It was inevitable in the wake of the G20 summit that world leaders would celebrate whatever agreements they were able to hatch.
Predictable too that the media would pick over the event to ascertain which countries had been successful in pursuing their own particular goals and strategies.
But from a global perspective, the summit was significant in the way it signalled a shift away from US and Western European power.
The balance of economic power in the world has simply changed so much that more countries need to be included.
It’s quite likely the traditional powers of the US, Western Europe, and Japan would have preferred to address this crisis amongst themselves if it was possible. But it wasn’t.
And since the last G20 conference was held back by an outgoing and unpopular US president, this was the first summit of real importance to meaningfully include such diverse countries such as Brazil, China and Indonesia. The countries of the G20 now include about two-thirds of the world’s population.
But what was more striking was the boldness these newly included countries showed in confronting the traditional world powers, often quite directly.
Obama and Brown took these jabs in good humour; Obama because he was eager to demonstrate his willingness to engage with the world and Brown because he was determined to make the summit a success. And despite the difficulties presented, both can claim to have been fairly successful.
But these confrontations were certainly not what we have been used to seeing at these meetings of the “Ad Hoc Committee to Run the World,” in the words of Mark Weisbrot, co-director of the Washington-based Center for Economic and Policy Research.
Through such exchanges a few uncomfortable truths were revealed. A crisis that was caused by the rich countries is now affecting the more fragile, poor countries. As badly as we might feel we are affected by the downturn, economic shocks in poverty-stricken countries often mean people die.
And the crisis seems to have sprung directly out of the neoliberal ideology that the US and its client organisations had preached so vehemently and even forced upon the developing world for the last thirty years.
As a result, many of these countries trust the Anglo-Saxon centres of power less and aren’t willing to pay for our crisis. And they weren’t afraid to say so.
First, there was Brazilian president Luiz Inacio Lula Da Silva’s now-infamous comment that the crisis was caused by “white people with blue eyes, who before the crisis appeared to know everything and now demonstrate that they know nothing,” and that therefore the world’s poor and darker-skinned majority shouldn’t have to pay for the mess they made.
He looked straight at Brown, Joe Biden, and Spanish PM Zapatero and called their countries responsible for the crisis. This, however, didn’t stop Obama from later calling Lula “my man” and “the most popular politician on Earth”.
Argentina’s President Cristina Fernandez de Kirchner attacked the consequences of neoliberalism and deregulation, and complained that countries such as her's were never given room to consider the premises of these “sacred icons and totems which had been enshrined and about which nobody could discuss or question.” Nor was she shy of making a public display, on British soil, of her ongoing support for the Argentine control of the Falkland Islands.
But by far the most surprising and significant outburst came from China, which had previously remained more or less silent on global economic matters since the Cultural Revolution.
Beijing broke the silence before the summit to lambast American irresponsibility in containing the effects of its crisis, specifically in its role as supplier of the world’s international reserve currency. Chinese central bank officials endorsed a movement away from the dollar in favor of a new supranational currency.
The use of the dollar as the main reserve currency has been one of the cornerstones of American economic power since the Bretton Woods agreement in 1944, and China holds massive amounts of dollar reserves due to huge trade surpluses with American consumers. They are now declaring they’re no longer willing to play this role passively if the US doesn’t get its act together.
Russia, though not as exposed to losses on US Treasury bonds as China, had initially floated the idea of a new international currency, based on the Special Drawing Rights of the IMF. President Medvedev, speaking at the London School of Economics, later echoed Chinese criticisms, saying that “countries whose currencies prevail” in the international system were not taking sufficient responsibility for the instability — a clear challenge to US economic power.
President Obama, despite his eminent popularity, could not find answers for these diverse criticisms. It may very well be that good answers don’t exist. There are certainly no easy ones.
By inviting more of the world into the global decision-making processes, the US and its close allies are finding that they have to deal with the prickly consequences of a changing balance of power and the accelerating shift to a multipolar world.
We aren’t there yet, however. The US still remains very powerful. It is telling that the issues of reserve currencies, global trade imbalances, and even extensive re-regulation of global finance were off the table at the G20 talks.
But the direction is clear. For the moment, of course, a series of outbursts from the leaders of some of the world’s poorer populations remains largely symbolic. But in politics, symbols matter—especially when they symbolise economic changes which are as profound as they are real.