The Continuing Question

So Deauville has come to end; on to the G20 in Cannes on November 4th-5th 2011.  But the continuing question here at the International Media Center, and among some of the delegates is – why the G8?  What is the added value and consequences of G8 discussions; what is the relevance and scope of the G8 agenda?  More pointedly – why hold a G8 meeting separate from a meeting of the G20 leaders?

Assessing the Deauville declaration the answer appears evident.  The strongest statement of the G8 leaders  – and critically including the the Russian president – we’ll see if Prime Minister Putin will go along – says:

Qaddafi and the Libyan government have failed to fulfill their responsibility to protect the Libyan population and have lost legitimacy.  He has no future in a free, democratic Libya.  He must go.

This statement could not have been concluded I anticipate at a G20 conclave.  Beyond that the G8 leaders focused on a number of critical peace and security issues including a commitment to the extension of the Global Partnership against the Spread of Weapons and Materials Destruction launched in 2002 – focused on the destruction of nuclear weapons in the former Soviet Union – but now focused on: nuclear  and radiological security, bio-security, scientist engagement, and facilitation of the implementation of UN Security Council Resolution 1540 on the trafficking of WMD by  terrorists  Extension of funding needs still is required along with securing new partners but the commitment is a significant step in the global efforts in anti-proliferation.

These two elements of the peace and security agenda – the accepted mandate of the G8 suggest the dilemma inherent in identifying the areas of G8 competence.  Libya and the democracy process in the Middle East probably could not usefully be addressed in the larger G20 leadership – as noted earlier.  But the proliferation questions could very easily be dealt with in the larger leadership forum.  Many of the near economic issues – like economic promotion in the Middle East etc., probably could also be addressed there.

Then why the split.  Well obviously it is partly historical.  The G8 has existed as a global governance institution for some time.  And international organizations are seldom killed off.  But there is more apparently.  Liz Alderman of the NYT summarized views from some of the  the G8 leaders at Deauville (“Group of 8 Pledges to Aid Egypt and Tunisia”,  NYT May 27, 2011)

But in their closed-door discussions, the G-8 members agreed that while emerging markets, especially China, were beneficial to global growth, they were not ready to take on a leadership role in major global issues, the diplomats said. Indeed, the G-8 members said emerging markets still needed to assume greater discipline and play more by the rules of the international frameworks they wish to influence, the diplomats said.

It is both unclear who said this – and indeed about whom.  We know China is positive about the G20 – and participating there.  We are confident most of the other leaders hold similar views.  But we also know that China, for example, does not want to expand the mandate of the G20.  And I have suggested elsewhere that China is still a part-time global leader. It would seem that other G8 leaders and their officials still question the willingness of G20 leaders to step up to take greater leadership.

For many – leaders included – this confirms the gap and the global governance deficit.

The Growing Domestic Constraint

The challenge to G8 leadership today – apparent here in Deauville at the G8 leaders summit – is not only the rise of the large emerging market economies – India, Brazil, China, etc., – but the growing constraint of domestic publics – on the leaders who are here in this Normandy summit location.  As Philip Stephens of the FT suggests in his column:

The demand for a strategic perspective is colliding ever more frequently with the day-to-day pressures of domestic politics. … The challenge is to square the enlightened internationalism that slips easily into a communique with a mood among electorates that has been turning against the notion of global interdependence.

The limits of collaboration are evident at this G8 summit meeting – most notably in providing economic support for the emerging democracies in the Middle East and North Africa (MENA).  The G8 will in their declaration announce the Deauville Partnership.  This partnership is built on two pillars – a political process that will support the democratic transition and foster government reforms; and an economic framework to encourage sustainable and inclusive growth including the creation of jobs especially for the young.

But the real question is the offer of economic and development support including from the multilateral development banks, the IFIs and bilateral support.  And it is in the bilateral support you can see the growing domestic constraints.  The US to this point has offered $1 billion in debt relief and a guarantee of another $1 billion in loans for Egypt.  The EU Commission has announced an extra $1.75 billion – from its neighborhood policy.  The UK is offering $180 million over four years including around $15 million a year to to promote democracy.  It is still  unclear what other G8 countries will offer new monies for Egypt and Tunisia and also others.

These numbers, if correct tell their own story. These are not fulsome amounts. And while the G8 leaders went out of their way to argue the summit was not a pledging session these numbers are paltry.  There is no appetite among the leaders of the G8 to be seen to advancing large sums of money for the Arab Spring while debt, budget cuts and unemployment dominate the domestic agenda.



Local or Global

Notwithstanding the mandate (?) the G8 – or more likely the G7  leaders – expressed concern over the consequences of a continuing debt crisis in Europe especially in Greece.  Apparently President Obama raised concern over the decline of the euro and the possible impact on US exports.

The Greek debt crisis highlights two features of the current global governance system.  First – and possibly rather obviously – the debt crisis in Greece reminds us how integrated the global economy is.  Debt in Greece impacts interest rate spreads in other European  countries namely the other PIIGS – Portugal, Ireland, Italy and Spain raising concern over their own significant debt loads.  And with American concerns over exports there is a corresponding concern in Europe over the sustainability of the debt load in the United States.

The second – maybe less obvious feature of the crisis – seems to suggest the opposite of this tight interdependence  – where should the locus of  debt resolution lie. The Europeans have involved the IMF in the debt crisis.  The IMF has much experience in dealing with debt and the threat of sovereign default.  But the IMF should not be drawn in to guarantee Greek debt.  For the nub of the Greek debt problem is the unwillingness of the Europeans – principally the French and the Germans – to reschedule Greek debt.   The problem is political.  The  Europeans have put off resolving the rescheduling of the Greek debt. Dealing with this problem requires the institutions holding the debt – mainly French and German banks – to take a “haircut”.  Thus the Greek debt issue is principally a European one.  Neither the G8 states – nor the G20 states – or the IFIs, need to be dragged into financially supporting this European debt problem.

Let’s not turn the IFIs and others into the Irish government saving the Irish banks from rescheduling.

One Conspiracy Theory Too Many

These last few weeks have seen more than one fall from grace for prominent men. There is a serious competition for who has fallen the fastest! Under normal circumstances ex-California Governor Arnold Schwarzenegger would grab the prize. In a unique script, Maria Shriver went on the Oprah show to tell her side of the drama  – a story worthy of a Jackie Collins novel.

Yet, having been in Paris for the last few days, the Schwarzenegger story is totally overwhelmed by the Dominique Strauss-Kahn or DSK story.  This is a scandal that reverberates well beyond just the $3000 hotel room in NYC:  serious implications for the running of the IMF; the spillover of the debt crisis in Greece and other European countries; and the impact of one of the scandals on presidential politics in France.

The DSK story can be framed as an elite controversy, complete with a supportive wife (Anne Sinclair) who is a celebrity in France in her own right. But the controversy also reveals societal attitudes: whether described as an accusative or abuse of power theme; or a defensive – “he was framed by some unknown forces” – theme.

But in Europe these serious moral missteps have a competitor. This is the scandal of a Manchester United player who reputedly not only had an affair with a minor celebrity but tried to have his lawyers gag the UK media from publishing the allegations, only to be ‘outed’ by thousands of Twitter feeds – an interesting twist itself given the attention supposedly of the G8 on the Internet.

The magnitude of this story is enlarged by the fact that Manchester United is playing in the Champions League Final this weekend against Barcelona. What jumps out for this Celebrity blogger is the fundamental difference between the two teams in terms of image projection. Before turning to AON in 2009 – a large insurance company – Manchester United was sponsored by AIG – another large insurance company and one the biggest ‘stars’ of the 2008 financial crisis.

Barcelona by contrast has UNICEF on the team jersey. This has led to some jibes by other teams about the advantages of this ‘good guy’ status – an attitude most recently expressed by the Real Madrid manager Jose Mourinho’s – who alleged that the UNICEF sponsorship led the European football association to favor Barcelona.  This conspiracy view (no less that in the DSK case) appears to this Celebrity blogger as rather ridiculous! Support for a UN organization and worthy causes should be applauded. However, even Barcelona may suffer a fall from grace as its sponsorship by UNICEF runs out next year.

Another Priority Topic

It wasn’t on the original agenda – again.  But it has gripped discussion – okay maybe gossip –  here at the international media center (IMC): the nomination of Christine Lagarde for the IMF top post and whether this nomination is a “slam dunk” or will the newly emerging states resist the European effort to name her the managing director.

The G8 leaders are in a bit of box.  The calendar is not in their favor.  If this were a G20 assemblage as opposed to a G8 summit, there would be less of a dilemma.  Leaders would then include China, Brazil and India especially but also Korea, Indonesia and Turkey – newly emerging market states.  A public statement in such a meeting, were it to come, would represent a broader expression of opinion and policy than is possible at the G8 with only the traditional leaders in attendance.

But there is no G20 meeting.  It is a G8 gathering of leaders and the host is France. Needless to say President Sarkozy is a strong advocate for the accession of Lagarde.  And there is little doubt that the host will seek to encourage a statement of support for her.

Such a statement would be a mistake I fear.  There is strong sentiment in the large emerging market countries that alternative nominations – including those from the emerging market countries – such as Augustin Carstens,  the Mexican central bank head, Trevor Manuel former finance minister of  South Africa and Tharman Shanmugaratnam, the current finance minister of Singapore – be promoted.  These countries do not want to simply accede to the French effort to promote the current finance minister of France.

The bottom line – a collective expression of G7/8 support would appear to sanction “same old; same old”.  The G7/8 should avoid this even if Largarde is the right candidate – at least for now.

Looking for a Purpose – The Search in Deauville

Well my colleagues David Bosco from Foreign Policy at the Multilateralist and Stewart Patrick from the new Internationalist at Council of Foreign Relations – have suddenly discovered that the G8 is upon us.Stewart has decided that notwithstanding its “declared death” in 2009 – lo it is still here.  He ends his post this way:  “But the Deauville agenda suggests there is life in the ole G8 yet.”

Well I beg to differ as the title would suggest.  The French have just released for the Summit – nothing like being here may I add – and it is gorgeous here in Deauville – the  priorities for this G8 Summit.  The old priorities were:  Innovation and Green Technology, African Development and Peace and Security including Afghanistan and other crisis points.  In the most recent release  the identified top 3 priorities are the Arab Spring, the progress of democracy in Africa and the Internet.

Furthermore  – and for good measure – the French hosts have declared that the Summit will start with an expression of solidarity for Japan and the leaders will draw lessons from the disaster at Fukushima – the debate over nuclear safety. Finally, the Leaders will discuss the global economic situation and the major political issues.

Obviously there is great flux in international relations and the French are trying to respond to a moving target.  But if the Priorities can be altered like this the question is did the French and the G8 have significant matters in their “gun sites” earlier.

This feels like a Summit looking for a reason.

Looking for Just the Right Royal Charity

Two major events confirm the star power of the British Royal Family. The first, of course, was the glamorous wedding of Prince William and Kate Middleton (with major support from Prince Harry and Pippa, Kate’s younger sister), an event that is still powering the output of the global soft media. The second event is upcoming.  This is first state visit by a serving British monarch to Ireland since independence in 1921. As one noted professor of Irish history told the Financial Times, the image of the Royals is no long that of an agent of coercive but celebrity power: “My students don’t associate the monarchy with the Northern Island Troubles, they think of the royal family as pop stars.”

Yet, despite this apparent transformed image of the Royal Family, it is interesting to see how connected with state institutions are many of the philanthropic interests of even these younger generation of Royals. The list of charities Will and Kate identified for possible donations in the context of their wedding included: Combat Stress, Bereavement Care for Children of Forces’ Families, Household Cavalry Benevolent Fund, Irish Guards Appeal, Army Widows Association, and the Royal Air Force Benevolent Fund. Harry, William’s younger brother is well known for his support of Help For Heroes, a charity aimed at helping injured service personnel returning from Iraq and Afghanistan.

Yet the extended list reveals the hybrid nature of the young Royals concerns –  a mix that demonstrates very strongly the fact that they are influenced not only by state interests but also by the non-conformist interests made so identifiable by their mother – Princess Dianna.

After her divorce from Prince Charles, Princess Di’s aim was to become a roving goodwill ambassador for Britain – a role she played on a few well-publicized trips to Argentina (1995) and Pakistan (1996). However, the conservative establishment was never going to allow Diana to perform in this fashion, fearing that she would act as a “loose cannon”.

Shut out of official diplomacy, Princess Diana found the perfect role for herself on the anti-personnel landmines campaign working with the Red Cross and the HALO Trust. The 1997 pictures of Princess Diana on the front lines of this campaign in Angola serve as an iconic moment in celebrity diplomacy.

Prince Harry lists the HALO Trust as one of the charities he supports. William follows in his mother’s footsteps in a number of causes, including taking on the position as the Patron of Centrepoint, the UK’s leading homelessness charity.

The big question that this guest blogger asks is whether the young Royals can achieve a balance between their state connected activities and a more diverse community-oriented form of engagement? Or, will the Royals be unable to maintain a reasonable balance?

Given the extent of the star power of the Royals, the trajectory of their choices will have a decided spillover effect into the wider world of celebrity activism.

To Jaw-Jaw is Always Better than to War-War

You know I think that we – the global media and so-called global governance experts and even officials – sometimes forget the value of former Prime Minister Winston Churchill’s statement (identified in the title) expressed at the White House in 1954.

So I acknowledge it before trying to assess the deliverable from the Third S&ED, the “US-China Comprehensive Framework for Promoting Strong, Sustainable, and Balanced Growth and Economic Cooperation” (Framework) – I won’t even try an acronym for this one.  But the Framework is the the document signed by US Secretary of the Treasury Timothy Geithner and China’s Vice Premier Wang Qishan.

Yes, there is much in the way of diplomatic words and commitments.  In other words – “blah, blah, blah”.  But two things of significance stand out.  The first is how in the Framework China and the US ackknowledge that the two are highly interdependent.  Among several paragraphs here is one that stands out.

Each country recognizes that the health and continued growth of the other’s economy is indispensible to its own prosperity.

And they express an understanding in addition that the two have a significant impact on the global economy:

As the two largest economies in the world, economic outcomes and policy actions in the United States and China have a significant impact on the health of the global economy.  The United States and China recognize and take into account the impact  their policies have on the global economy, and cooperate to strengthen the international trade and financial institutions that support global growth and stability.

These paragraphs and others underline how Chinese leaders – at least the economic ones – recognize that  “interdependence” – not unilateral action is the dynamic of economic policy action.  It suggests that leaders have an understanding that national interest may be at the heart of their actions but that national interest alone will be insufficient to secure economic growth and prosperity.

In reaction to my friends then – yes I mean Arthur Stein and in particular Richard Rosecrance, who fret over the parallels between the German- British relationship after 1905 and the current US-China relationship – I think the difference is significant.

The second aspect of the Framework that stands out is the recognition of the importance of the G20 complex in giving a setting to deal with the global economy.

6. The two countries reiterate their support for the G-20 Framework for Strong, Sustainable, and Balanced Growth and reaffirm their commitments to improve the living standards of our citizens through strong economic economic and jobs growth, and to use the full range of policies to strengthen the global recovery and to reduce excessive external imbalances and maintain current account imbalances at sustainable levels.  The United States and China affirm active support for the mutual assessment process of the G-20.

15. China and the United States commit to deepen their cooperation to ensure financial sector stability and strengthened financial sector regulation and supervision, both bilaterally and in the G-20, the Financial Stability Board, and international standard-setting bodies.

17. The two countries pledge to strengthen communication and coordination and to support a bigger role for the G-20 in international economic and financial affairs.

The paragraphs above reveal that the two powers are prepared to work within the multilateral policy framework being hammered out by the IMF, the G20 finance ministers and in the Framework Working Group and additionally the two at least in this document avoid the excessive reliance on bilateral discussions.  This is important in part because a bilateral economic discussions have been pitched, on the one side, to a critique of Federal Reserve policy of quantitative easing and on the other on currency manipulation of the renminbi.  That discussion is partial and also rather toxic – unhelpful in actually dealing with the global imbalances that generate instability and volatility in the global economy.

My advice to my colleagues – especially in the media – who are so quick to declare these discussions a waste of time and unproductive – remember our friend  Churchill and the value of “jaw-jaw”.

Fear of Clapping with One Hand

Today, Monday and tomorrow the so-called G-2 are meeting in Washington.  This is the third round of the US-China Security and Economic Dialogue (S&ED).  Led by Timothy Geithner Secretary of the Treasury and Secretary of State Hillary Clinton on the US side and Vice Premier Wang Qishan and State Councilor Dai Bingguo on the Chinese side, this meeting, as with others, is designed with the hope and intent for these two powers to engage on issues of concern to both.

The S&ED has come to involve numerous officials from each country – a major encounter of Chinese (20 agencies) and American (16 agencies) officials.  Notwithstanding the large – possibly overlarge – array of officials and regulators, past meeting have produced little in the way of concrete results.  But the hope remains that this immediate gathering will advance discussions on critical issues – currency, debt, human rights, Korea and Iran.

Let’s see tomorrow.


Is it America or is it the Liberal World Order That is Passing

[Editor’s note:  I’d like to thank Arthur Stein, UCLA and Richard Rosecrance, Harvard for the early discussions we held on the issues raised in this blog post.  They are not responsible for any of the opinions expressed here. ASA]

Pronouncements of American decline miss the real transformation under way today. What is occurring is not American decline but a dynamic process in which other states are catching up and growing more connected.

The above excerpt is the opening to the concluding section of John Ikenberry’s precis – his article in the recent May/June edition of Foreign Affairs, “The Future of the Liberal World:  Internationalism After America”  of his most recent book, Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order.

It may well be that a final evaluation of Ikenberry’s examination of the evolving global governance system will require a close reading of the book.  But for the moment let me assume that this FA is a relevant summary of the Liberal Leviathan’s thesis.

The question that John poses is whether we are witnessing  just the decline of the United States – or I suppose slightly more correctly the ‘rise of the rest’ – or, in fact, we are also witnessing the decline of the liberal world order promoted most fiercely by the United States. If the latter is true then the global order will not only look less American but less liberal. As the newly emerging states become more central to the world order, they will bring a more illiberal – less open, less rules-based and less democratic – world order.  As John identifies this:

Rather, the struggle will be between those who want to renew and expand today’s system of multilateral governance arrangements and those who want to move to a less cooperative order built on spheres of influence.

The global governance system of the future will be more fragmented, less multilateral and more mercantilist.  But John argues that this is not the future of the international order.  And he suggests this more illberal outcome is not necessarily in our future by  distinguishing and separating the current multilateral order from the United States.  So while the global governance system has been built by the United States and supported by its traditional allies, liberal internationalism, “openness and rule-based relations enshrined in institutions such as the United Nations and norms such as multilateralism” will continue to exist without the United States as the hegemon. While the US, according to John, will not rule in the way it has in the decades since World War II, it will still be able to lead – and presumably it will do so.  And the reason for this is:  the rising powers – the Chinas, Brazils and Indias – are also wed to the global governance order of liberal internationalism.

For John the current global order is built on two ordering principles – the first  built on the evolution of states and the principles of state sovereignty and and norms of more or less collaborative great power relations.  And the second is built on the liberal order of a open, rules-based and and democratic international order.  Indeed the building of the state system was necessary for the building of the second – the liberal order.

Now international relations specialist have long debated whether a hegemon – the UK in the 19th century and the United States in the second half of the twentieth century – is a necessary element for maintaining a liberal order.  With John’s identified bifurcation, we need to determine whether the evolving international system of great powers is able to maintain a stable international order and to promote a liberal order.

John is certainly right that there is no strong evidence that the current Chinese leadership – the exemplar of the newly arrived rising states – rejects either element of the order – that is collaborative great power relations and as well a liberal order of open trade and a rules-based system.  But not having rejected the order as it currently exists is not the same thing as saying the Chinese leadership accepts and is prepared promote these norms and mechanisms of the global order.  And it it is possible that China might accept one principle – say great power stability – and yet fail to promote the other – the liberal order.  John acknowledges that stability is required for a liberal order.  But could it be that the evolving system may promote stability and great power accomodation – of a rather classic form – without necessarily promoting or even maintaining the current liberal order.

Where is the Chinese leadership?  There is no question that China has benefited dramatically from both elements of the order – international stability and openness – but China’s emergence as a great power and the perception – and I emphasize perception of US decline – may have led some of China’s current leaders to reassess China’s place in the global order and reflect on how it must act or indeed how others – especially the United States – must act.  Further, the perception of decline worryingly may have “infected” the next generation of leadership that will assume leadership in another year.

Let me look briefly at the second element of the current order – its Liberal nature.  Certainly China has become deeply integrated in the international economy – and that the degree of integration contrasts vividly with other rising powers of earlier decades.  But many suggest that China has dramatically benefited from advantages not employed by others.  China’s export trade policy has driven its economic growth – and it has been a boon to US multinational corporations as well, might I say – but the imbalances generated in the system are creating volatility and instability.  And it would appear the leadership – notwithstanding all the statements of a turn to a more domestic consumption-based model – is unwilling to abandon the export growth model that brought it such rapid economic growth.  Remember the leadership believes that it is essential to maintain high growth to avoid social unrest.

And as for democracy, the Party appears to determined to maintain one-party rule notwithstanding that the rule of law and democratic practices are the foundation of modernity.  While democracy may be the ideal there appears to be no appetite for it among the current leadership and there is nothing to suggest that the coming new generation of leadership is in any degree more enticed by the ideal notwithstanding the rise of a middle class in China. As a punctuation mark it is clear that China does not accept humanitarian intervention the newest aspect internationally of the liberal world order.

And as for multilateralism and the acceptance of restraint and collaborative great power relations, the signs are there but unilateralism and regional dominance have not disappeared from Chinese policy.  Just when you think the Chinese have accepted collaborative great power relations and multilateralism, there are the behaviors, or lack of behaviors, over Korea, the South China Seas and military – to – military relations with the US.

So there is a large question mark and not an explanation mark on Chinese policy and its support for a liberal order.  But the question of the passing of a liberal order is not just to be laid at the doorstep of China.  It is also a question mark  that now lies over US policy.  The continuing illiberalism over trade policy – the assertion continuously of a lack of a level playing field   – is a marked contrast in US foreign policy to earlier periods of liberal leadership.  The so-called “leading from behind” strategy – whatever that is – of the current US Administration leads to rising questions of US leadership – not just rule.  The chaos of domestic politics that undermines the prospect of the US dealing with its fiscal situation also raises concern that it will – and maybe cannot lead.

The saving element of this particular question – the maintenance of a liberal order, may come down to definition.  As one of my close colleagues Arthur Stein from UCLA asks “What is the liberal order?”  Maybe just as we have built a literature that examines the varieties of capitalism, so, according to Arthur, we must try and determine the varieties of liberalism that may still represent an international liberal order.   It may still be a liberal order notwithstanding more managed exchange rates and new rules on capital controls.  Or maybe not.

So the question of what is recognized as a liberal order may strongly influence whether we we are able to assess whether a liberal order can be maintained with or without the United States.  The likely reality is that the liberal order is not just built on US leadership but it surely includes US leadership.  It is a more open question whether we need China and others to sustain the liberal order.  But it too is a question that needs to be answered.

The liberal order – however defined – may survive China’s growing great power presence,  but I think it quite possible that without US participation not only will US leadership disappear but also the liberal order it built over the decades.  Then the remaining question will be, can we retain collaborative and accommodative great power relations.



The agenda for the renewal of the liberal international order should be driven by this same imperative: to reinforce the capacities of national governments to govern and
achieve their economic and security goals. … In this new age of international
order, the United States will not be able to rule. But it can still lead.