Globalisation
The G20 economies agreed in their declaration to pace interest rate rises to avoid spillovers and warned of ‘increased volatility’ in currency moves. “Food security will be a major issue for this G20 summit,” Lipsky accurately predicted, “so Ukraine will be addressed in that way in terms of opening up ports and getting food out to those who need it and deciding what money the G20 can commit.” At the summit, the leaders promised to take coordinated action to address food security challenges and praised the Black Sea Grain Initiative, which is a Turkish-brokered agreement to safely transport food from key Ukrainian ports. As for climate change, the Bali joint statement issued on the Wednesday of the summit was non- committal at best. The G20 leaders, somewhat preoccupied by developments in Ukraine, made a joint promise to “pursue efforts to limit the rise in global temperatures”. While this statement confirms their commitment to stand by the Paris Agreement, the climate emergency was always likely to be discussed in more depth at the Cop27 event in Egypt. For their part, Biden and Xi agreed to resume cooperation on climate change.
Bali and beyond In theory, the real benefactor of the G20 should have been Indonesia. As the fourth largest country in the world by population, with the tenth largest economy in terms of purchasing power parity, “Indonesia is probably the largest country in the world to still get very little media attention”. As Vasuki Shastry, associate fellow of the Asia-Pacific programme at Chatham House, continues: “The summit will raise attention on [Indonesia’s] own successes as a democracy as well as in trade and investment”. As Lipsky was correct in saying, this wasn’t the G20 that “Jokowi signed up for”. All the same, it certainly provided an opportunity for the country to project its economic and social strength to the world media, and to prove its potential as a leading contributor to the global economy. That’s just as well. When compared with Vietnam, after all, Indonesia still falls short when it comes to attracting global investment. Shastry sees this as a crucial area to address if Indonesia is to join the world stage. He also sees huge potential for Indonesia to place itself at the forefront of climate change solutions. Along with Brazil, Indonesia boasts some of the world’s largest rainforest reserves, which are depleting at an alarming rate. For that reason, if nothing else, Shastry hoped to see the country position itself as a leader at Cop27. The G20 summit providing Indonesia with just such an opportunity is one of many reasons why every expert I spoke to still believes in the body’s intrinsic value. Mark hoped that this year’s meeting would provide “new impetus to the grouping in a
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world that has become more complicated with a multipolar community”. Engels makes a similar point, stressing that, when the G20 reaches an agreement on certain priorities and measures, it has the power to exponentially boost results. Lipsky, on the other hand, hopes for more tangible reform to the existing body, and wants to see those changes in place before India hosts the event next year. He believes it’s time to invite new members into the group and finally live up to its original purpose – to represent the 20 largest economies in the world. At present, this is no longer the case. Argentina ranks 30th by GDP and owes its membership, Lipsky explains, to a “US fear in the late 1990s that the country would have its own version of the 1994 Mexican peso crisis”. In contrast, countries such as Poland, Nigeria and Thailand – not “randomly selected” Lipsky is careful to add – all have larger economies than some of the current G20 members, and could all bring “welcome new perspectives into the group”. But how many voices are too many? It’s a question worth asking. The UN, though set up with a different purpose to the G20, is largely thought of as too large to create tangible and productive change to global policy – as seen by the countless failed attempts to bring about peace between Russia and Ukraine. The G7, in contrast, is too small and reduces the voice of the global economy to a few dominant powers. For Lipsky, welcoming the dynamism and younger demographics of leading, albeit forgotten, economies, is what’s needed to reform the current tired framework. Adding five more members would bring the G20’s share of global GDP back over 90%, which it was when the first leadership-level summit was held in 2008. This call for change is something India would do well to take note of – especially after such a tumultuous and closely watched meet- up in Indonesia. ●
Charles Michel, President of the European Council, attended the G20 summit in Bali, Indonesia.
90% Josh Lipsky 1999
The year the G20 was first formed.
G20 35
The percentage of global GDP that the G20 would represent if five more members were added.
miron82/
Shutterstock.com
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