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The Trouble with Today’s Multilateralism: An Intro

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So in this week’s Post I was all set to hone in on the struggles over reenergizing faltering multilateralism in the current global order. Today’s  troubles encompass the formal institutions – the Formals – from the UN, and many of its specialized agencies to the international financial ones – the World Bank, the IMF and the WTO. And the troubles extend to the Informals, the G7, the G20 to the BRICS+ and more. The struggles over multilateralism are the flip side of the return, seemingly ever more strongly power politics – the wars in the Ukraine and Gaza, and geopolitics, especially the rise in bilateral tensions between China and the United States.

But before I could go there, I couldn’t ignore the just excellent article – recommended by my colleague, and China expert, John Gruetzner – in Foreign Affairs by Zongyuan Zoe Liu, titled, “China’s Real Economic Crisis: Why Beijing Won’t Give Up on a Failing Model”. This very good piece leaned strongly into the discussion I had raised in my previous Alan’s Newsletter Post, ‘China, Seemingly, Stays the Course’. The Post chronicled the disappointment expressed by analysts and experts in the West primarily but in a rather more modulated form in China as well. The disappointment according to these experts emerged over the failure in the Third Plenum to initiate significant economic reform in the Chinese domestic economy and a clear determination to tackle domestic consumption.

Liu gets it right:

The Chinese economy is stuck. … But there is a more enduring driver of the present stasis, one that runs deeper than Xi’s growing authoritarianism or the effects of a crashing property market: a decades-old economic strategy that privileges industrial production over all else, an approach that, over time, has resulted in enormous structural overcapacity.

 

Simply put, in many crucial economic sectors, China is producing far more output than it, or foreign markets, can sustainably absorb. As a result, the Chinese economy runs the risk of getting caught in a doom loop of falling prices, insolvency, factory closures, and, ultimately, job losses.

 

Since the mid-2010s, the problem has become a destabilizing force in international trade, as well. By creating a glut of supply in the global market for many goods, Chinese firms are pushing prices below the breakeven point for producers in other countries. In December 2023, European Commission President Ursula von der Leyen warned that excess Chinese production was causing “unsustainable” trade imbalances and accused Beijing of engaging in unfair trade practices by offloading ever-greater quantities of Chinese products onto the European market at cutthroat prices.

 

Despite vehement denials by Beijing, Chinese industrial policy has for decades led to recurring cycles of overcapacity. At home, factories in government-designated priority sectors of the economy routinely sell products below cost in order to satisfy local and national political goals.

Now there continues to be some contention over whether in fact production is below cost but I I was pleased by Liu’s ‘recommendation’ that the two – the West and China – consider options other than just piling on the tariffs. Liu correctly points out the negative consequences of such trade policy:

A China that is increasingly cut off from Western markets will have less to lose in a potential confrontation with the West—and, therefore, less motivation to de-escalate. As long as China is tightly bound to the United States and Europe through the trade of high-value goods that are not easily substitutable, the West will be far more effective in deterring the country from taking destabilizing actions. China and the United States are strategic competitors, not enemies; nonetheless, when it comes to U.S.-Chinese trade relations, there is wisdom in the old saying “Keep your friends close and your enemies closer.

That is why I have suggested negotiating – and one aspect in this case could be Voluntary Export Restraints or VERS. VERS are not super policy  actions – I get that  but they do encourage bilateral discussions rather than just unilateral penalties. As Liu suggest:

The U.S. government should discourage Beijing from building a wall that can sanction-proof the Chinese economy. To this end, the next administration should foster alliances, restore damaged multilateral institutions, and create new structures of interdependence that make isolation and self-sufficiency not only unattractive to China but also unattainable. A good place to start is by crafting more policies at the negotiation table, rather than merely imposing tariffs. … If the government [China] also implemented voluntary export controls, it could kill several birds with one stone: such a move would reduce trade and potentially even political tensions with the United States; it would force mature sectors to consolidate and become more sustainable; and it would help shift manufacturing capacity overseas, to serve target markets directly.

While working through the WTO might be preferable, and many analysts suggest such an approach for multilateral trade frictions, realistically that course of action is out of reach for the moment.

So there you are on the Third Plenum and global trade.  Let me at least turn to the original subject for this Post; let’s at least open the discussion on multilateralism and its problems. I was particularly attracted to a piece published recently by Pascal Lamy. Pascal Lamy (pascallamy.eu) is currently the Vice-President of the Paris Peace Forum, and coordinator of the Jacques Delors Institutes (Paris, Berlin, Brussels). Importantly, Pascal Lamy served two terms as Director General of the World Trade Organization (WTO) from September 2005 to September 2013. He is someone that is very familiar with critical aspects of the multilateral system. Recently his piece, ‘Reshaping the Global Order’ was published in a large edited volume by colleagues from the Center for China & Globalization, CCG,  Henry Huiyao Wang and Mabel Lu Miao, Enhancing Global Governance in a Fragmented World: Prospects, Issues, and the Role of China. Now Lamy sets out the critical structural issues that impair today’s multilateralism efforts. As he says:

The main long-term, structural factors at play can be summarized by sovereignty as a founding principle of an international order, by the obsolescence of the previous order, and by the US-China rivalry.

It is not surprising that he identifies ‘sovereignty’ as the first key to multilateralism’s problems:

Sovereignty has been, is, and will remain the main obstacle to building a fully fledged international order as long as it is accepted as the core principle of international law.

So many analysts acknowledge the burst in new actors in the international system: substate actors, regions and cities and also non-state actors like NGOs, large public and private corporations but all struggle against dominant state actors. National sovereignty dominates international relations and often leads to unilateral actions that undermines wider cooperation.

Then there is ‘obsolescence’.  This focuses around the elements of the system, especially the Formals that were put in place at the end of World War Two at a time when the Global South that has had such a recent impact on international relations existed primarily as colonies of the West:

Obsolescence has to do with the origins of the current global system, the architecture of which dates from arrangements made after the Second World War. The ‘universal’ nature of these arrangements is increasingly seen as a product of a past pattern of Western dominance at a time when new nation states are now reshuffling the old power distribution …

Lamy then targets the impact of the evolving international order:

All in all, the previous international order is being shaken by increasing North-South and East-West tensions and frustrations, and by a change in the balance between geoeconomics and geopolitics, the former losing the force it had gathered in recent decades, and the latter regaining its past dominance over world affairs. We are thus moving toward less of a rules-based system, and more toward the use of force. This context obliges us to consider new paths, tentative as they may be.

And finally Lamy underlines the rise of geopolitical tensions, especially between China and the United States, and the impact that these tensions have had on the current multilateral order:

The intensification of the US-China rivalry is the third main factor shaping the demise of the international order, as this rivalry increasingly pits the two main world superpowers against each other. Indeed, they now believe they have become dangerously vulnerable to each other—hence a change of view on both sides about globalization. Whereas the US and China previously celebrated the benefits of increased economic interdependence in fostering development and reducing poverty, they are now trying to address what today they consider as overdependence and have embarked on a decoupling journey which challenges the rest of the world with hard binary choices and which permeates international life in the form a sort of ‘cold war 2.0.’

So what is to be done? How can a multilateral system be revivified and made effective – bringing greater stability to the global order and energizing transnational global governance efforts?

That’s where we will start in the next Post.

Image Credit: Geneva Interdisciplinary Centre for Economics and Law

This Blog originally appeared as a Substack Post at Alan’s Newsletter – https://open.substack.com/pub/globalsummitryproject/p/the-trouble-with-todays-multilateralism?r=bj&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true

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A Notable Passing

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A passing of significant note. Our mentor – Richard Rosecrance – passed away in his 93rd year. He was our mentor but also one to many others, indeed to generations of graduate students – at UC Berkeley, Cornell, UCLA, and the Kennedy School at Harvard. While the last few years left him less able to exercise his academic wit and mastery, he was a guiding light in international relations for years.

Dick was an unmatched researcher. Just some of his books underscore how prolific and varied his work: 

  • Action and Reaction in World Politics  (1963)
  • Defence of the Realm: British Strategy in the Nuclear Epoch (1967)
  • The Future of the International Strategic System (editor, 1972)
  • The Rise of the Trading State: Commerce and Conquest in the Modern World (1986)
  • America’s Economic Resurgence: A Bold New Strategy (1990)
  • The Domestic Bases of Grand Strategy (co-editor, 1993)
  • The Costs of Conflict: Prevention and Cure in the Global Arena (co-editor, 1999); 
  • The Rise of the Virtual State: Wealth and Power in the Coming Century (1999)
  • The New Great Power Coalition: Toward a World Concert of Nations (editor, 2001).
  • No More States?: Globalization, National Self-Determination, and Terrorism (co-editor, 2006)
  • Power and Restraint: A Shared Vision for the US-China Relationship (co-editor, 2009)
  • History and Neorealism (co-editor, 2010)
  • The Resurgence of the West: How a Transatlantic Union Can Prevent War and Restore the United States and Europe (2013)
  • The Next Great War?: The Roots of World War I and the Risk of U.S.-China Conflict (co-editor, 2015)
  • International Politics: How History Modifies Theory (co-author, 2018)

This partial list embodies seminal contributions to the fields of security, foreign policy, and international political economy. These works emphasize the roles of both domestic and international forces, reflect an interest in history and the forces for change in world politics. They also reveal an interest in applying social science to develop strategies for dealing with these challenges.  Understanding the implications of modernization and the potential to produce greater prosperity and avoid war and chaos was a major focus of his career.  He was a student of world affairs who thought about the implications of current events and what puzzles they posed to our conventional understanding.

The above list also encapsulates a productive career that extended for more than five decades into his mid-80s and includes two books and four edited volumes produced following his retirement from full-time teaching.

The wide-ranging set of his writings constitutes only part of his impact on the field.  Dick encouraged and empowered his students.  He would point out lacunae and understudied portions of the field, but he was equally interested in his students’ views of the burning questions that animated them.  He relished hearing and discussing contrasting views and supported students working on approaches that differed from his own.  Among his students are prominent realists, liberal internationalists, and constructivists.  In his support of his students and his interest in the work of younger scholars, Dick was one to send the elevator back down.

His interest in and his examination of international relations extended over his long life. We were honored to be his students and colleagues and to be with him in the classroom. 

We mourn his passing. We miss his wit, wisdom, intellectual prodding, and encouragement.

Image Credit: Belfer Center  

This Joint Post with Arthur A Stein originally appeared at the Substack, Alan’s Newsletter

https://open.substack.com/pub/globalsummitryproject/p/a-notable-passing?r=bj&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true

US-China Relations- How difficult is the relationship?

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This week I, and just about everybody else holding some interest in sport, or at least in innovative commercials were distracted by the events leading up to, and including, the 58th Super Bowl. Notwithstanding the quickening approach of this Super Bowl Sunday, however, I was drawn to an examination by a number of experts for the Brookings Institution of the US-China relationship.

So in this somewhat shortened Post, thanks to the Event,  I thought I might pay a bit of attention to their useful views.

Graham Allison, one of the experts called on to respond to the question, pointed to the issue posed to the experts:

The invitation from Brookings’ debate organizers asked: “Is the U.S.-China relationship the most consequential bilateral relationship for the United States in the world?

He went on to lay out just why the bilateral relationship is so consequential:

My answer is: yes. If not China, who?

China is:

– one of only two nations that poses an existential threat to the United States.

– the only nation that poses a systemic threat to the U.S. position as the global leader, architect, and guardian of the post-World War II international order.

– the largest emitter of greenhouse gases—accounting for more emissions in 2022 than the United States and Europe combined.

– the second backbone of the world economy: the manufacturing workshop of the world, the No. 1 trading partner of most countries in the world (including the European Union and Japan), and the supplier of most critical items (including everything green and clean) in global supply chains.

– both a classic Thucydidean rival and America’s inseparable, conjoined Siamese twin.

The folks who commented included, as I noted above, Graham Allison, Douglas Dillon Professor – Harvard, and additionally, John Cartin, Adjunct Professor, Walsh School of Foreign Service – Georgetown, Elizabeth Economy, Senior Fellow – Hoover Institutions and Susan Thornton, Senior Fellow – Paul Tsai China Center, Yale Law School, and nonresident fellow, the Brookings Thornton China Center.

It is, for sure, a significant question. After all, the state of the US-China relationship, largely without question, drives the geopolitics of current international relations. And the answers did not fail to satisfy. The assessments by these experts are all very revealing and if you have a moment the answers are worth a read. I say this notwithstanding that not all even saw the relationship as most consequential. In fact Elizabeth Economy promoted a somewhat contrary notion. As she argued:

There are many ways to describe the U.S.-China bilateral relationship. For example, the relationship is the world’s most complex, most challenging, or most competitive. However, the relationship is not “the most consequential in the world for America. Far more consequential is the United States’ relationship with its network of allies and partners in Asia, Europe, and North America. Unlike China, the United States’ allies and close partners share the same values, norms, and strategic objectives. … However, over the almost half-century since the normalization of the U.S.-China relationship, the bilateral relationship has never realized the potential Washington imagined. The two countries’ values, norms, and interests have increasingly diverged, and the ties that have bound them together have increasingly frayed.

In his response, Allison is unwilling to let the Economy argument pass and sets it out his views starkly:

In arguing against the significance of the U.S.-China relationship, both Economy and Cartin duck the reality of China’s existential threat. The brute fact is that China is one of only two nations in the world with nuclear arsenals that constitute genuine “existential” threats—meaning threatening existence.

While not unanimous, then, still I think most would underscore that the US-China bilateral relation is highly consequential. Having said that though, I was most taken with Susan Thornton’s response. Now admittedly I know Susan most of all the experts as she is a key figure in our own China-West Dialogue (CWD). But she argued and targeted exactly what I would have also zoned in on. Susan accepted that the relationship was indeed the most consequential but then targeted what I would have as well: the key to the relationship and its likely impact on the global order is the state of domestic affairs in the US. As Susan argued:

And just to be clear, relations with or actions taken by any other single country will have little consequence for Americans in the world compared to our own decisions and actions. Our fate lies in our own hands. … In short, America cannot escape “China impact.” China is big, capable, changing rapidly, and operating in all priority zones. Still, obsessing over what China does or might do is a mistake that will carry large opportunity costs for America that it cannot afford. China may be the most consequential “other country,” but we need to take responsibility for our own future, a future that will involve “China impact,” but that we can shape.

Absolutely. Couldn’t agree more. In the face of the real possibility of a return of Donald Trump as American President, most anything, and likely everything else pales in comparison to that reality and the real chaos likely to be generated by his return both for domestic and US foreign policy.

Image Credit: MIssouri State University

This Post originally appeared at my Substack, Alan’s Newsletter. https://open.substack.com/pub/globalsummitryproject/p/us-china-relations-how-consequential?r=bj&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true

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‘The Decline of US Hegemony and its Consequences for the Global Order’ – A Roundtable at the International Studies Association

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ISA 2023: Exhibit, Advertise, and SponsorSo, the International Studies Association (ISA) just concluded in Montreal  after a visibly energetic in-person gathering following several years of virtual meetings only.

I was fortunate enough to chair the roundtable. All sorts of good folk attended including panelists: Arthur Stein, UCLA, Lou Pauly, University of Toronto, Yves Tiberghien, University of British Columbia, and Kyle Lascurettes, Lewis and Clark College. Unfortunately, our colleagues, Janice Stein could not join but I was fortunate enough to receive her speaking note and I have tried to reflect some of her thinking with the notes from other colleagues.

What didn’t surprise me, of course, during the session was the recognition from all that we have a fraught period of transition in the international system. There is the obvious Russian aggression against Ukraine and the challenge by Russia to some of the basic tenets of the current order – most notably territorial integrity and national sovereignty. There is also the obvious growing leading power tensions between the US and China and the growing threat of confrontation and conflict especially over Taiwan that currently stock the relationship. There was the obvious attention to US determination to sustain dominance even in the face of a dramatic power transition with the emergence of China and more broadly the Global South – India and other Indo-Pacific nations including Indonesia, etc. and other Southeast Asian states and then, of course, the return of Lula to Brazil.

But raw geopolitics did not dominate the discourse of the Roundtable. Equally significant in our discussions was the acknowledgement of the continuance of the intergovernmental institutions and collective actions of states to advance global order and achieve collective action within the framework of the current and evolving Order. While some decried the faltering of the global institutions, nevertheless, there was general acceptance that regional and other informal order-based institutions continued advance policies in various ways. AS one of my colleagues Kyle Lascurettes noted: “There is a truly global rules-based order that stands a good chance of outliving American hegemonic decline. But the so called “liberal” or “Western” rules-based order is and will be in trouble.” Indeed, the liberal order or the Liberal International Order (LIO) disappeared, I’d argue with the Global Financial Crisis” in 2008 but the Global Order does indeed remain. And, as Yves Tiberghien focusing on the dramatic power transition suggested: “today is a time of disruption and transition – a special phase. Major shocks, change, crises, innovation will take place over the next 1-2 decades … Also shift in awareness. Western dominated order was an anomaly of last 200 years, with a rise phase for 300 years before that. Return of multiple voices all over the world. Return to a diverse, polymorphic, poly polarity.” As Jagannath Panda recently wrote in an EAF blog on March 20, 2023:  “Obituaries of the US-led liberal international order may be exaggerated, but the shift towards multipolarity is in motion.”

And what then do we have as the Global Order, and how will it advance. Arthur Stein recalled the fragile nature of the Order, which he described for me in his opening chapter of my 2008 edited volume – Can the World be Governed? The global order, he wrote then, and repeated at our Roundtable was:  ‘a weakly confederal world’. As he said at the time (2008, 52) : ”In fact, one could argue not only that multilateralism is an existential reality but that weak confederalism is the nature of modern reality.”

So the LIO has faded,  and what remains is the global RBIO (rules-based international order). Weaker and less collaborative – indeed as Arthur pointed out, the low hanging fruit of cooperation has passed and it is and will be increasingly difficult to reach collaborative solutions . But as Yves points out that there is continuing support for aspects of the Order including with China where Yves notes the significant China support for COP15 the Conference on  Biodiversity where the multilateral conference came together to agree on a new set of goals to guide global action through 2030 and to halt and reverse nature loss and the recently concluded agreement on the text for the critical High Seas Treaty. The challenge for the leading powers is to maintain a forward collaborative thrust, and as Lou Pauly warned, it is critical for the US to accept: “The challenge is to overcome perennial tendencies toward either insularity or spasmodic over-extension, toward temporizing on necessary decisions, toward shifting the costs of adjustment to the relatively poor internally, and toward exporting the rest of those costs to other countries.” It will not be easy; and Arthur reminded us that American domestic politics has been a problem since 1919 and continues today with the failure to approve through the US Senate, international agreements and the often strained effort to use executive power.

As Janice Stein alludes to in her notes: “Plurilateral and minilateral institutions – from AUKUS to IPEF to Trade and Technology Councils will be the principal sites of innovation. I have called this process “taking it offsite.” New institutions are being stood up, led by the willing, who set rules and invite others to join if they wish. One could argue that we are entering a period of start-up innovation in the creation of new, smaller, more flexible, and more focused institutions.

Although Janice may be a touch pessimistic over multilateral collaborative action, the Global Order has its worked cut out for it to avoid great power conflict and achieve critical global governance policies in climate, global finance, global health and much more.

 

Image Credit: ISA

Why Not Diplomacy

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2nd Republican debate cnn.com

So it would appear that the Obama Administration has crossed the finish line on the US-Iran nuclear deal or as it called, the  Joint Comprehensive Plan of Action (JCPOA). The period of Congressional approval/disapproval – the 60-day period of congressional review  – ends today. With the vote of disapproval eliminated, the US-Iran deal is secured. Of course ‘US approval’ says nothing about implementation, verification and surveillance. That will come next.

Continue reading →

At The G20 St. Petersburg Summit

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For the last several days I have been in St. Petersburg Russia to attend the G20 Leaders Summit.  A number of colleagues have joined me here at the media center at the Summit.  I thought before the release of the Communique and related documents that I would hold a series of interviews with colleagues to get their take on the Summit.

First a conversation with Yves Tiberghien a Senior Fellow at the Global Summitry Project at the Munk School of Global Affairs and the Director of the Institute of Asian Research at the University of British Columbia.

Yves …

 

 

An Encounter in South Africa

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I had the privilege these last few days to join a conversation between US and South African experts, here in Pretoria.  Hosted by Pretoria University and the US Stanley Foundation, the discussion focused on how, and in what ways, the United States and South Africa might better collaborate on the challenges facing states – in the global economy and in international politics.  With South Africa a member of the G20 there was a particular interest in understanding how South Africa might play a role in the new informal club of established powers and newly rising states.

This two-day dialogue was however off-the record so I will not comment on specific conversations.  You can have a look at Stewart Patrick’s blog at CFR, The Internationalist (South Africa: Just Another BRIC in the Wall?)  for his examination of the South African foreign policy trajectory.  Stewart was one of about 6 of us from North America that found ourselves exploring with our South African colleagues from the University of Pretoria, a variety of think tanks and NGOs this most interesting bilateral relationship.

One aspect that emerged early in the conversation and remained a theme throughout was the limited understanding for the views and policies of the other side.  Clearly more dialogue and discussion is necessary and should be encouraged – and for the record I will happy to volunteer for the task.

I must say at the outset that I gained little insight in how South Africa sees the G20.  In fact there was rather limited discussion of this new global summitry institution.  On the other hand there was much discussion of the importance of South Africa being admitted to the BRICS – though it was never expressed forthrightly what the BRICS were likely to achieve – and why therefore South Africa regarded joining as so important to it. It was evident, however, that the BRICS, according to the South African’s – was a caucus where the members were proponents for non-intervention – and that was likely to prove troublesome to the United States.

There were evident divergences in the foreign policy perspectives and priorities of the two countries. And there was also – and I would say more troubling – evident suspicions over the behaviors of each.  Thus South Africans were quick to see US heavy-handedness and an eagerness to resort to force in most crises situations. There was great back and forth over whether the US and other allied actions in Libya had exceeded the UN resolution 1973 – and US quick dismissal of African Union efforts to mediate between the Libyan factions.  Many of the South Africans thought so.  South Africans expressed strong disapproval for the humanitarian intervention in Libya – some even suggesting that South Africans and other African states would be unlikely to resort again to the policy of humanitarian intervention – given the way that the Libyan mandate had been abused according to a number of South African participants.

There was a measure of dismay from the US experts at the reliance on non-intervention by South Africans in a variety of crises settings including Myanmar and more recently in Syria.  US experts additionally expressed discontent over the South African approach to the crisis in Zimbabwe and the efforts to tamp down the crisis without stronger efforts to remove the authoritarian leader Mugabe.

So what lessons did I come away with in this encounter?  Experts from both countries emphasized the heterogeneity of their societies, their pride in their democracies and their commitment to a rules-based international order.  But there was a significant divergence in the way in which they approached achieving that order and a hesitancy in the character and actions of the other country.

South Africa continues to regard UN Security Council (UNSC) reform as vital; they continue to press for a permanent seat there. There was a growing sense from the South Africans that they could no longer count solidly on African support.  And both group of experts remained pessimistic that any reform in the near term was at all likely – though South Africans urged greater efforts by the United States to secure reform.  Both groups also acknowledged that continuing deadlock would erode the legitimacy and salience of the Council.

The South Africans underscored their country’s concern and actions in promoting peace in security on the African continent – in Libya, South Sudan, Zimbabwe, etc.  They expressed annoyance at the failure of the US to acknowledge and support the efforts, especially of the African Union (AU), on the continent.

The conversation was a helpful effort in filling in some of the blanks in the relationship.  But there is much to do to reduce the gap in understanding and modify the suspicions that each has for the efforts of the other in global governance.

 

In the Can(nes)

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A different hijacking possibly – but a hijacking nevertheless.  So that’s how it has gone so far in Cannes. The Greek debt and then the political crisis created by the Greek Prime Minister’s decision to hold a referendum yesterday but maybe not today.  In any case President Sarkozy couldn’t avoid the train wreck that Greece brought yesterday.  All the attention here in the media center was on the Greek crisis and the problems of debt in the Eurozone.

It is not that other matters weren’t being addressed.  As I’ve suggested elsewhere and here in past blog posts, I subscribe to the “Iceberg Theory” of global governance.  When the summits are on everyone naturally focus on leaders.  But in the period between summits and during the Summits many officials from a variety of ministries, departments and other institutions are either completing or expanding on reports and communiques that are vital elements in acting on global governance collaboration.

So look for the Action Plan and other reports accompanying the final communique.

 

 

Sorting Out the G20 Role

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The Airport is always a good place to collect one’s thoughts.  And I was struck by an op-ed by Canada’s Prime Minister Stephen Harper placed in Canada’s Globe and Mail prior to soon to occur meetings of G20 Finance Ministers and Central Bankers in Paris.

What Harper does right in my opinion is to sort out the actions that should be taken by different major actors in the global economy.  The key crisis point in the global economy right now  is the European sovereign debt crisis and the failure of European governments – particularly the French and the Germans – to take decisive action to deal with the sovereign debt crisis and the contagion that the continuation of the crisis threatens.

Again, rightly in my opinion Harper urges the Europeans to:

  • take decisive action;
  • increase the flexibility of the European Financial Stability Facility ; and
  • implement plans for debt and deficit reduction that are clear and credible to the market.

Then Harper urges action – indeed coordinated action – by the G20.  And here Harper urges the G20 to ‘stick to its knitting’ – that is to focus the collective efforts not  on the immediate sovereign debt crisis but on the medium term agenda that is the remit of the Leaders Summit.Get it done.

Thus, Harper encourages the G20 Leaders Summit to:

  • further develop the SSBG (Strong Sustainable and Balanced Growth Framework) Framework;
  • meet clear and concrete medium term debt and deficit reduction plans –  set, as he points out, at the Toronto Summit;
  • provide meaningful action to increase exchange-rate flexibility;
  • commit to implementation of the financial sector reform agenda agreed to at previous summits; and
  • to resist – the old G20 saw but still important – trade protectionism.

As Harper suggests

While the efforts made so far by the G20 are significant, more action by some is needed.  Only with a clear plan will the citizens of countries in crisis accept in crisis accept the painful compromises they are being asked to make for their nations’ future well-being.

Harper points out a needed leadership lesson. Focus on what you are called on to do; avoid the distractions that can undermine your legitimacy and effectiveness.