A divided house of global governance cannot stand

The spirit of the Congress of Vienna, where great powers assembled to effectively govern the world, has no place in the contemporary international community. The G20 is sorely lacking in legitimacy and must change.

Though rising deficits and growing unemployment still plague rich and poor countries alike, it appears that the worst of the world’s financial crisis is over. Now, the question becomes how the international community can devise exit strategies from the “Great Recession”.

That conversation has already started and it will, to a large degree take place in the Group of 20, culminating at the G20 Summits in Canada in late June and in South Korea in November. In spite of its leading role in the response to the global financial, economic and development crises the self appointment of the Group of 20 represents, from the point of view of international law and multilateral principles a major step backwards in the way international cooperation has occurred since World War II.

Over the past few years, the G20 has rapidly established itself as the premier forum for international financial and economic decision-making. It has replaced the Group of 7 and Group of 8, and is progressively sidelining established international organizations such as the World Bank, the International Monetary Fund, and the United Nations.

With each meeting it holds, the G20 is institutionalizing itself as a major body of global cooperation and governance and the political significance goes beyond saving the global finance system.

That development has had its benefits. The unprecedented cooperation and coordination the G20 enabled among established and emerging powers helped stabilize a world economy driven to the brink by financial crisis and contagion, thanks to rapid and massive intervention in global markets.

But now that the worst of the crisis has begun to fade, the G20 should address the question of its own legitimacy and evolve to better reflect the interests of the nations its actions affect.

To be sure, the G20 is more representative than the G7 and G8 bodies of industrialized nations that preceded it – but it is sorely lacking in legitimacy. It is not an elected body, it is a self-appointed group, established without the consent of other nations. A number of countries that have been central to international cooperation in the past, including Norway and the Nordic countries, are excluded from direct membership. Low-income countries and the continent of Africa are almost entirely without the needed representation.

Whereas the G7 was a group of the world’s richest economies, the G20’s composition lacks such clarity; indeed, a number of non-participants, including the Nordic countries, are major financial contributors to development and to the Bretton Woods institutions and they are of greater “systemic significance” and have a larger GDP than several G20 countries.

As the response to the financial crisis showed, there is value in having an effective, smaller forum of nations, equipped to act quickly when necessary. But, within that framework, there are simple ways to make the G20 more representative of the world it influences.

As a first and immediate step, G20 members and non-members should consult on a framework for interaction.

More fundamentally a system of geographical constituencies – along the lines we already have at the IMF and the World Bank – freely constituted and with the present G20 members as a core, would go a long way in remedying the weaknesses of the present system.

For instance, the Nordic and Baltic countries have long been effectively represented at the IMF and the World Bank through a regional constituency, a model that could be usefully replicated within the G20.

After all, the global economy is just that: global. We live in an interconnected world, where any country’s economic decisions can have a bearing beyond its borders, with Greece’s recent debt troubles just the latest example. Representation at the G20 will become all the more important as its agenda moves beyond economic concerns to include issues like public health, development, and climate change – issues with real economic and political consequences for all nations, including those who currently have no voice at the G20 table.

Respect for international law and global legitimacy as the basis for multilateral cooperation is a necessity, in the interest of all countries. It is also a tradition Norway holds dear, as one of the largest contributors to development aid and international organizations worldwide. Our faith in multilateralism is derived not from naïveté, but from hard-nosed idealism, forged in the aftermath of a brutal war that nearly tore the world apart. The founders of the great post-war institutions recognized the merit of limited or weighted membership within the larger bodies – but they also insisted on the importance of multilateral approval anchored in international law for these measures. Now is not the time to turn back the clock.

We are no longer living in the 19th century. The spirit of the Congress of Vienna, where great powers assembled to effectively govern the world, has no place in the contemporary international community. If the G20 cooperation should effectively result in decisions being imposed on the great majority of other countries, it will quickly find itself stymied. The house of global governance cannot stand if divided against itself.