Germany and China To Provide Global Leadership?

With the US poised to become more inward-looking just as the need for a global governance platform gets even more pressing, the handing over of the G20 presidency from China to Germany should provide an opportunity to move it from a narrow club to a broad governance platform.

Especially for Germany, as she thinks about the agenda it will pursue during the G20 presidency, the time is right and the country's clout is such that German leaders should step out of the continuity dynamics that has characterized recent G20 processes and have the courage to propose a major overhaul with global governance ambition.

In a nutshell, Germany while presiding over the G20 should propose making the process and organization more transparent and inclusive--hence more legitimate as a global governance platform. While at it, Germany should also propose, in parallel, turning the whole of the OECD into its think tank-cum-secretariat (... but that deserves a separate post). The G20 process and the OECD both suffer from a "by invitation" club format that severely limits their global credibility.

The G20 has its origins in the financial crisis of the late 1990s and was created as a forum for finance ministers and central bank governors to coordinate policies. The 20 consist of the European Union and 19 individual countries--which were chosen behind closed doors by senior officials from Canada, Germany and the United States reflecting concerns and relationships of the moment. The list of G20 members is questionable and has not kept up with the times but that is not its major flaw. The central issue is one of universality (poorly addressed by the practice of inviting some countries and international organizations to attend the meetings) and legitimacy (membership by invitation and without transparent criteria).

With two CGD co-authors a few years ago we analyzed the issue and proposed a new approach--with transparent membership criteria for permanent members and rotating representation for the rest of the countries--which would achieve both the objectives of legitimacy and universal representation while maining the effectiveness that comes from discussions taking place around a manageable-size table (RAMACHANDRAN, V., RUEDA-SABATER, E. J. and KRAFT, R. (2009), Rethinking Fundamental Principles of Global Governance: How to Represent States and Populations in Multilateral Institutions. Governance, 22: 341-351).

The proposal remains valid and its consideration is now urgent as global challenges--from health to finance to climate change) keep only getting more complex and pressing. Just as important, next year's G20 process presents a unique opportunity for leadership by a country with the clout to spearhead changes of global significance.

A new G20 (even better if supported by a re-oriented OECD--more on that in a separate blog) could become important assets for the international community and provide the effective, nimble platform for global coordination and the promotion of global governance that the world now lacks. It is time to move from the narrow approach of "by invitation" clubs to a broader and more contemporary platform to facilitate global governance.