events at the BRICS meeting and the G20 suggest that most emerging countries are inclined neither to follow Western guidance nor become too dependent on China. The disinterest of China and Russia, combined with the assertiveness of southern countries in asserting independent positions, is likely to diminish the importance of the G20. Given its track record of promoting a tight global web of economic control and the negative consequences this can have on prosperity, this development may ultimately be beneficial in the long term.