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Our G-Zero World: Living in a leaderless international system Our G-Zero World: Living in a leaderless international system

Cherished, or at least long-established, assumptions about how the world should be governed and how peace and prosperity can be fostered have been thrown up in the air. Most prominent among the disruptors is President Donald Trump, but it would be wrong to think the disruption will be over when his term ends in 2020 or 2024. Wider and longer-term forces are also at work.

Those worried by the disruption and keen to protect the status quo talk about it as a set of threats to “the rules-based order”, or as some idealists call it “the liberal rules-based order”. By this they mean the set of global institutions set up after 1945 including the United Nations, the International Monetary Fund, the World Bank and above all the World Trade Organisation. Gradually, those institutions expanded their membership beyond what was essentially the victors of the Second World War and set about agreeing on rules to govern all sorts of international engagement, some of them later reaching into domestic affairs: trade, investment, aviation, shipping, telecommunications, finance, territorial boundaries, armaments, human rights and many more. Global rules sat alongside bilateral and multilateral treaties. Many mechanisms were set up to enable disputes between nations to be adjudicated and settled. Security alliances, notably between the United States and others, acted as anchors for peace.

Very visibly, President Trump has little time for all these institutions and rules, and especially for independent settlement of disputes. Since entering office in January 2017 he has disregarded many of them, challenged or rubbished others, and has sought to set his own rules of the game. His election reflected widespread disenchantment among voters both with recent economic trends and with the results of America’s international military and diplomatic engagements. And that disenchantment has also been seen in several European democracies too, including Britain, Italy, Austria, Sweden and France.

So if Trump and similar nationalist-populist politicians are the cause of this disruptive threat, perhaps the right response is simply to be patient and wait for the electoral cycle to turn again? As long as democracies remain open and free, the political pendulum will be likely to swing again.

That may prove to be the case. But there are two big reasons for doubting it. The first is that Trump and the electoral swing towards disruption are not really the most powerful force at play. The second is that, as a result, there is a bigger issue at stake even than the preservation or destruction of the rules-based order.

The clue to this lies in that very concept of the rules-based order. Hardly anyone really talked about such an order existing, let alone being challenged, until about 10-15 years ago. The reason is not that there were no rules, nor that there was no order. It is that before the turn of the millennium, it was clear who was playing the key role in setting the rules and in directing whatever order existed or was developing: it was the United States, along with the network of like-minded and often allied countries, all of them democracies, that we had come to call “the West”.

The rise of China during the 1990s and 2000s to become the world’s second biggest economy and second most powerful military superpower changed that fundamentally, and probably for ever. Alongside China’s growth came the rise of other, smaller, emerging countries all over the world, making it clear that power was becoming more dispersed and that rule-setting and order maintenance now had to involve a wider group of nations rather than just the West.

The result was that a world previously steered essentially by the “Group of Seven” rich industrial nations (the US, Canada, Japan, the UK, France, Germany and Italy) recognised the need to replace or supplement that G7 with the much broader “Group of 20”, including China, India, Brazil, Saudi Arabia and other formerly poor countries. That G20 came into being just as a new challenge emerged: the 2008 Global Financial Crisis, rooted in America and Western Europe, which was the worst financial collapse the world had seen since 1929.

That 2008 crisis simultaneously made the G20 necessary, discredited the West, especially the USA, and produced the fractures and grievances that led eventually to the election of Trump, to Britain’s vote to leave the European Union, and the rise of populist/nationalist parties all over the EU. The world thus needed a new order, and new way of setting rules just at the time when the old rule-setter was growing negative about the whole idea of an order and of rules. And under President Trump, the US has turned hostile to the very network of alliances, especially in Europe, on which it had depended for a large part of its global influence.

So the world, in need of a G20 type forum ended up instead with what Ian Bremmer, chairman of the Eurasia Group political-risk consultancy, memorably described as a G-Zero world, one with no country willing or able to exercise leadership. Now, there are two main ways out of this situation. The world might resume its previous path to a collective, multilateral, G20-type leadership. Or it might move from today’s G-Zero towards a de facto G2 world: one in which two countries, the USA and China, negotiate over rules of all kinds and then impose their agreements on all other countries.

In a world in which dictatorial or demagogic governments have become more prominent, a G2 outcome has become likelier. It would be a recognition of the fundamental importance for economic, legal and military affairs of the two superpowers, the US and China. And unlike the Cold War, when the face-off between the USSR and the USA dominated world affairs, this time the economic relationships between the two superpowers are at least as important as their security relationship. Such a G2 outcome would certainly be the preference of the current leaders of the two countries, President Donald Trump and President Xi Jinping.

Yet the alternative is also possible, if other countries, all over the world, consider multilateral institutions and rules important enough to defend and to fight for. The battle over what sort of order and what sort of rule-setting processes will follow today’s G-Zero world is under way. The outcome is far from predetermined.