Next month’s meeting of the Group of 20 (G20) in Bali, Indonesia, comes at a time of rising regional military strategic tension, a time of “little fires everywhere” around the world, increased prospects of stagflation and of general failures of global governance. The world’s attention will or should be focused on Bali and what world leaders will do to curb the spread of these little fires around the globe.
This state of affairs amounts to another multidimensional crisis, not terribly unlike the state of the world at the turn of the century, when globalisation was blamed for instability and a need arose for a new architecture of global finance. At the time, specifically in 1999, the UN put forward the policy framework of global public goods (GPG) to “better manage” globalisation, international co-operation and improved global governance.
This GPG “lens” represented the “missing link” of global public policymaking in a “volatile world [that was] going through crisis upon crisis”. Most notable at the time was increased conflict, communicable health crises, recurrent financial crises, the global climate crisis, destruction of cultural heritage ... and an increase in inequality between rich and poor.
When the 20 most powerful and influential leaders of the world gather in Bali on November 15 they do so against a backdrop of an abject failure to improve global governance, which remains “poorly done and poorly understood,” as a colleague wrote in a research paper in 2000.
Slightly more than two decades after the UN proposed its new blueprint for better global governance, the world has witnessed an escalation in each of the main areas identified by the UN. Almost immediately after its release the dot-com bubble burst in October 2000. In September 2001 New York and Washington were attacked by Al-Qaeda.
Then there were the ensuring wars in Afghanistan and Iraq; the rise of the Islamic State; popular uprisings and wars across the Maghreb (notably Tunisia and Libya); continued conflict in Palestine; renewed conflict in the Horn of Africa; pogroms against the Rohingya in Myanmar; the global economic and financial crisis of 2008; war and mass population displacement in Syria, and the rise of illiberalism and right-wing populism from the Philippines to India, Hungary, Italy and the Americas.
The Ebola epidemic of 2013 and the Covid-19 pandemic of 2020 drove home the extreme vulnerability of communities and societies around the world, especially since communicable disease was one of the “global health crises” the UN sought to address through the GPG framework. In the meantime, Russia started a war with Ukraine when it annexed the Crimean peninsula in 2014, and in February this year Moscow expanded its war to Ukraine’s eastern regions.
It would appear that the UN system, world leaders and leading thinkers (especially those who cobbled together the UN Development Programme’s texts on GPG) have gravely misunderstood global governance, and as Craig Murphy wrote in 2000, “creative intellectual leadership [has not been] matched by courageous political leadership”.
Causation is difficult to pin down in the greater “global” context. What does seem easier is that the expected global stagflation — high inflation, low growth and high unemployment — can be attributed to several negative aggregate supply shocks that have curbed production and increased costs. Much of this can be attributed to the Covid-19 pandemic, which forced many sectors to shut down and disrupted global supply chains, with an attendant reduction in labour-supply in highly industrialised countries, including China.
This crisis was compounded by Russia’s invasion of Ukraine, which has further disrupted supply chains and driven up prices of food, fertilisers, industrial metals and energy. Further disruptions were caused when China ordered further and stricter Covid-19 lockdowns, which caused additional supply chain disruptions and transport bottlenecks.
Politically, and overtly, the Bali gathering will focus on three priorities: the digital economy, the architecture of global health, and the energy transition. It is in the engine room of the G20 meeting, the ministerial and central bank governors meeting, where the fractures, the lingering and legacy crises in the global political economy, will be discussed.
These include strengthening and synchronising the global recovery; securing passages for stronger and more equitably spread of growth; promoting sustainable finance; expanding an inclusive financial system; strengthening digital payment systems, and an international tax agenda.
These agenda issues will build on the work of Indonesia’s presidency of the G20, which started in December last year and included strengthening the global financial safety net, addressing capital flows volatility; financial sector regulatory reform, accelerating the infrastructure agenda towards sustainable and inclusive development, strengthening health system capacity in terms of pandemic prevention, preparedness and response, and strengthening the Compact With Africa, which aims to help African countries achieve sustained and inclusive economic growth by mobilising governments and their international partners to implement concrete measures to create a better environment for private investment.
A promising and dramatic sideshow of the Bali meetings will be the attendance (or non-attendance) of Russia, a member of the G20, and Ukraine, one of a handful of “invited guests”. I guess we’ll have to stay tuned.
• Lagardien, an external examiner at the Nelson Mandela School of Public Governance, has worked in the office of the chief economist of the World Bank as well as the secretariat of the National Planning Commission.
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