Monday 23 Jul 2018 | 00:37 | SYDNEY
Monday 23 Jul 2018 | 00:37 | SYDNEY

World economy: G-zero hour


Mark Thirlwell

2 February 2011 16:00

Two themes I emphasised over the course of last year were (1) the return of geo-economics; and (2) the challenges facing global governance in general and the G-20 in particular, in a world divided between faltering developed economies and overheating developing ones. One interesting take on some of these issues is Ian Bremmers's idea of the G-zero, which is ranked first in the Eurasia group's top risks for this year

According to the Eurasia report, G-zero is their name for an era in which the world's major powers set aside any aspirations to global leadership and instead look inward for their policy priorities, and where the institutions of global governance 'become arenas not for collaboration, but for confrontation.'

The developed economies no longer have the clout to run the world economy – hence the eclipse of the G7 and its replacement by the G-20. But in the G-zero view of the world, the G-20 has proved unable to deliver an effective replacement. Instead, 'domestic constituencies will become increasingly effective in pushing populist agendas on trade, currency, and fiscal policy' and geo-politics will take on an increasingly geo-economic hue.

It's an interesting take, and I have a lot of sympathy with much of the diagnosis – although I'm not ready to write off the G-20 just yet, in spite of all the very real difficulties it faces.

Photo by Flickr user jonas_k.