G-Zero

In May 2012, a book titled "Every Nation for Itself: Winners and Losers in a G-Zero World" was published by political scientist Ian Bremmer. The book describes the power vacuum in international politics as no country or group of countries has the political and economic leverage to drive an international agenda or provide global public goods. This power vacuum has been termed G-Zero. The reason of this power vacuum is the sheer decline of Western influence and the rise of domestic focus of the governments of developing states.

Analysis:

(adapted from an Article by Mr. Ian Bremmer published in Foreign Policy Magazine)

• 1975 summit hosted by France that brought together representatives of six governments: France, Germany, Italy, Japan, the United Kingdom, and the United States, thus leading to the name Group of Six or G6.
• The summit became known as the Group of Seven or G7 the following year with the addition of Canada.
• Till the 1990s, G-7 was the most important international bargaining table. The 7 Industrialized members of G-7 shared a common set of values and faith towards the democracy and market driven capitalism as generators of long lasting peace and prosperity.
• In the later part of 1990s, G-7 became US Dominated. In 1997, the U.S. and European policymakers pulled Russia into the club, thus making it G-8.
• The pulling in of Russia to G-7 was not to reflect the shift in the balance of powers but was an effort to bolster Russia’s fragile democracy and help prevent it from sliding back into communism or nationalist militarism.
• The Global Financial Crisis of late 2000s shocked the international system and in September 2008, the ripples of fears that the Global economy was standing on the brink of catastrophe hastened the inevitable transition of G-8 to the G-20.
• ‘The G-20 includes the world’s largest and most important emerging-market states. The first gatherings G-20 in Washington in November 2008 and London in April 2009 — produced an agreement on joint monetary and fiscal expansion, increased funding for the International Monetary Fund (IMF), and new rules for financial institutions. These successes came mainly because all the members felt threatened by the same plagues at the same time.
• This was followed by a phase of recovery in some countries. Then, it was felt that the countries like China, India, Brazil etc. would recover faster than the wealthy west. When the East rebounded, west got panicked. United States was facing an stubbornly high unemployment and fears of a double-dip recession, leading to rise in antigovernment activism. The economic crises in several west countries provoked intense public anger.
• Meanwhile, developing countries moved forward as the developed world remained stuck in an anemic recovery. This was followed by the G-20 losing its sense of relevancy because the wealthy and the developing states’ needs and interests began to diverge.
• The divergence of economic interests in the wake of the financial crisis has undermined global economic cooperation, throwing a wrench into the gears of globalization. In the past, the global economy has relied on a hegemon — the United Kingdom in the eighteenth and nineteenth centuries and the United States in the twentieth century — to create the security framework necessary for free markets, free trade, and capital mobility.
• But the combination of Washington’s declining international clout, on the one hand, and sharp policy disagreements, on the other — both between developed and developing states and between the United States and Europe — has created a vacuum of international leadership just at the moment when it is most needed.

We are now living in a G-Zero world, one in which no single country or bloc of countries has the political and economic leverage — or the will — to drive a truly international agenda. The result will be intensified conflict on the international stage over vitally important issues, such as international macroeconomic coordination, financial regulatory reform, trade policy, and climate change. This new order has far-reaching implications for the global economy, as companies around the world sit on enormous stockpiles of cash, waiting for the current era of political and economic uncertainty to pass. Many of them can expect an extended wait.