Friday 17 Aug 2018 | 04:12 | SYDNEY
Friday 17 Aug 2018 | 04:12 | SYDNEY

The 21st century concert of powers


Graeme Dobell

28 October 2008 08:50

What an irony it is that George W Bush might, at the death of his presidency, identify the shape of the 21st century concert of powers.

Bush has convened a crisis summit of the G20 at the White House on 15 November. By then, the world will know the result of the US election and George W. will be a lame duck with nary a feather left. Yet this summit may be remembered for what it says about future power relationships (and not just economic power). The lame duck summit will help coordinate responses to the meltdown. Just as importantly, it is one step toward the understandings on which concerts must be built.

The G20 grew out of the meetings convened by President Clinton in 1998 to discuss the Asian financial firestorm. A decade later, Asia will go to Washington to talk about solutions to the American crisis.

Before Kevin Rudd flies off to Washington he could usefully have a chat with Australia’s greatest fan of the G20, Peter Costello. The previous Treasurer’s embrace of the G20 put him at odds with the general scepticism about multilateral solutions that characterised the Howard Government. In his memoirs, Costello wrote:

My view is that the G20 is an important international institution. It is small enough to allow real participation from the Finance Ministers and central bankers around the one table. It represents two-thirds of the world’s population and around 90 percent of gross national product.

Yet as the G7, ASEAN and APEC all prove, it seems more acceptable to get leaders together to talk about economics than about harder sorts of power. The financial flavour is one way that the 21st century concert will differ from the 19th century predecessor, with its explicit aim of avoiding war and maintaining Europe's balance of power.
But in turning to how the G20 can be used in relations between Tokyo and Beijing, there are some 19th century echoes: Asia's fluid power balance and surging military spending (whether it is an Asian arms race or arms stroll). And on that score, the just concluded Beijing summit of East Asian leaders is as notable for the bilateral agreement on the need for a Beijing-Tokyo hotline as the deal to create a $US80 billion Asian monetary fund. 
Japan officials said Prime Minister Taro Aso had agreed with China’s Premier and President on the need 'to conduct frequent and timely exchange of opinions through a telephone hotline.' Whatever the Cold War connotations, China seems to like the superpower equivalence conferred by a hotline. Part of China’s technique for dealing with George W Bush was the slow development of the protocols for a Beijing-Washington hotline. 
By agreeing to set up the $US80 billion fund, the 13 Asian leaders (the 10 ASEANs plus China, Japan and South Korea) are building on the eight-year-old Chiang Mai Initiative. The Initiative was Asia’s signal that it would never again submit to the Washington consensus as it did during the 1997-98 crisis.

The Chiang Mai structure was based on bilateral currency swaps with some secretarial work supplied by the Asian Development Bank. It was an ad hoc structure designed to bridge the chasm between China and Japan. That chasm may also threaten the new Asian fund. Perhaps the significance of the Beijing-Tokyo hotline will fall when China has enough confidence in Japan to hold big currency reserves in Yen, instead of US dollars and Euros. 

One other thought for Kevin Rudd as he heads off to Washington next month. He should take 20 copies of Coral Bell’s work, 'The end of the Vasco da Gama era: the next landscape of world politics'. A dose of Coral would help the G20 to lift its eyes beyond the lame duck summit to contemplate the possibilities of a 21st century concert with a distinctly Asian flavour.