Mea Culpa

Earlier this week I sneered cynically at the possibility that this could be a significant meeting , and months back I was pretty rude about the G-20.

Today I have to say, I’m eating my hat - or at least part of it. Not so much on the details of the agreement, although first glance makes these seem good in themselves – increased money for the IMF, arms discussions with Russia, action on tax havens – but because of the wholly constructive atmosphere seems to have characterised this summit. For the first time in a long time, possibly ever, we saw a functional meeting of leaders representing over three quarters of the world’s economy - in which all participated, if not as equals then at least as actors. They did so because there was a recognition from the great powers that growth required action alongside the BRIC nations and Saudi Arabia. And they did so because, despite all the talk about the death of Thatcherism and Reaganomics, more than at any point in history there is a basic convergence around the world on the fundamentals of how to manage an economy. The truly enormous changes represented at this summit were not just about the balance of regulation and deregulation, although these are of course profound, they were (a) that the G-20 is really now a group of twenty; and that (b) it is possible for a new concert of great powers to emerge.

This crisis was never just about the risky behaviour of bankers in Wall Street and Fannie Mae overlending, it was also about the imbalance in global trade patterns, fuelled for so long by loose credit, collapsing, and a rebalance in global power finally coming about. This rebalancing took a significant step forwards today. That the solution will be engineered by China and Saudi Arabia as well as Europe and the United States requires a different approach to politics from now on. Money, as they say, talks.

A great deal of this shift can be laid at the door of a single man: Barack Obama. The approach he took to negotiations by all accounts could not have contrasted more profoundly with the hectoring and haranguing that nations around the world had become used to under George W. Bush. That sincere and cosmopolitan leadership in the United States can have such an immediate impact is not only a testament to Obama’s political assets, it’s further proof of what a terrible block on progress his predecessor was.

Fundamentally, Bush concerned himself with what were, for want of a better phrase, imperial politics. His primary concerns were with regions within the informal control of the United States – especially in the Middle East. Obama’s approach seems fundamentally more macro-political than this, closer to Franklin Roosevelt than Woodrow Wilson in its realistic appraisal of the importance of great power in the global game. It’s no coincidence that the great diplomatic coup on the side of this meeting was with Russia; this has been coming for months now.

Continue to expect Obama’s attention to be as fully focused on Russia and China as Afghanistan in the next three years. Indeed, Russia and China (and Iran) may ultimately provide the roadmap to Kabul.

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