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Crises

Can Germany handle crisis management for the G20?

Nationalism and isolationism are on the rise globally. With Germany chairing the next G20 summit, Berlin is hoping to persuade the key industrial and developing countries to change direction. But is this going to work?

For the opening event to mark the start of Germany's chairmanship of the G20 Summit, a seven-voice choir sang three variations on the following text:  "Da Pacem – Give us peace." It was a specially composed music program with a clear political message. As Finance Minister Wolfgang Schäuble said in Berlin during his welcome speech to colleagues, as well as the heads of the central banks of the most important industrial and developing countries, "The desire for peace and a better world is also the hope of all attending the G20."

This is a noble aspiration at a time when the world seems to be beset by crisis. And it is generally agreed that it's the big players among the G20 – who increasingly seem to be working against each other, rather than with each other – who have significantly contributed to the global crises. Apart from the G7, made up of Germany, France, Great Britain, Italy, Japan, Canada and the USA, countries in the G20 include Russia, as well as the large developing countries, China, India, Brazil, Mexico and South Africa. Further countries are Argentinia, Australia, Indonesia, Saudi Arabia, South Korea, Turkey and the European Union as a whole.

How can protectionism be stopped?

In many of these countries there is currently a trend toward rejecting globalization and returning to the assertion of nation states. Not least, the future US president, Donald Trump, has said he will support protectionist measures and give US interests clear priority in his trade and economic policies. The Brexit vote and recent events in Turkey also point towards isolationism.

China G20 Gipfel in Hangzhou Gruppenfoto mit Kanzlerin Merkel (picture-alliance/AP Images/Y. Shimbun)

Group photo at the last G20 summit in Hangzhou, China, on September 4, 2016

During the German G20 chairmanship, Berlin is hoping to set a counterpoint to this trend. The motto for the coming year is, "Shaping an interconnected world." Globalization has significantly improved the lives of hundreds of millions of people. As Minister Schäuble said, "We can't turn back globalization and we wouldn't want to either. But we have to get better at shaping the direction it takes."

Restraint rather than exaggeration

Many people deplore the growing divide between the very poor and very rich, between the elites and the rest of the population. "We have to ask ourselves how we are going to hold society together, how we can show restraint in the face of such extremes," Schäuble said. But this is one of the strengths of the G20. In Schäuble's view "it offers member states the chance, even in times of crisis, to talk openly and work on possible solutions together."

German Chancellor Angela Merkel has offered similar arguments. Merkel has stressed that history has shown that retreating and focussing on one's own country has, in the end, never brought any benefits, but rather caused great damage. For Germany, this group made up of the most important developing and industrial countries, has a responsibility to take on the urgent challenges of globalization. "We have to learn from this isolationist movement and that means talking openly about existing problems."

Emphasis on Africa

The G20 is based on three cornerstones, which can be summarized as, "maintain stability, improve sustainability, take responsibility." Stability, in this case, primarily refers to the national economies of member states. This means cooperating on questions of international finance and taxation as well as pursuing issues regarding employment, trade and investment. The agenda for sustainability includes looking at the digitalization of the global economy, as well as the Agenda 2030 for sustainable development and the Paris climate treaty.

G20 Gipfel Angela Merkel 15.11.2014 (picture-alliance/RIA Novosti/S. Guneev)

Chairing the G20 will be a real challenge for Chancellor Merkel

But, above all, Germany wants to strengthen the role of the G20, making it a community of responsibility. Sustainable economic progress in Africa is an overriding concern. According to Finance Minister Schäuble, "Private investors are the key for sustainable economic development and for combating unemployment in Africa." There must be concrete measures put in place to improve the standard of living on a long-term basis and creating a stable framework for investors. This includes expanding infrastructure. In June, a conference will be taking place in Berlin focussing solely on the topic "Partnership with Africa."

Suit the action to the words

Heads of state and governmental leaders will be meeting in Hamburg for the two-day G20 Summit at the beginning of July next year. The Hanseatic city will become an international stage and the German chancellor will, on this occasion, be receiving the new US President Donald Trump for the first time. A few months out from the upcoming federal elections in September, this can only benefit Angela Merkel. She will be able to present herself in Hamburg as a global politician with great responsibilities.

A closing document will be signed by heads of state and governmental leaders at the summit. This document will reflect all the agreements complied by diverse working groups in the first half of 2017. According to Finance Minister Schäuble, in the end the success of the G20 will not be measured by the documents created. The best intentions will mean nothing unless they are followed by action. "We have to make sure that the promises we make to the world will also be fulfilled." This is the only way to tackle the growing scepticism in the world's population.

 

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