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Yaroslav Lissovolik

Programme Director of the Valdai Discussion Club, RIAC Member

My hope is that the focus of the G20 summit will be duly directed at addressing the vulnerabilities in the global economy associated with the risks of a global recession. The latest signals from the IMF and other international organizations as well as the macroeconomic data coming from the largest advanced economies suggests that such risks are real. Unfortunately, given the current geopolitical tensions and the divisions along the North-South axis, there are unlikely to be substantial breakthroughs in the G20 summit in improving global economic governance and international policy coordination.

That being said, there is in fact ample scope for the G20 members to improve coordination not only among themselves, but also with other countries, including small economies. Despite the emergence of various new formats with the G20 such as B20 (business 20) or Y20 (Youth 20) there is a lack of outreach formats to other countries and regions that lie outside of the G20 core. As regards the G20 countries themselves, there needs to be greater coordination in economic policy, most notably in anti-crisis policies of the world's largest economies. There also needs to be more work within the G20 dedicated to ex-ante crisis prevention through the analysis of recession risk scenarios and the possible policy responses coming though G20 policy coordination.

The 2022 G20 summit in Bali, Indonesia, started on Tuesday under the main theme of "Recover Together, Recover Stronger." What should we expect from it? What role will it play amid growing uncertainties and confrontations in the world? Why is Asia, particularly Southeast Asia, increasingly becoming the center of global affairs? Yaroslav Lissovolik (Lissovolik), Program Director with the Valdai Discussion Club and member of the Russian International Affairs Council, shared his views on these matters with Global Times (GT) reporter Xia Wenxin in an e-mail interview.

GT: What are your expectations for the summit this year? How should the G20 better coordinate to deal with common problems and challenges, achieving "recover together, recover stronger"?

Lissovolik:
My hope is that the focus of the G20 summit will be duly directed at addressing the vulnerabilities in the global economy associated with the risks of a global recession. The latest signals from the IMF and other international organizations as well as the macroeconomic data coming from the largest advanced economies suggests that such risks are real. Unfortunately, given the current geopolitical tensions and the divisions along the North-South axis, there are unlikely to be substantial breakthroughs in the G20 summit in improving global economic governance and international policy coordination.

That being said, there is in fact ample scope for the G20 members to improve coordination not only among themselves, but also with other countries, including small economies. Despite the emergence of various new formats with the G20 such as B20 (business 20) or Y20 (Youth 20) there is a lack of outreach formats to other countries and regions that lie outside of the G20 core. As regards the G20 countries themselves, there needs to be greater coordination in economic policy, most notably in anti-crisis policies of the world's largest economies. There also needs to be more work within the G20 dedicated to ex-ante crisis prevention through the analysis of recession risk scenarios and the possible policy responses coming though G20 policy coordination.

GT: How do you feel about the changes in China's role and influence in the G20 over the past few years? What has China's vision of global governance, as well as the initiatives put forward by Chinese President Xi Jinping, such as the Global Security Initiative and the Global Development Initiative, brought to the G20?

Lissovolik:
China's significance and role within the G20 has been rising in recent years in line with its growing share in the global economy and the increasing number of global initiatives such as the Global Security Initiative, the Belt and Road Initiative (BRI) and the Global Development Initiative. China has also actively pursued greater cooperation among the developing economies in the G20 as well as in other international fora such as BRICS/BRICS+. China's particular emphasis placed on openness and multilateral cooperation in the context of the Global Development Initiative as well as the BRICS+ framework has generated great enthusiasm across the Global South, with a rising number of large developing economies (some of which are members of the G20) expressing interest in joining the BRICS grouping. The impact on the G20 from these initiatives is that this international forum becomes more inclusive with respect to the needs and aspirations of developing nations.

There also appear to be second-round effects on the global economy from China's initiatives as they have triggered a response from the developed economies in the form competing projects such as Bring Back Better World (B3W) as well as the EU's Global Gateway - all these projects envision significant allocations for infrastructure development. The problem however is that they are presented at the start as competing projects rather than complements to Chinese initiatives - there is no due connectivity or co-integration of these initiatives with China's more sizeable BRI investments.

More generally, the key paradigm change that comes on the back of China's initiatives is the emergence of a credible alternative in the global economy in form of new international financial centers, new reserve currencies, new sources of growth and investment and new alternative pathways to modernization. China's own economic success in economic development and poverty reduction sets a powerful demonstration effect for the rest of the global economy on the value and the feasibility of economic modernization that accords with the country's historical legacy and future national priorities.

GT: What do you think are the obstacles to G20 solidarity? How will such divergences affect the resolution of global issues and challenges?

Lissovolik:
The main obstacle to G20 solidarity is the increasing rift between developing and developed economies and this is quite similar to the patterns that were observed in other global fora such as the WTO. These disagreements and lack of due focus on the pressing economic issues at hand exact a toll on the global economy in terms of insufficient economic policy coordination, low efficiency in anti-crisis measures and high levels of protectionism. There are also global economic challenges associated with increasing risks pertaining to food and energy security. The G20 format could deliver tremendous benefits to the world economy, but only in case it is more inclusive, open and balanced with respect to the interests of developed and developing economies.

GT: Southeast Asia has become an important venue for multilateral cooperation this year, a year that you have called "the Year of ASEAN centrality." Can you elaborate on what role ASEAN has played in the G20 and the world?

Lissovolik:
ASEAN is at the heart of a region of the global economy that is demonstrating some of the highest growth rates in the world. The share of ASEAN in the world economy has been accordingly increasing in the past decades, while ASEAN has also become one of the most important players in concluding economic agreements with countries and regional blocks across the globe. This in turn not only contributed to greater dynamism for the world economy, but also served to increase its openness through trade accords such as the China-ASEAN FTA or the many FTAs with countries across the globe concluded by ASEAN members individually. It is also important to note the role of ASEAN in advancing digital economic cooperation, with Singapore being one of the leaders in concluding digital economic accords (DEAs).

But perhaps most importantly ASEAN is a major success case in regional integration outside of the Western world. In this regard, it is a source of international best practice and an inspiration for developing countries and regions in the Global South. ASEAN countries have demonstrated their capability in bringing together quite different economies with varying levels of development and income - and despite these differences ASEAN economies demonstrate enviable success in working together - this is something that could be taken on board by the G20 in overcoming divisions.

This spirit of cooperation among regions and cultures is in fact precisely what Indonesia has pursued during its chairmanship in the G20, including with the launching of a new platform to promote interfaith dialogue. Indonesia is the only representative of ASEAN in G20, and in the course of this year it has actively pursued digital transformation as one of the priorities of its chairmanship - an area where ASEAN has made significant headway. Indonesia has also advanced such priority areas for this year's G20 agenda as strengthening global health architecture and energy transition - all these areas are currently among the main exigencies for the global community.

GT: You wrote in July that "given its neutrality and mediation capabilities ASEAN could lead the creation of a global platform for regional integration arrangements - something that it could pursue on the basis of an R20 (regional 20) format within the G20." How likely is it for such an organization to be formed? How would it differ from the G20? What would be the role of China in it?

Lissovolik:
I do believe that ASEAN could take on a leading role in advancing its Asian success story of a regional integration project that could be replicated in other parts of the global economy. Given its success in regional integration, ASEAN could participate in the process of creating a platform for cooperation among the regional integration arrangements and their respective regional development institutions. Thus far within the current set up of global governance there is no mechanism for horizontal coordination/cooperation among regional arrangements - this is one of the most glaring cases of a vacuum in the global economic construct. There is no need in creating a separate international organization to fill this vacuum - ASEAN and other regional integration blocks where G20 countries are members could create such a platform within the G20 itself in the form of an R20 (regional 20) or an Integration 20 (I20).

The benefits from creating such a platform include greater inclusivity for G20 given that it brings far more countries into discussions and decision-making - in effect this addresses the most significant criticism of the G20, namely its exclusivity and lack of representation of the global community. Most importantly, such a platform would allow for a greater voice for developing economies, most notably from Africa. The African Union could become a full-fledged member and one of the most important participants in the "regional 20" platform, contrary to the current G20 arrangement, whereby the EU is the only regional block represented in the G20. Another argument in favour of such a platform is that it would significantly improve the anti-crisis stimuli from the G20, given that there would be scope to use the resources and the coordination capabilities of the respective regional blocks and their development institutions.

Within such a G20 platform for regional arrangements there could be a prominent place for one of the largest regional integration blocs in the global economy that brings together China, ASEAN and a number of advanced economies - namely the Regional Comprehensive Economic Partnership (RCEP). A platform for cooperation among regional integration arrangements could also be created on the basis of the BRICS+ format proposed by China back in 2017 - in this case BRICS-plus (at least one of its possible tracks) could bring together the regional integration arrangements in which BRICS countries are members.

Overall, there is tremendous scope to explore the possibilities for various formats of cooperation among regional integration blocks and their development institutions - this is one of the most significant reserves for boosting international cooperation. For China the format of cooperation among regional integration arrangements is an opportunity to lead developing countries in the creation of a new layer of global governance - a regional layer of governance that would complement the layers of global institutions (IMF/WTO/World Bank).

GT: As Europe faces various crises and finds itself increasingly difficult to maintain strategic autonomy under the influence of the US, is Asia playing a growing role in global affairs?

Lissovolik:
Europe indeed appears to be among the most affected by global challenges in the past several decades - this concerns the 2008-2009 crisis, the European sovereign debt crisis and the current geopolitical crisis. On the other hand, Asia was more resilient in the face of these headwinds and is moving to the forefront of the global economy and international diplomacy. It is increasingly active in mediation efforts and conflict resolution, it has also pursued the creation of new international institutions such as the Asian Infrastructure Investment Bank (AIIB). And then there are also the new regional integration initiatives that lead to the formation of such mega-blocs as RCEP that further position Asia as the center of gravity in global trade and investment flows.

These trends suggest that the 21st century may be the Asian century after all, particularly in case the largest Asian economies such as China, India, Indonesia and other developing economies increase their economic cooperation in international fora and organizations, including within G20.



Источник: Global Times

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