Jostlin' for the G

With little concrete agreement going into the historic meeting, and the host, British Prime Minister Gordon Brown, playing down his former talk of a 'global New Deal', expectations are pretty low for the G20 summit tomorrow. The gathered leaders will doubtless once more meaninglessly condemn protectionism and profess a unity of resolves in combatting the economic crisis, but a coordinated stimulus is not on the table and even where there is a rough agreement - on the need for renewed banking regulations and a bolstered IMF - we are still probably months away from having the details fully thrashed out.

But while the London Summit may fail the needs of the global economy, in terms of future international coordination the phoenix is already in flight. The Summit is now being cast by Mr Brown's spokesman as "very much part of a process" of which "we are nearer to its beginning than to its end." Italy, France, Japan and South Korea are already jostling to host the next G20 summit to continue the discussion. China is growing into its role as one of the major players on the planet. Even if come the weekend there is little concrete to show for it, the new era of concert diplomacy is undoubtedly here to stay.

The money men meet

The G20 Finance Ministers and Central Bank Governors met in London today, to thrash out the outlines of the eventual full summit on April 2. The official communique which sums this up thus gives us the best sense of what will - and won't - be achieved in three weeks time.

The biggest achivement seems to be agreement on more cash and responsibilities for the IMF, which will probably be accompanied by its restructuring to bring on board more members of the developing world. Its always nice to hear a commitment "to fight all forms of protectionism and maintain open trade and investment", but there was no sense of momentum to revive the quietly dying Doha round of WTO talks. Europe, meanwhile seems to have won the 'further stimulus vs financial regulation' transatlantic squabble as to the focus of the meeting. The "key priority" is to tackle the "problems in the financial system head on", while the wording concerning fiscal expansion is self-congratulatory, and it is to be 'sustained' rather than expanded.

The G20, in a best case senario, will boost the flagging global economy not so much by the quality of the proposals in and of themselves, but by reassuring markets that the world's leading nations are indeed capable of coordinating an effective response to the crisis. Simply reequipping the IMF will not be enough, at least not after US National Economic Council Director Larry Summers made plain the view of the American administration that a further global stimulus is needed, and brought the divided attitude of the developed world clearly into the open.

Broadening our perspective then, and the long-term outcome of the G20 talks is set to be an entrenching of the developing world in the highest mechanisms of global governance, with the G20 itself emerging as the undisputed first forum for tackling the pressing problems of global economics, and a reshaped IMF being its primary result. But if the talks held so far are any indication, the summit in April will also reveal the continuing deficit of cooperation between the developed democracies which until now have run the show themselves.

Wish List

The developed democracies of the world have paired-off into two camps. Hopefully, all can agree on the evils of protectionism and crowd-pleasing clamp-downs on tax havens. But at the moment, the Europeans are focusing on regulation and resisting calls for further stimulus, while the Americans and Japanese are pushing for renewed global government spending and holding out a beefed-up IMF (which would help among others struggling economies in central and eastern Europe) as the reward. We could get all this if we're lucky, or we could get nothing but vague promises of future frameworks. The London Summit is less than three weeks away.

Taro'ed with the same brush

Surely this time the LDP, which has governed Japan continuously since 1955 apart from a few short months in 1993, will be firmly thrown out of power? The Japanese economy is in the midst of its worst slump since the devastation of the Second World War, and support for the scandal-hit cabinet of current LDP Prime Minister Taro Aso barely breaks two-digits. But now the leader of the opposition DJP, Ichiro Ozawa, who had appeared almost certain to win a general election due by September, is himself facing a growing storm of corruption allegations.

The DJP will probably still win the election, since their support is a product of dissatisfaction with the LDP rather than enthusiasm for their own leaders and loosely articulated platform. But even if they win, the DJP is little but a clone of the LDP, based on factional alliances of convenience rather than ideological bonds. In the long run, govenment in such a manner isn't a particularly healthy way to run a democracy.

An optimist might hope that if Mr Aso and Mr Ozawa are ousted by their parties, a new generation of leaders will emerge to steer their parties into clear ideological waters. Alternatively, a decisive defeat for the LDP might cause it to collapse as its role as a sure ladder of patronage for the traditional elite is cast into doubt, leading in turn to a tectonic realignment of Japanese politics as fresh parties spring into life, perhaps pulling the DJP apart in the process. Unless that happenes, the much-heralded first stable non-LDP government in 50 years might well mark no significant break.

Une certaine idée de l'indépendance

France is back in NATO's integrated military command. President Nicolas Sarkozy, who made it a personal mission to lead it there, argues it will boost French influence in the world. His critics across the domestic political spectrum argue it will diminish French independence. Many military analysts argue it will have no discernable effect on NATO at all. There is truth in all these assertions.

Full NATO membership undoubtedly makes plain France's primary loyalties, perhaps making its diplomatic wiggle-room that little bit narrower. But gone are the days when claiming that France could lie 'between East and West' made any sort of sense, or when Paris could project significant solo influence abroad anywhere except pockets of Africa. A seat at the highest tables of military decision making in the developed world will give France the chance to help shape NATO's future direction. It might also make an integrated EU military structure - arguably Sarzoky's true design - a little more likely.

But NATO's capabilities have not been augmented: France has made no fresh troop commitments to match its renewed political will. Nor has France's reintegration made NATO's future path any clearer: a new Strategic Concept is long overdue, with the last one unveiled as long ago as 1999. Political commitment to the transatlantic alliance is to be undoubtedly celebrated. But NATO's successes in the short run are dependent on the forces it can actually commit; its relevance in the longer term on a vision of what to do with them.

Ominous arguments

On the eve of a G20 summit designed to coordination the responses of the major world actors to the largest economic crisis since the 1930s, the difficulty of actually forging agreement both between the established and emerging powers and within the developed democracies themselves has been on painful display in the past few days.

A spat in the South China Sea both demonstrated the importance of military coordination between the US and China, and the more prosaic regional issues on which such cordination will in the first instance be based. At talks last weekend, piracy and Afghanistan were on the agenda, but until the can work out and agree on their respective roles within East Asia the potential for instability will be ever-present.

Meanwhile, Prime Minister of Luxembourg and chair of the Eurozone finance ministers, Jean-Claude Junker, summed up the attitude of many European countries when he contemptuously dismissed US proposals for increased and coordinated stimuli as "not to our liking". NATO countries continue to refuse to offer extra troops to serve in Afghanistan. If the transatlantic community cannot agree on common positions, it is hard to see how they will succeed in bringing the developing world on board.

Libertarian escapism

The Economist's traditional free market editorial line has taken a battering over the past year. With capitalism 'at bay', the instictively libertarian magazine has been forced into some tactical retreats in its economic prescriptions. Last week, pragmatism trumped idealism, and it called for the nationalisation of some of the world's biggest banks. This week, however it calls for an end to prohibition: the legalisation of the recreational drugs fueling crime, insurgency and additiction across the globe.

In seven days, then, from the practical and probable to the politically impossible. Even if it must conceed ground in the economic sphere, the Economist still carries the flame of political liberty deep into dark recesses where policymakers may never actually tred. The current global downturn is scary enough, but any shock which would cause the Economist to abandon its social advocacy - whether or not one actually agrees with what its proposing - would be truely, truely terrifying.

The Fogh lifts

Proof: developed democracies are capable of coordination. Or are least they are when it comes to political appointments to head their organisations.

It appears that the next secretary-general of Nato, by tradition a European rather than American, will be Danish Prime Minister Anders Fogh Rasmussen, after Britain, France and Germany agreed to back him for the post. His supposed biggest challenger to become NATO's top diplomat, Poland's smooth-talking Oxford-educated Foreign Minister Radosław Sikorski, apparently prooved too alarming for the Russians. While Mr Sikorski has endeavoured to built bridges with the Kremlin in his latest role for the moderate Civic Platform-led government, he is paying the price for a previous job as Defence Minister in the much more Russophobic Law and Justice-led administration which left office in 2007, as well as Poland's decision to cooperate with the US over missile defence.

One casualty of Mr Rasmussen's probable elavation is the cause of European unity - or at least of the further integration of Denmark into the EU. Mr Rasmussen was considered a leading candidate for the first permanent President of the European Council, a position whose existence awaits the coming into force of the Lisbon Treaty. Mr Rasmussen has presumably decided that he cannot wait forever, and now won't endeavour to carry Denmark into the euro or abolish some of its opt-outs in a last-minute attempt to secure a reputation as a 'good European'. Set to benefit are all those undeclared candidates for the post of President of Europe - should it ever come into being - among whose numbers is apparently Britain's former Prime Minister, Tony Blair.

Knelling renewal

A column by former Australian Prime Minister Paul Keating in today's financial times gives me an oppotunity to sum up the conclusions of two longer blog posts earlier in the week. Mr Keating argues:

What is needed is a new global economic and political settlement. The first priority should be to make the G20 a permanent gathering. The leaders should meet at least once a year and, in current circumstances , twice. A permanent G20 structure, representative of the major debtor and creditor countries and the most strategically powerful ones, will sound the death knell of the Group of Seven leading industrialised nations. This is two decades too late, but better late than never.

The first two sentences, in the context of an altered global order, are undeniably sound. Ideally, the G20 should be institutionalised with a secretariat to give it the coherence it has lacked since its formation in the aftermath of the Asian and Russian financial crises a decade ago. But far from heralding the end of the G7, a broader concert of powers makes a developed democratic concert more important than ever. A coordinated position of the developed democracies is the best hope of nudging the G20 towards stricter measures concerning nuclear proliferation, the environment and human rights. It is also the best hope of lending coherence to the G20 even on issues with a basic consensus - with 20 countries to bring on board for any measure, prior agreement between some of the more powerful members will naturally aid negotiation. The G7 should be deepened, and perhaps widened, but certainly not abolished.

Covert Grand Bargaining

America and Russia have both pooh-poohed talk of a "quid pro quo" deal to halt the missile defence project in Europe in exchange for Russian support for sanctions on Iran. If cooperation on neither of these matters is not forthcoming, it suggests that we are in for a period of renewed tensions between the old Cold War foes. But thankfully that isn't the sense emerging from Washington or Moscow at the moment at all.

Russian President Dimitri Medvedev is against a simple deal, but has not ruled out a broader set of agreements. His stated position is that “if we are talking about some sort of trade or exchange, then I can say that the question cannot be put that way – it’s not productive.” Which of course implies that if the question was phrased differently, it may well get positive response - one hopes that American diplomacy can manage a formulation a little more subtle. Indeed it already has, in the month-old letter from the incoming American administration which sparked the latest rebutals: “to the extent that we are lessening Iran’s commitment to nuclear weapons, then that reduces the pressure for or the need for a missile defence system”, is how the outline was described by American President Barack Obama. Strengthened sanctions for shelved shields is still a senario still firmly on the negotiating table. If this comes as part of a more complex set of understandings between the Russian and American governments then this would probably be a good thing.

G what?

The previous blog post discussed the need for a renewed concert of developed democracies. What, in practice would this look like?

Lets start with the existing G7: the US, Japan, Germany, the UK, France, Italy and Canada. Add in Spain, which today has a bigger GDP than Canada, and South Korea and Australia to take into account rich democratic Asia. Defining 'developed' as a GDP per capita of at least $25,000 per annum by purchasing power parity, and measuring clout by total nominal GDP, and we would thus have gathered together the world's ten most powerful developed democracies. Throw in a seat to represent the EU as a whole and that would leave us with a G11.

Such an arrangement would bring together two-fifths of global GDP and four-fifths of global military spending. Its purpose would be to coordinate policy among developed democracies to give their positions greater weight within the broader multilateral institutions now emerging, particularly in their areas of non-proliferation, But it would leave out developing democracies of increasing significance, most notably Brazil, India and South Africa. Most proposals for a concert of democracies are explicitly designed to bring these emerging powers on board. But this assumes that the foreign policy alignments of developing democracies are informed more by their 'democratic' nature than there 'developing' nature, and this is manifestly false. India, for example, is the world's largest democracy. But its desire to develop trumps concerns over the environment or qualms over support for the brutal regime in Myanmar, and it became the first country to distort its civilian nuclear industry for military purposes in the 1970s. India, looking out at the world, has more in common with autocratic emerging powers than the already developed democracies of Europe, North America or East Asia-Pacific. Then-President George Bush's attempts to tempt it into a new American orientation during his second term in office only succeeded in blurring and damaging the Non-Proliferation Treaty, not in affirming it.

This is not to say that the developed democracies should make any new group they form exclusive, except in terms of clout and goals. Mexico, Brazil, South Africa, India and so forth, should be allowed and indeed encouraged to join if they prove willing to push for non-proliferation, environmental protection and an end to human rights abuses worldwide, but these goals will get lost if such countries are begged to sign up for the sake of democratic-solidarity alone. Agreement on such goals cannot be taken as a simple corrolary of a democratic political system, even if the emerging democratic powers would prove an invaluable asset to their attainment should they use their influence to such ends. Until then, the developed democracies of the world must push such causes alone, and must organise to do so.

Keeping friends close, and relations closer

Characterising America's interests in East Asia last week following US Secretary of State Hilary Clinton's tour of the region and Japanese Premier Taro Aso's visit to Washington, Philip Stevens cast America's dealings with Japan as still its most important friendship in the region, but its dealings with China as nevertheless its most important relationship. If the ferocious recent growth of China doesn't prove Sisyphean, soon a similar framework will be established on a global scale: America's partnership with the developed democracies of the world will remain much closer than that with China, but that with China will have most bearing on the course of the world.

If we assess the major issues facing the global community - trade (and energy) security, economic crises, failed states, state conflict, terrorism, nuclear proliferation, climate change and human rights - there exists a rough consensus of rhetoric addressing them all among the major powers: even China pays lip service to 'democracy' and the rights of its people and others. But there is a dramatic sliding scale of agreement as to the significance and shape of appropriate policies in each of these areas. In practice, the Chinese leadership places states' rights inviolably above those of people, almost always sees the needs of development trumping those of the environment, and is much more sanguine about the prospect of a nuclear Iran. The governments of the developed democracies, meanwhile, typically give greater weight to each of these issues and advocate a much more proactive policy with respect to them. It is much easier for Europe, America, Japan and Australia to elaborate a common position concerning them than it is to bring China on board.

Over the weekend, the US and China held defence talks that signalled warmer relations between the two countries set to dominate the 21st century, and highlighted the areas where China is, in contrast, a much more willing partner. Discussions centred on anti-piracy operations off the coast of Somalia, where People's Liberation Army vessels have been operating since January - their first ever 'out of area' mission. Another important topic on the agenda was the security situation in Pakistan and Afghanistan - the first time bilateral Chinese-American talks on the region had been held. America is clearly hoping that China will become a responsible stakeholder in the world and is encouraging it in that direction - and so it should.

For the clout of Beijing to go untapped would be maddess. There are clearly issues on our list above - trade security, economic issues, failing states, conflict and terrorism - were there is a broader, if far from complete, pattern of agreement as to the neccesary steps the major powers must take to secure stability in the world. Such a situation points to the renewed concert of great powers that the G20 meeting in London in April seems to suggest is now emerging. But it would equally foolhardy to abandon completely heightened cooperation of developed democracies which has since the fall of the Soviet Bloc served as the de facto primary mechanism of global governance, with its institutional expression in the G7 and the Bretton Woods' institutions. For while it is neccesary than emerging powers are given a seat at the top tables as soon as possible, a corrolary to such a reordering is that if issues which usually lie beyond the strategic and development concerns of such powers are to be pushed, the developed world must find even stronger mechanisms to coordinate their positions on such issues. If we want progress on human rights, the environment and nuclear proliferation in the future, it is vital that the developed democracies of the world strengthen their own concert, on top of nuturing that of the world as a whole. We need a G20, but a G20 only makes a reinvigorated club of developed democracies more important than before.