China-West Dialogue (CWD) Members Discuss the Global Debt Management Environment

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The CWD focused recent attention on the global management of debt and the growing threat of a sovereign debt crisis. After a number of virtual gatherings and much focused discussion, the CWD completed a Debt Management Proposal that CWD passed to folks in India as India scheduled the first G20 Finance Ministers and Central Bankers Ministerial at Bangalore, or its official name, Bengaluru.

The  CWD Debt Proposal Summary is currently posted at the Global Solutions Initiative. but we do anticipate that the full Proposal will be up at the Global Summitry Project shortly. Meanwhile, I also wanted give you a flavor for the intense discussions that went on among CWD principals working on the Proposal. First, I wanted to link you to the Debt Management analysis prepared by Deborah Brautigam at SAIS that was published as: “The Developing World’s Coming Debt Crisis: America and China Need to Cooperate on Relief” in Foreign Affairs published on February 20th.

And then I wanted to give you a flavor of the deep discussion that went on for several weeks. This is a short back and forth that took place with Deborah Brautigam, Johannes Linn and Richard Carey on February 21st. I have smoothed the discussion and elaborated on the many acronyms in the back and forth:

“Johannes Linn

If I had one wish, Deborah, after reading your excellent article in Foreign Affairs, it would have been that you had explained more fully the nature of the Heavily Indebted Poor Countries (HPIC) process. In my view it was not “debt cancellation” by the IFIs, but the paydown of IFI debt with resources from bilateral donors and some International Bank for Reconstruction and Development (IBRD) net income (which could otherwise have been contributed to International Development Association (IDA)). If I understood the [current] Chinese proposal for the establishment of a World Bank trust fund in parallel with an existing IMF trust fund to pay off IMF debt (as you mention), then that would in effect be parallel to the HPIC approach, and one wonders why the World Bank didn’t accept that. It  could be that World Bank did not want to risk having bilateral donors reduce their new IDA contributions in reaction, which would have meant less new IDA money for the poorest countries.

It appears that the issue with multilateral debt relief is the following: there is no free lunch — if the Multilateral Development Banks (MDBs) take a hit on their balance sheet and give up their long-established “preferred creditor status”, they risk a downgrading and higher risk exposure and thus more restricted prudent use of capital market funding. IDA will have fewer resources for new lending. In effect, other developing countries will pay the price for multilateral debt cancellation. If they go for a HPIC-like solution then bilateral donors will have to pay, burdening either donor countries’ tax payers (which, one could argue, is not unreasonable); this might risk that their contributions to IDA and other concessional multilateral windows will drop and thus concessional new money from MDBs for the poor countries will decline (in which case other developing countries would again pay the price).

By the way, a straightforward comparison of debt outstanding across creditor classes, while relatively easy to compile, tells only a partial story. One really should look at the net present value of debt service obligations across creditor classes, since that reflects the real cost of debt to countries, allowing for very different terms under which different classes of debt are contracted. Under this approach private debt will weigh much more heavily and MDB debt less so. It would be interesting to see what happens to Paris Club debt versus Chinese debt.

Deborah Brautigam

My own view is that the World Bank should have explored the establishment of a Catastrophe Containment and Relief Trust (CCRT) – an IMF trust – equivalent more seriously. There was a view expressed that China wanted it to be funded in proportion to voting shares, which was deemed infeasible, but the IMF trust is, I believe, funded by voluntary contributions. This would have been a start.

As I recall during HIPC, since the debt relief was counted as “aid”, countries did reduce their non-relief funding. I remember that Japan warned that this would be the consequence.

Richard Carey

The decision to adopt and implement the “enhanced HIPC” was taken at the Cologne G8 Summit in 1999, after agreement at the previous Summit in Birmingham in 1998 that the following year the Summit would definitively deal with debt.

In that intervening year, the details were hammered out in the contentious process as previously described. Funding of multilateral debt reduction came from the OECD’s Development Assistance Committee (DAC) concessional aid essentially (the IMF used some of its own resources for the Multilateral Debt Relief Initiative (MDRI), with a call for bilateral contributions to cover additional needs, and the MDRI was extended to all countries with less than $380 per capita, whether they had been in the HIPC program or not).

The key mover was Clare Short, then new Labour Government Secretary of State with a new Department of International Development (DFID) and a new White Paper which endorsed the 1996 DAC International Development Goals (IDGs). She flew to Washington to help Brian Atwood, then the Head of USAID, face down Treasury and State who held that the 1996 DAC Goals had not been endorsed. The position was that this initiative did represent US agreement for what eventually became the IDGs. The story of how the HIPC became linked to the goal for poverty reduction is told in Chapter 10 of the recent history of the DAC.

In 1998 the Jubilee 2000 Campaign for Debt Reduction was having a major impact on  public opinion. Short saw an opportunity to make debt relief conditional on poor countries drawing up poverty reduction strategies. To establish that link, Short had to fly to Washington to face down USAID Administrator Brian Atwood and objections from Treasury and State that the US had never agreed to the OECD’s DAC International Development Goals. With her position that Prime Minister Blair would publicly criticize President Clinton if he failed to support the IDGs (eventually to become the Millennium Development Goals (MDGs), the 1998 G8 Communique endorsed them in resounding terms. That is how the enhanced HIPC came to be based on Poverty Reduction Strategy Papers. (Note that CWD Common Framework proposal involves countries adopting medium term strategies based on the “new development narratives”…).

A subplot in this story was that the Comprehensive Development Framework (CDF), was lost to the Poverty Reduction Strategy Papers (PRSPs), although the 1999 Cologne G8 Communique had briefly welcomed the CDF. As Chapter 10 in the DAC History relates, a joint note circulated on April 5, 2000, by James Wolfensohn and Stanley Fischer sought to square the circle of the urgency of the PRSPs to deliver fast on debt relief and the more time-consuming task of bringing multiple stakeholders into a country-led long-term development platform:

For some time the formulation of “PRSPs incorporating the principles of the CDF” became a standard phrase. But eventually the battle for the CDF was lost and this formula faded away. And without the CDF, the HIPC PRSPs essentially left out agendas such as infrastructure, urbanisation  and rural development. The MDGs were essentially human development/wellbeing- based proxies  – these left-out agendas only came back with the Sustainable Development Goals (SDGs) in 2015.

In the present case of the CF, medium term country strategies based on the “new development narratives” can in principle be built on the basis of nationally owned SDGs and Nationally Determined Contributions (NDCs)  to the Paris Climate Change Agreement. But let us see what is emerging in Finance Ministers and Central Bankers meeting in India this week and beyond. And, with bond financing now a major part of the picture, impact investing by the private sector and asset managers on the basis of projects and programs that are green, social, sustainable and sustainability linked  (GSSS) seems to be in vogue.  Also, as mentioned, the article by the Lazard Sovereign Debt Unit has useful ideas  -e.g., on how bondholders can be brought into early agreements with special bonds that provide a payoff for “haircuts” if and when the economy is in much better shape.

Johannes Linn

By the way, one question we all seem to studiously avoid in this discussion about debt relief is how to prevent a new debt crisis a few years down the road, after we solve this one. In the mid 1990s I was involved in establishing the broad design of HPIC – moving from basic concept to decision in principle –  with President James Wolfensohn at the World Bank, so it is particularly frustrating to see the debt issues being replayed all over again, except that it may be an even more intractable problem now than it was then.”

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Image Credit: IMF

Impact of zero-Covid Policies on the CPC, the Government and Xi Jinping

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Protests against the zero-COVID policy in China quickly spread across the country. While Anti-COVID protests are certainly not a new global phenomenon, such a public and widely spread expression of frustration towards the Chinese government is rarely seen.

This note examines the Chinese top level leadership’s approach to the zero-COVID policy; why it led to mounting public anger and frustration; and where it may lead.

The Initial Approach – Central Government’s Blame Avoidance

 While President Xi vowed that he will “supervise and deploy (COVID-19 prevention operations) personally”, the COVID-19 prevention throughout the country took on a decentralized approach.[1] In other words, the order (of no COVID cases) was delivered by the Central Government, but it was up to the local authorities to interpret the order and execute it. For instance, each province has its own mandatory QR code system that rated users’ risk of exposure to COVID-19, and each province had its own domestic and international arrival quarantine requirements.

As power becomes more consolidated within the CPC, it would only appear plausible that the whole country would take on a centralized approach for COVID-19 strategy such as a national QR code system and a standardized requirement for traveling and quarantine. Nevertheless, these decentralized approaches were permitted to continue in the past two years. Frequently, these inconsistent COVID policies among provinces and regions in China caused confusion and frustrations among residents and travellers. This could be viewed as the Central Government’s strategy for ‘blame avoidance’. By providing an opaque order of “no COVID cases”, the Central Government shifts responsibilities to the local governments while leaving them to interpret its own plan. If the strategy is successful, the Central Government, or President Xi himself, could take credit as the operations are overseen by him “personally”.[2] In the event that the strategy is unsuccessful, or controversial, residents naturally would hold the local government accountable as they implemented these procedures.

Too Little To Lose?

A stable society based on rapid economic growth has been a key goal of the CPC. The idea of “you can earn money and spend money but don’t touch politics” is an unspoken social contract among many Chinese and foreign citizens and companies. While China enjoyed rapid economic growth, so also its middle class. Owning at least an apartment and a vehicle and living comfortably have already become the default goal of many middle class citizens. Based on the prerequisite of not participating in politics, these goals are achievable when the balance of the ability to earn a decent wage and reasonable cost of living is maintained. The Chinese citizens know very well that what they have accomplished and acquired could be lost very quickly if they are disobedient to the government. Therefore, most citizens have chosen to refrain from directly criticizing the government for its actions.

With a decelerating economy, however, this balance of economic advancement and political silence is eroding. In major cities such as Beijing and Shanghai, it is hardly possible for youth to find a job that pays high enough to support themselves and afford an apartment or vehicle. The draconian COVID measures further impeded citizens’ ability to find jobs and get paid; hence, their ability to make new purchases. According to the National Bureau of Statistics, real estate development between January 2022 to July 2022 dropped by 6.4 percent while residential investment dropped by 5.8 percent.[3] On the other hand, major online shopping platforms often publish sales volume during November 11th, Single’s Day.[4] According to Sohu News, online shopping platforms such as Alibaba and Tmall both recorded double digit or triple digit growth in sales volume in the past several years.[5] Nevertheless, Tmall did not disclose its sales volume for 2022, instead it published a statement that “the sales volume was largely the same as last year”.[6] These moderated data could also suggest that the general public prefers to save their money instead of spending it given their job stability is affected by the unpredictable COVID policies.

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Indonesia’s G20 Win: behind-the-scenes gatherings and unity in a time when global governance needs it most – and now to India

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Dominating our smartphone screens, televisions, and front pages were photos of Justin Trudeau, Xi Jinping, Joe Biden, and Giorgia Meloni in traditional Indonesian attire, participating in a ceremonial mangrove tree planting event and gathering late night to discuss the missiles that killed two Poles, contemplating potential next steps using NATO’s Article 4. These leaders are – whether they want to be or not – celebrities. They are simultaneously praised and critiqued depending on who is watching them. Yet, what is not seen by mainstream audiences, perhaps even those more politically astute, is the intricate machine of behind-the-scenes work taking place throughout 257 meetings between December 2021 and December 2022 under Indonesia’s presidency of the G20 Summit.

In 2011, the Director of the Global Summitry Project, Alan Alexandroff, wrote about the notion of the G20 not being solely about its leaders, but rather surrounding the Leaders’ Summit an array of complementary “personal representatives, ministers, other officials, IFIs, IOs, [and] global regulators that make the G[20] system work – or not”. Whether the G20 is successful (a subjective term, in any case), is a different conversation.

Alexandroff’s Iceberg Theory of Global Governance positions the G20 Leaders’ Summit at its tip, but the vast bulk of the iceberg is situated below the surface, and often goes unnoticed by the majority of observers and experts.

This underwater all-encompassing mass is formed by numerous assemblies: from Ministerial meetings regarding health, environment and climate, women’s empowerment, trade investment and industry, the energy transition, development, labor, research and innovation, and tourism; to Finance Ministers and Central Bank Governor meetings, Finance-Health Deputies meetings, joint Sherpa and Finance Deputies meetings, individual Sherpa meetings, Foreign Ministers meetings, G20 Digital Ministers meetings, and Education Ministers meetings; and lastly, engagement group gatherings (including the U20, B20 on climate/energy, integrity, compliance, and business leaders; the T20, with numerous recommendations from think tanks around the world, the Y20, with priority areas on digital transformation and youth empowerment, and the L20 Employment Summit).

It would be hard to contest that the G20 indeed has been a platform that has developed and advanced key collaborative actions toward policies and priorities, from the Leader Declaration identifying the Pandemic Fund, the Financial Intermediary Funds for Pandemic Prevention, which employs the World Bank and World Health Organization.

The incoming G20 Troika – Indonesia, India and Brazil – will mark a unique shift in global governance deliberations. It will be led by three Global South countries with emerging large market economies hosting the year-long activities. The hosting will pass from India in 2023, Brazil in 2024, and South Africa in 2025.

We anticipate this three-year spread of Global South presidencies will tackle issues that have been brushed to the side or missed in other G20 Summits. This is certainly a significant step in the effort to construct a multilateral network to seek mutually beneficial responses to growing challenges impacting all countries.

The Financial Times released an article following Indonesia’s Leaders’ Summit, deeming its outcomes “remarkable”. Russia, represented by its Minister of Foreign Affairs, Sergei Lavrov, seemed isolated on the world stage as China put forth a more neutral stance in its support towards Moscow. Xi commented that his administration “resolutely opposes attempt[s] to politicize food and energy issues or use them as tools and weapons”.

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Scepticism Again Abounded Prior to the Opening of a G20 Leaders’ Summit – But Then …

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Alan Beattie, veteran G20 watcher from the Financial Times, has regaled us once again with reasons to dismiss G20 summits before they begin.  On November 14th,  a day before the Indonesian G20 summit begins in Bali, we are treated to the conclusion by him that the G20 is a “gabfest” and  that “it is what it always has been, which is largely pointless”! 

To prove his point,  Alan Beattie links us to his March 13, 2009, article , published a month before the London G20 summit, which was arguably the most important economic summit ever. Entitled “the gap of twenty”, he wrote back then rather definitively that “there should be little doubt…that the divisions seen on display have already dissipated the G20’s ability to spread confidence”.

The Indonesian G20 Summit has in fact demonstrated that without the G20 there would be no global leadership platform which could bring together a finite number of major actors in global affairs from an eclectic array of regions and regime types to address the war in Ukraine, US-China relations, and global systemic challenges. 

What Alan Beattie gets wrong in both 2009 and now more recently just prior to the Bali Summit is to fail to see that “domestic  constituencies “do indeed drive the “domestic calculus”.  The dynamics of global summitry are intended to push the frontiers of public discourses in order to mainstream ambition as good governance rather than to be an exercise in fancy pants diplomacy.  The term “gabfest” trivializes the efforts by global leaders and their officials, advisers and experts to provide societies with the vocabulary for understanding global risks and with vision for global solutions.   

What has gone on all year before the Leaders’ Bali gathering is the tedious developments of policy proposals that will work and the quest for pushing  feasibility frontiers to the maximum that domestic  and financial constraints will bear.   

The  G20 process is essential for global survival and for guiding global systems toward sustainability instead of disaster. The Indonesian Summit has underlined this critical point.

Image Credit: SMA Negeri 1 Singaraja

By Guest Blogger Colin Bradford who is lead-co-chair of the China-West Dialogue (CWD), co-chair of the Vision20, global fellow of the Berlin Global Solutions Initiative (GSI), and non-resident senior fellow of the Brookings Institution.

 

Competing and Collaborating – Dealing with Today’s Geopolitics and Global Governance

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It is an eventful several weeks. Most dramatically the 20th Party Congress of the Chinese Communist Party has launched – indeed it is approaching its conclusion. There is little doubt that Xi Jinping will claim a third term ending the effort by earlier leaders to limit leadership to two terms. His statements will likely be our best guide to Chinese foreign policy for the immediate future. But more on that in a future blog post.

And then there’s the Biden Administration’s release of the National Security Strategy (NSS). The NSS explains the security priorities of the administration to both Congress and the American public and is a legislatively mandated document.This strategic document was about to be released in February of this year but was delayed as the Russia-Ukraine war loomed. With its release just a few days ago, we get some big picture framing for Biden Administration security and foreign policy. Indeed, the advance press call held by Jake Sullivan, the United States National Security Advisor to President Joe Biden, on the day of the document’s release provides an interesting summary and insight of current US policy. Jake sets it out:

The fundamental premise of the strategy is that we have entered a decisive decade with respect to two fundamental strategic challenges. The first is the competition between the major powers to shape the future of the international order. And the second is that while this competition is underway, we need to deal with a set of transnational challenges that are affecting people everywhere, including here in the United States — from climate change to food insecurity, to communicable diseases, to terrorism, to the energy transition, to inflation.

 

And this strategy makes clear that these shared challenges are not marginal issues, they are not secondary to geopolitics, but they operate on a plane alongside the competition — the geopolitical competition with major powers.

 

Now, of course, there are tensions between trying to rally cooperation to solve these shared challenges and trying to position ourselves effectively to prevail in strategic competition. But there are also ways in which these are reinforcing. And we believe fundamentally that the core elements of what the United States must do in the years ahead is — are the same for both sets of challenges.

 

Specifically, we need to invest in the underlying sources and tools of American power and influence, especially our strength here at home, both for the purpose of effective competition and for the purpose of being set up to rally the world to solve shared challenges.

 

Second, we need to build the strongest possible coalition of nations to enhance our collective influence, both to shape the global strategic environment and to address these transnational threats that require cooperation to succeed. And finally, we need to set the rules of the road for the 21st century in critical areas — from emerging technologies in cyberspace, to trade, economics, investment, and more — both so that the international order continues to reflect our values and our interests and so that the international order is better designed to be able to take on the challenges ahead.

 

So this decisive decade is critical both for defining the terms of competition, particularly with the PRC, and for getting ahead of massive challenges that if we lose the time in this decade, we will not be able to keep pace with most notably the climate crisis, but other challenges as well.

 

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The Shanghai Cooperation Organization: “Symbolically significant”, for now

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The Shanghai Cooperation Organization (SCO) leader-led summit was held in Samarkand in this September. It brought global attention to the group first established by Beijing at the start of the 21st century. Not only was it Xi Jinping’s first trip outside the country since January 2020, with the ongoing war in Ukraine, but the meeting was also an opportunity for a sit down between Xi and Putin on the margins of the summit. That meeting was the immediate point of interest for the global media. In Samarkand, India’s PM Modi was openly critical of Russia as he tried to carve out a leadership position for the South Asian republic. While commentators noted that PM Modi did not hold a bilateral with President Xi indicating that the warmth of 2018’s Wuhan Summit between the two has not yet been rekindled.  Iran participated for the first time with the group now representing 40 percent of the world’s population and nearly a third of global GDP and all of which, barring India, are decidedly illiberal regimes.

While the SCO has more than two decades of existence, the summit is of interest not just because of the high-level leader diplomacy but on the peculiar qualities of a multilateral institution that is often neglected by Western scholars and analysts.

The SCO was established in 2001 by the People’s Republic of China (PRC) with the intention of providing stability to the former Soviet Central Asian spaces with a particular focus on cooperation to combat what the members called the ‘three evils’ of terrorism, separatism and religious extremism. This initial motivation reflected China’s broader concerns about counterterrorism and Islamic extremism in the early 2000s as well as long term anxieties Beijing has had about the threat to the Communist Party of China (CPC) rule at the peripheries of the China.

The initial work of the SCO focused on coordinating the members’ security policies and sharing information, as well as conducting regular military exercises. The group added narcotic trafficking to its counterterrorism agenda and began to talk about economic collaboration and had periodic rhetorical flourishes about global governance and international order. From its initial membership of: Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, the SCO has expanded to include India and Pakistan in 2017and now Iran.

While the SCOs public diplomacy has been wide ranging, the group was, and remains at its heart, interested primarily on matters of international and transnational security. Yet as many analysts point out, Beijing and the members often appear disinterested in many quite obvious regional security matters, the most immediate example of which is the deadly clash between Tajikistan and Kyrgyzstan taking place barely 200 km from the current Summit which elicited neither comment nor action from individual leaders or the group as a whole.

Multilateral institutions often serve both symbolic and substantive functions. With the former, symbolic functions provide the opportunity to signal intent, represent collaboration and more broadly to perform statecraft. But substantive functions can provide the means to advance actual policy coordination and, in their more advanced forms, bind members into strict policy commitments, most famously exemplified by the EU and WTO. Most initiatives provide a blend of performance and policy as well as offering a platform at which ad hoc diplomacy can take place, such as the China-Russia meeting this year.

The SCO today is, however, a grouping that is long on symbolism and short on substance. At first glance it appears to be a good example of institutional balancing, that is when states use international institutions to balance against the influence of major powers. In this case the intention is to use the SCO to ensure that the US and its allies’ influence on the geopolitical dynamics in the Eurasian heartland is blunted. From this perspective bringing India into the fold was intended to hedge against Delhi’s growing alignment with Washington.

More broadly, it also represents a desire for a more multipolar and multimodal international order in which the North Atlantic powers have less influence; and liberal values are diluted as well.

While the symbolism is strong, and in the current moment it has particular salience given the Ukraine war illustrating starkly the clash between authoritarianism and democratic systems, there is little sign of the SCO making any meaningful progress on the substantive side of the ledger. One might be tempted to view the SCO as a nascent Central Asian NATO, yet the preferences of the key SCO powers remain low on concrete commitments as well as exhibiting not inconsiderable tensions between various members. At least for now, it is unlikely that the SCO will take any steps to move beyond the symbolic.

It is tempting, therefore, to write off the SCO as another example of shallow diplomacy in which grand statements of intent and photo opportunities are confused for actual statecraft. That is certainly true right now, but in the building of the foundations for collaboration among  influential and illiberal states in a geopolitically crucial zone of world politics, the members in general, and China in particular, have established a solid platform from which members may ultimately make good on their very real ambitions to transform the principles and practice of the regional order and possibly the international order.

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The Twin Threats to Global Governance and Global Summitry

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It is a challenging G20 Summit. For any host. No less so for Indonesia, the first Global South leader in a follow on series of Global South hosts.

This year in November the G20 Summit is scheduled for Bali to then be followed in 2023 by India. India will then be followed in 2024 by Brazil and presumably, though not yet announced South Africa in 2025. So, what’s the problem? Well, in principle nothing. But these Global South hosts are only slowly becoming accustomed to leadership roles where advancing the global governance agenda is called for in the leadership role.

The second dilemma is the dramatic impact of renewed geopolitics. The growing tensions and rivalry between China and the US now dominate relations between these two leading powers. These bilateral tensions have been amped significantly higher by the Russian aggression against Ukraine.  War in Europe, as we haven’t seen in decades now sharpens differences between China and the United States. These difficult bilateral relations have now been further strained by Taiwan tensions following US House Speaker Pelosi’s visit to the island state. These strains are reflected in the undermining of collaborative global governance relations between the two, and more broadly the apparent hobbling of multilateral relations.

So, two threats to advancing critical global governance policy at the global summitry level. These threats are particularly enhanced where domestic politics dominates and global leadership emerges rather more as an afterthought.  And it would seem that is exactly what our Host faces. First, the dominance of domestic politics. This feature of Indonesian leadership politics is precisely what is identified by Shafiah Mushibat in his recent post at EAF titled: “Indonesia steps innocently onto the international stage”:

In Indonesian politics, the domestic audience and interests still trump the global audience and global common interests. This is not unusual, and it’s reasonable, considering that foreign policy involves actions and activities by governments that aim to defend and promote national interests. But Indonesia is quickly discovering that marrying its international roles, responsibilities and expectations that go with them to national interests that please domestic audiences is not altogether easy.

Mushibat concludes that the Indonesian President has chosen to emphasize the domestic politics of Indonesia’s leadership of the G20. He writes:

Approaching the G20 presidency, the Indonesian government initiated many activities to promote its role domestically. This included raising awareness of the G20’s ‘benefits’, such as the direct economic benefits of hosting the summit. In a November 2021 speech, Widodo pressed the country to make the most of its strategic position in the G20 presidency and ‘prioritise national interests’. Explaining how the G20 presidency will benefit the country has been a main part of the government’s effort to ensure domestic support for all the efforts.

And as to the second and growing threat – the destructive impact of geopolitical tensions – they are real:

Indonesia has been lauded as representing the voices of developing nations and emerging economies outside of the G20, but its presidency faces major challenges — mainly because of the geopolitical implications from the Russia–Ukraine war. While the G20 has performed important functions for member states and the world at large, it struggles with balancing the pursuit of its members’ national interests with a genuine commitment to the global common good. As the world grapples with economic and health recovery from COVID-19 and the impact of the Russia–Ukraine war on food and energy supplies, the global common good and how to achieve it is the vital interest.

The corrosive impact of Russia’s war in Ukraine on global cooperation cannot be underestimated. It has ramped up Biden Administration efforts to build alliances and partnerships. Included in that circle of partnership efforts is the G7 where the United States has emphasized the ‘like mindedness’ and democratic character of the G7. With all the emphasis on the G7 there seems to be little room for a Biden collaborative focus on the G20. Working the G20 with China in particular with all its Ministerials, Working Parties and Task Forces is a key but apparently a key not willing to be turned by the Biden Administration.  The G20, of course, includes Russia and much of the US G20 public discussion has urged the exclusion of Russia from the Summit. Rather than a focus on advancing collaborative efforts the public statements have been on Russia’s exclusion and questioning China, at least in public, on its positioning with respect to Russia.

Meanwhile Widodo has tried to smooth the difficult Russian presence by inviting the Zelenskyy, the President of Ukraine to attend at Bali as well. But the critical focus has to be on the Biden Administration to ‘grab’ the G20 ring, avoid the Russian distraction, and focus on critical multilateral global governance initiatives.

Image Credit: East Asia Forum

Evaluating Prime Minister Shinzo Abe’s Legacy

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The remarkable thing about former Prime Minister Abe is that he started out as a nationalist. In his early years as a politician he focused on restoring Japan’s pride after the shame of World War II and the Tokyo Tribunal. As a prime minister, however, he took both a more pragmatic and a more internationalist approach. Shinzo Abe ended up having a global impact: not only, did he build more regional connections across the Indo-Pacific than any previous Japanese Prime Minister; he also rose up to become the defender of the liberal international order during the Trump Presidency, making strides both in developing international trade agreements and in advancing security alliances.

Shinzo Abe came from a blue blood political family, based in a Yamaguchi prefecture, the former Chōshū Domain (長州藩, Chōshū-han) that led the Meiji Restoration along with Satsuma and Tosa. His grandfather Kishi had led the industrial development of Manchukuo in the 1930s and served as Minister of Commerce in the Tojo Cabinet. Arrested by the American military in 1945 as suspected war criminal, he was released without trial in 1948, in part due his potential role as conservative leader in post-war Japan. He served as Prime Minister from 1957-1960, during which he led the renewal of the US-Japan Security Treaty. Abe’s uncle, Sato Eisaku was also Prime Minister from 1964 to 1972. In fact Prime Minister Eisaku was the longest uninterrupted Prime Minister until Shinzo Abe outlasted him!  Abe’s father, Abe Shintaro, was a leading politician in his time, serving as minister in various portfolios (including the Ministry of Economy, Trade and Industry (METI) and Foreign Affairs) between 1972 and 1986. He was narrowly defeated as potential Prime Minister.

In the 1990s and 2000s, Shinzo Abe was well-known for his denunciation of the Tokyo tribunal and its conclusions on Japanese guilt, his links with nationalist groups, and advocacy of a “beautiful” or normal Japan with full autonomy and a real army. The issue that motivated him the most throughout his political life was to change the constitution written by the American occupiers, particularly Article 9, which formally forbade Japan to hold an Army or have the right of belligerency. This was a mission inherited from his grandfather, Kishi. And Shinzo Abe did bring that agenda to office in his first term as Prime Minister in 2006-2007, and quickly lost public support for it.

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Constructing an Inclusive Order: Avoiding Fragmentation and Worse – Disorder

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Two summits completed and another off in the distance, but impacted by these just completed summits. A crowded summit schedule has begun.

The statements were voiced and the Leaders’ Communique issued by the G7 at Schloss Elmau to be followed by more speeches and statements and the issuing of the “Strategic Concept”  a once ever ten year statement by NATO at Madrid.

What have we learned from this G7 and the NATO gatherings? Let me first focus on the G7 Summit. Well, first it is relevant that we take into account the position expressed by one of the longstanding observers of the summit process, Sheffield’s Hugo Dobson. As he concluded, along with his colleague Greg Stiles in Global Policy , reflecting their review of the German G7 and in particular the Leaders’ Communique:

In summary, and despite what we have tried to do here, beware reading too much either positively or negatively into a single summit document. Rather, this communiqué should be placed in the context of a network of summits – most immediately the NATO Summit in Madrid later this week and looking further ahead to the Indonesian-hosted G20 Summit later this year.

And it is a summary and caution well worth heeding. Nevertheless, the tone is worth further comment. The G7 took the time and the Communique to underscore their self characterization as a democratic forum. In their Communique opening the G7 declared:

 As open democracies adhering to the rule of law, we are driven by shared values and bound by our commitment to the rules-based multilateral order and to universal human rights. As outlined in our Statement on support for Ukraine, standing in unity to support the government and people of Ukraine in their fight for a peaceful, prosperous and democratic future, we will continue to impose severe and immediate economic costs on President Putin’s regime for its unjustifiable war of aggression against Ukraine, while stepping up our efforts to counter its adverse and harmful regional and global impacts, including with a view to helping secure global energy and food security as well as stabilising the economic recovery. 

 

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Struggling to Keep UN Multilateral Institutions Relevant

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She sought to put her best foot forward in her first appearance following her controversial visit to China. In the opening moment of her statement Michelle Bachelet, the UN High Commissioner for Human Rights reflected the positive aspects of her trip:

Let me start by thanking the Government of China for its invitation. For the first time in 17 years, a UN High Commissioner for Human Rights has been able to travel to China and speak directly with the most senior Government officials in the country, and other interlocutors on key human rights issues, in China and globally I appreciate the Government’s efforts in making this visit happen, particularly the arrangements for my virtual meeting with President Xi Jinping.

She has received dramatic criticism from the human rights community. As identified in the NYT, the comments from Sophie Richardson, the China director at Human Rights Watch dismissed the Commissioner’s efforts: “That mandate requires a credible investigation in the face of mountains of evidence of atrocity crimes, not another toothless dialogue.”  A second comment by Kenneth Roth, the director of Human Rights Watch underscored the harsh negative view expressed by the human rights community (NYT, June 13, 2022) : “There was no condemnation from Madame Bachelet even remotely commensurate with the severity of the atrocities being committed in Xinjiang, … She gave up her most powerful weapon for a back room dialogue which will be meaningless.”

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