Obama's G20 Troubles

Huffington Post Canada

November 3, 2011

The first day of the French G20 is a good indication the U.S. is losing its dominant role -- and even strong interest -- in the G20. By way of contrast, with the pivotal role that the U.S. enjoyed in the time-span from the original Washington, DC in November 2008 up to the Pittsburgh Summit in September 2009, the U.S. has gone another big step in losing its exceptional status at Cannes.

To be sure, French President Nicolas Sarkozy held bilateral talks with President Obama in the first hour of the summit, but this seems to be almost a symbolic gesture that reinforces the lost of American instrumental sway over the other components of the forum. After the one-on-one, Obama and Sarkozy gave a brief press conference. But the tone of Obama's comments spelled out an almost complete disengagement with the G20. The only response directly related to the G20 was an acknowledgement that the two leaders talked about the Greek crisis. However no details on concrete points were provided. Obama preferred to talk instead about issues that had no real bearing on the G20. In a signal that his mind might already be on his own hosting role of the G8 in Chicago next May, Obama focused on the Iran nuclear issue before going on with references about the long U.S.-French relationship and the recent birth of the Sarkozy's daughter.

The real action in Cannes comes in two broad sweeps. The first is by default (if that is not too sensitive a word) from the fall out from the Greek/European debt crisis. On this front, it can be argued that the U.S. is well out of it, with the scramble at the summit coming from the G20 members of the Eurozone and European Institutions. This jumbled atmosphere was exacerbated by the appearance by Greek Prime Minister George Papandreou in Cannes, in the wake of his decision to call a referendum on the bailout package program that contributed to the never-over-till-its-over atmosphere around the summit.

The main action by design, although in a form with more awkward dynamic than commonly appreciated, is the ascendant role of the BRICS. As the Eurozone countries met in problem mode, the BRICS caucused together to see how far they could go in the way of coordinated action. The big question is whether the rise of BRICS is really the new big force in international politics. The BRICS are united on a few things, as indicated by their collective voice on the preference for the bailout funds be routed via the IMF, as opposed to European centered institutions being the lead vehicles. Yet on other issues the BRICS do not speak with a united voice, as evidenced by the reluctance of China to be part of a purported BRICS 'rescue' initiative mooted by Guido Mantega, the Brazilian finance minister, in October.

Returning to the eurozone crisis, a common view is that President Obama is better leaving the issue to others rather than taking a more active role when the U.S. has so many domestic problems of its own to deal with. The U.S. election will be fought over domestic jobs and wider economic conditions, not on the Greek or for that matter Spanish, Italian or even French troubles.

Still the costs on the U.S. for its lack of leadership will take a toll over time. President Obama came into office as a champion of a revitalized multilateralism with the G20 as the pivotal forum. Personally, I can remember the mood of enthusiasm which greeted his arrival on the G20 scene in London back in April 2009.

From Cannes, it is clear that if not an ordinary country, the U.S. is no longer an indispensable country. At the Toronto G20 Summit in June 2010, Obama could not convince even his strongest allies (including the UK and Canada) that an approach privileging stimulus over austerity should be continued. Now, with his resources drained from successive quantitative easing initiatives and with congressional gridlock, Obama has little in the way of structural power as projected through the G20. What it needs to mobilize are the same skills as any other country in the forum, concerted forms of entrepreneurial and technical capabilities. Without attention to these details the once exceptional standing of the G20 will be furthered eroded well beyond Cannes.

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