By Liu Zongyi
The future of the UN reform and the further institutionalisation of G20 is frustrating the western countries’ approach to global governance. This article discusses how China’s approach in making global governance an inclusive one by building a formal relationship between the UN and G20 will get support from most developing countries.
The G20 Hangzhou Summit has come to a close successfully on September 5, 2016. It gave priority to development for the first time in global macro policy framework, offering the most seats to developing countries than ever before, and has promoted the resolve of global climate change issue. The United Nations (UN) Secretary General Ban Ki-Moon praised these major breakthroughs achieved on Hangzhou Summit. The G20 Hangzhou Summit takes the UN back to the centRE of global governance to some degree.
1. Rise of Global Governance and the Role of the UN in it
The concept of global governance was put forward in the 1990s, and even much earlier according to some scholars. It mainly includes three aspects: politics and security, economy and trade, climate change or environment and energy.
When the concept of global governance rises, there are already many international institutions, including the United Nations system, the Bretton Woods system, its subsidiary bodies such as the World Bank, International Monetary Fund (IMF), World Trade Organization (WTO), as well as the “hidden rules” based on these institutions. But firstly, these existing institutions could not deal with constantly emerging global challenges; secondly, more and more new international actors appeared, not only emerging economies or emerging powers, but also the civil society, non-governmental organisations (NGOs), transnational companies (TNCs), etc. Many scholars believed that the existing international arrangement do not fit the current international realities and cannot meet the requirement of universal human needs for peace, security and development. The existing arrangement could only be called “international governance”, and not global governance. It’s a “thin order”, and not a “thick order” represented by global governance. It is necessary to abandon the old mechanism and establish a new mechanism in order to adapt to the structural adjustment of international powers resulted from the rise of emerging economies, and address global issues through global governance.
In order to fit the international situation, we witnessed the UN begin its reform under the leadership of Boutros Boutros-Ghali. Because the UN is the international organisation with the most universality, representativeness and authority, and it has both United Nations Security Council (UNSC) that address political and security issues and Economic and Social Council, United Nations Conference on Trade and Development (UNCTAD) and United Nations Development Programme (UNDP) that address economic and development issues, many people wish the UN can become the core and base of global governance by putting forward the reform of UNSC, covering civil society, and making other institutions under the direction of the UN. The UN Commission on Global Governance was established in 1992. Until today, we are still talking about the reform of the UN, but there is little definite improvement. In terms of global governance, the UN only plays a convening role, not leading roles in climate change and development fields. In fact, the UN is marginalised in global governance.
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2. Two Approaches of Global Governance and their Frustration
Just as Former UN Secretary General Boutros-Ghali said, a serious problem for the UN reform is how to deal with the relations with the US. In the post-Cold war era, western countries led by the US tried to establish a global governance system centred on G7. The function of G7 expanded from economic field to political and security fields. After Russia entered, G7/8 almost made the UN a mere figurehead. This is a collective-hegemon design around the US. The US even adopted unilateralism on many international political and security issues, such as the Iraq war. But with the collective rise of emerging economies, western countries found that this design could not address constantly emerging global problems effectively, such as the Asian financial crisis in 1997. Thus, some western countries, such as Canada, suggested to establish a new mechanism that included emerging economies or large developing countries. The former Canadian PM Martin put forward a conception of L20. But this suggestion was rejected by the US and Japan. In order to deal with international financial problems and some globalisation issues, western countries established a financial ministers and central bank governors meeting mechanism, which is G20.
While some European countries have different global governance ideas, they believe EU’s effective multilateralism can encourage a better model of global governance. From 2003, on the G7 Evina summit, France invited leaders of some large developing countries to have a dialogue. Britain and Russia also did that. At last in 2007, the Heiligendamm Dialogue Process was initiated by Germany. Germany would like to make G8+5 become a fixed mechanism. But there were still some G7 countries against it. In the Touyako summit, Japan deliberately treated G5 leaders with an unequal manner, and Indian PM Singh complained a lot. Germany and some European countries would like to make G8+N, or G13 (G14) the real core of the global governance system, and other institutions, such as the UN, G20, WTO, IMF and World Bank, and other international treaties and regulations circled around it.
The 2008 international financial crisis changed everything. The writer was at HDP support unit when the financial crisis took place, and thought the future of HDP and L’Aquila- Heiligendamm Dialogue Process or G20 would depend on China and other emerging economies. At last, China chose G20, and G20 was upgraded to a summit, and the primary forum for world economic issues.
3. The Third Approach: China to Build a Formal Relationship between G20 and the UN
The G20 performed well in crisis management, but G20 has its own shortcomings which need to be overcome in order to take the responsibility of carrying out the task of global governance. In terms of representation, G20 is wider than G8 but narrower than the United Nations. 90% of the countries or regions in the world and as many as 20 hundred million people which accounts for one third of the world population are not included in G20.
But in the transformation process of G20, representation and legitimacy are not the main challenges. The main challenges are its decision-making capability and implementation capability in addressing global economic issues. Since G20 is an informal mechanism, its informality has some advantages in coordinating domestic and international political demands, and reaching political consensus. But it also leads to “low legalisation” or “non-legalisation”, which makes G20 resolutions lack the power of regulating and constraining its members.
Another problem is the fragmentation of international economic governance mechanism, which constrains the efficiency of G20. Although G20 is regarded as the primary forum for world economic issues, there are also G7, Brazil, Russia, India, China, and South Africa (BRICS), UN and its social and economic commission, IMF, World Bank, WTO, and many regional or sub-regional economic, trade, and financial arrangements, NGOs, TNCs, and social elites involved in the global economic governance. Besides, global economic issues are not limited to pure economic field, since climate change, development, energy, and food security, etc. are all related closely with world economy. In these fields, G20 also has to compete with the UN. But G20’s representation and legitimacy is far behind the UN.
And lastly, in past G20 summits, the agenda frequently shifted with the changes of hosts. G20 didn’t focus on key and long-term issues that result to the imbalance of the world economy. For China and other developing countries, the imbalance of the world economy is, first of all, the result of imbalance of development. Development is the key to solve many world economic and
social problems.
In the G20 Hangzhou summit, China is building a formal relationship between G20 and the UN by putting the development issue in a prominent status of global macro-economic policy structure, inviting more developing countries, and advancing the Paris climate change agreement. G20 will get more inclusiveness, representation and legitimacy from its relationship with the UN. G20 will no longer be the extension of G7, and is becoming a bridge between South and North, and a real centre of global economic governance. G20 will focus on deep-rooted and long-term problems from now on. In the next summits that will be held in Germany, Argentina and India, G20 will still focus on the development issue.
4. Institutionalisation of G20 and reform of the UN
The transformation of G20 from a crisis management mechanism to a global economic steering committee is the transformation of global governance. In order to keep the transformation of global governance smoothly and peacefully, two principles should be persisted on: The first one is incrementalism in the reform of global governance and its mechanisms, including the UN, IMF and World Bank. Not only China, but also other developing countries agree with that. Second, we should start from international governance, through which the overall objective of global governance can be achieved. Compared with global governance, international governance has a more flexible target and methodology. Both the international governance and the global governance should first focus on issues that are most urgent and can most likely reach a consensus and are most likely to take a joint action such as issues related with climate, energy, food security, combating piracy, anti-terrorism, anti-drug, as well as disaster reduction and prevention. In this way, not only can we increase the chance of success, but also increase mutual trust and confidence in promoting cooperation in other areas. In the future, it’s necessary for G20 to include all these topics that are related to the world economy in its agenda.
The G20 Hangzhou Summit has reached many consensus, but the implementation of these consensus will depend on its members’ initiatives. The Hangzhou Summit has improved the institutionalisation of G20 by adding topics, increasing working groups and ministerial meetings, but it needs further institutionalisation. Maybe in the future it should establish a formal secretariat. It should establish formal relations with the IMF, World Bank, WTO, and Financial Stability Board (FSB), and take them as implementation branches.
What is the relationship between G20 and the UN in the future? Will G20 become the Economic Security Council of the UN like German Chancellor Merkel suggested? If it comes true, I think it would establish a model of reform for the UNSC. Now a serious challenge to the world economy is geopolitical competition and conflict. So we need both the UN and G20. In the process of UN reform and institutionalisation of G20, major powers should play a positive leading role. We hope the UN can solve geopolitical problems, and hope G20 can improve geo-economic cooperation. We hope geo-economic cooperation can alleviate geopolitical competition, and create better circumstances for the resolve of geopolitical competition and conflict. In the Saint Petersburg summit, Syria’s issue of disturbed economic discussion, so it’s better for the G20 to focus on economic cooperation, and leave political and security issues to the UNSC.
Featured image courtesy: Xinhua/Pang Xinglei
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About the Author
Dr. Liu Zongyi is a Senior Fellow at Shanghai Institutes for International Studies (SIIS). His research interests mainly focus on India’s Economy and Foreign Policy, China’s Foreign Policy, BRICS, and G20. He also studied and served as a visiting fellow at DIE (Germany), OECD, CSIS (The US), NIPFP (India), and ISSI (Pakistan).
