Twenty good fellows

Narendra Modi, India’s prime minister, greets members of the media during the closing of the Group of 20 (G-20) Leaders Summit in New Delhi, India, on Sunday, Sept. 10, 2023. Xi Jinping’s decision to stay away from this weekend’s Group of 20 summit may have been intended to deny India its moment. Instead, Prime Minister Narendra Modi — along with the US and Europe — figured out how to more effectively counter China on the world stage Photographer: Prakash Singh/Bloomberg

The recently concluded Group of 20 (G20) summit held in India was a diplomatic success. The meeting adopted a consensus declaration that committed the bloc to action on several issues, including food and energy security, climate change and global debt vulnerabilities. On a geopolitical front scarred by the Ukraine war, India was able to get members to sign on to a common statement that denounced the use of force for territorial gain.

However, the statement did not mention Russia as the aggressor in Ukraine, leading its Foreign Minister Sergei Lavrov, who was standing in for President Vladimir Putin, to declare that his country was “able to prevent the West’s attempts to ‘Ukrainise’ the summit agenda”. Ukraine was predictably upset at this outcome, in which India had been able to steer the G20 away from being held hostage by a single issue.

Domestically, Indian Prime Minister Narendra Modi has earned credit for having hosted a summit that announced his country’s diplomatic coming of age, and if he reaps dividends from this achievement in the upcoming general election, he deserves every ounce of that credit. Chinese President Xi Jinping skipped the summit, sending Premier Li Qiang in his place.

The absence might or might not have been intended as a diplomatic slight, since China and India are locked in a bitter territorial dispute that flares into ugly violence occasionally. But Beijing welcomed the Delhi Declaration, saying that it sent a positive signal to the world. US President Joe Biden gladly attended the summit in an effusive affirmation of his country’s support for the G20’s goals. The African Union joined the grouping in Delhi in an indication of the present members’ desire to expand their territorial footprint. Clearly, African representation would extend that footprint by a continent.

Is all this too good to be true? Not really. The G20 is making waves because it stands between two other economic organisations, neither of which is capable of determining the course of world affairs.

The first organisation is the Group of Seven. The Council on Foreign Relations (CFR), a premier American think tank, captures the G7’s global purpose nicely: “The G7 is an informal bloc of industrialised democracies — the US, Canada, France, Germany, Italy, Japan and the UK — that meets annually to discuss issues such as global economic governance, international security, and energy policy. Proponents say the forum’s small and relatively homogenous membership promotes collective decision-making, but critics note that it often lacks follow-through and excludes important emerging powers.” (The European Union too is a member but it is not a country.)

Indeed so, and not only that. The G7 is the economic counterpart of the military alliance, the North Atlantic Treaty Organization (Nato). Both organisations seek to protect and promote the international status quo produced at the end of World War II, in which the Allied forces (led by the United States) prevailed over the Axis forces (led by Nazi Germany) to set up a world order contested by the Soviet Union. The Soviet Union’s implosion in 1991 made the G7 the primary driver of the global political economy whose militarised edge was represented by Nato. Russia, the rump state of the Soviet Union, belonged to the G7 from 1998 till 2014, a period when the bloc was known as the Group of Eight (G8), but Russia was suspended following its annexation of Ukraine’s Crimea. The G7’s expansion into the G8 was thwarted by Russia’s assertion of its national interests after its strategic honeymoon with the West ended because of Nato’s eastward expansion, which threatened Russia’s power and influence in the former countries of Eastern Europe and its historical legacy as the chief Slavic power in the world.’

The G7 remains powerful but it is not all-powerful. If the G7 represents the military-industrial apex of the global pyramid, Brics represents its expanding base. The acronym stands for Brazil, Russia, India, China and South Africa. They are essentially developing nations, unlike the industrialised democracies of the G7. In August, the bloc decided to admit Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates (UAE) to signal its opposition to an outdated world order.

Brics is an interesting organisation. Its composition reflects the realities of countries which do not belong to the charmed circle of nations which were victorious at the end of World War II and the beginning of the Cold War between the United States and the Soviet Union. Brics is a collection of emergent economies which will make the critical difference if the world leaves behind the legacies of those two wars and decides how economic power is to be shared among nations.

The operative words in the last sentence are “will make”, “if” and “leaves behind”. The first and third words are placed in the future, with the intervening conjunction, “if”, emphasising the conditionality of the prospects of Brics. At the moment, there is no prospect of the G7 being displaced by Brics.

True, both the rising economic powers, China and India, are not a part of the G7 and are the leading lights of Brics. However, Sino-Indian relations are bedevilled by fundamental strategic rivalry over their leadership of Asia, a gulf so deep as to make it unlikely that Brics can cohere as a credible bloc in international relations. By contrast, the G7 is led by the United States, still the largest economy in the world, whose occasional differences with fellow G7 members are not so visceral as to undermine the global clout of the grouping.

This is where the G20 comes in as a stabilising force in the transition from the 20th-century world of the G7 to the century of Brics, if and when it appears.

Broad distribution of global economic power

The G20 (which will expand when the African Union becomes a member formally) consists of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union. Thus, it contains every member of the G7 and Brics (with the exception of Egypt, Ethiopia, Iran and the UAE).

The G20’s composition thus reflects the broad distribution of global economic power today. Of course, it possesses neither the strategic coherence of the G7 nor the countervailing ambitions of Brics. What the G20 does is to remind everyone of contemporary global necessity in which an old Euro-American economic and strategic order is yet to die and an alternative order is yet to emerge. Since the world has to live in the here and now, rather than what it might (or might not) wish to have in the future, the G20 exists as a transitional reality.

It is an extremely powerful reality. The CFR notes that taken together, the nations of the G20 account for around 80% of global economic output, nearly 75% of global exports, and about 60% of the world’s population. Importantly, the council adds that these figures have remained relatively stable while the corresponding rates for G7 nations have shrunk “as larger emerging markets take up a relatively greater share of the world’s economy”.

Some observers warn that a “G-Zero” world is emerging, one in which countries pursue their interests all by themselves or form ad hoc coalitions. It is precisely because of this threat that permanent multilateral institutions are important: they prevent economic fragmentation.

If anything, the G20’s global worth is enhanced because economic competition between the great powers, particularly the US and China, threatens an international order based on the principles of the World Trade Organization, principles that seek to reduce tariffs and other trade barriers. The G20’s adherence to those principles creates a buffer between the world’s economic giants for the rest of humanity to inhabit. In particular, the participation of developing nations in the G20 makes it an essential platform for vast swathes of humanity to articulate their concerns.

The challenge for the G20 is an old one: Is it an arrangement or an organisation? If an arrangement, it will disappear as centrifugal pulls reveal irreconcilable differences among its members. If an organisation represents something more than the aggregate of its members, the G20 will stand for a fairer world in which the chief drivers of growth pull along the slower nations.

It would be good if the G20 found a mechanism to subsume political differences among its members to the common need to build an economically and ecologically sustainable world. Rivalries would continue even in that world, but they would do so at a higher level of economic existence.

Not a bad idea.

The writer is founder and CEO of Pereira International, a Singapore-based political and strategic advisory consulting firm. An award-winning journalist and a graduate alumnus of the Kennedy School of Government at Harvard University, he is also a member of the Board of International Councillors at the Center for Strategic and International Studies in Washington DC. The Board is chaired by the global statesman, Dr Henry A Kissinger, the former US Secretary of State and a Nobel Peace Prize winner. This article reflects the writer’s personal views

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