The recently concluded 28th and 29th ASEAN Summits in Vientiane, Laos again saw ASEAN give a muted response to the more contentious issues facing member states. This is largely a result of conflicting national interests between members in the absence of a cohesive framework to deal with such issues.
The global financial crisis raised critical questions about how international policy frameworks monitor, regulate and manage global liquidity. Liquidity is a public good and the international financial system is immediately affected by its excessive volatility. The G20 has been struggling for some time to come up with answers.
They have focused on an important array of banking and financial reforms but have stopped well short of addressing the fundamental problem of calibrating global liquidity to meet the needs of the global economy.
In Hangzhou, China began the push for G20 to overcome protectionism and fuel global growth prospects. That is vital to reverse stagnation in advanced economies and slowdown in emerging nations.
On September 4-5, the leaders of the G20 economies met in Hangzhou. The summit had great symbolic importance that was easily understood in emerging economies but largely ignored in advanced economies.
Vientiane will host the 28th ASEAN Summit this week, with the summit documents rotating around the same themes that ASEAN has been promoting for decades: unity and centrality. The worry, both at the upcoming summit and beyond, is that there is little effort to put substance into these goals.
Brazil, Russia, India, China and South Africa (BRICS) have existed as a coherent economic group since 2009. They represent approximately 40 percent of the world population, generate approximately 20 percent of world output, have accounted for 50 percent of global growth since the end of 2009 and play a crucial role in developing industries dominated by global value chains.
The G20 has become the key vehicle for implementing and promoting global economic governance. China is set to host this year’s G20 summit in Hangzhou on 4–5 September.
What can we expect from the G20 under China’s leadership?
As China assumes leadership in the grouping, Beijing a wants greater role for Africa and the developing world in the G20.
When China’s Foreign Minister Wang Yi spoke in the Hangzhou Summit in May, he made it clear that Beijing intends to cooperate with other G20 countries to deliver ten outcomes. One of these focuses on Africa.
More than seven decades after 1945, international multilateral organizations continue to represent the victors of World War II, not the economic powerhouses of the 21st century. However, change is in the air.
The Permanent Court of Arbitration (PCA) judgement on the South China Sea ruled that there is no legal basis for Chinese ‘historical rights’ within its claimed nine-dash line. China did not accept the judgement and has instead continued its maritime and aerial activities in the region.
In December 2015, China announced that its priorities for the upcoming G20 Hangzhou summit were to make the global economy more innovative, invigorated, interconnected and inclusive. However, China is struggling to deliver practical outcomes in these areas because many of them are challenging domestic issues that lack a global focus.
Luckily, G20 finance ministers and trade ministers identified practical outcomes on the global financial safety net, growth and trade, which could be delivered, provided China is willing to broaden its priorities.
