By Ian Bremmer and David Gordon
For the first time since the end of World War II, no country or bloc of countries has the political and economic leverage to drive an international agenda. The United States will continue to be the only truly global power, but it increasingly lacks the resources and domestic political capital to act as primary provider of global public goods. There are no ready alternatives to U.S. leadership. Europe is preoccupied with a multi-year bid to save the eurozone. Japan has complex political and economic problems of its own, and rising powers like China and India -- are too focused on managing the next stage in their development to take on new international responsibilities. We're referring to this new era as G-Zero, because that phrase captures the lack of international leadership at the heart of so many emerging political and economic challenges.
For a moment following the financial crisis, the G-20 looked like a forum in which the most influential developed and developing states could coordinate effectively on credible solutions to transnational problems. With so many more players at the table, there appeared to be a broader agenda and less room for agreement than with the G7, but members shared an overriding interest in the stability of the international system, and G-20 leaders were willing to work in concert to stabilize the global economy.
Yet, G-20 cooperation in 2008 and 2009 proved a short-lived collective reaction to panic, safety in numbers in the face of imminent disaster. The first indication it wouldn't last came in Copenhagen a year ago, following a climate summit marked by such disunity that the outcome was worse than if no meeting had taken place. Climate proved a sufficiently low-grade priority in the middle of a hard-fought global economic recovery that the frictions were largely forgotten. That's less the case with last fall's IMF meeting in Washington and G-20 meeting in Seoul, which ended with warnings of a global currency war and of a return to the national economic barriers of the 1930s. During both summits, the economic strategies of the world's leading economies were set in opposition to one another.
Why the G-Zero and not the formation of blocs that allow countries to pool their influence to get things done? Because the default policy response to a breakdown in global economic governance is every man/nation for himself. As demonstrated even in a politically integrated Europe, without adherence to common rules, there's no such thing as collective economic security. In the G-Zero, domestic constituencies will become increasingly effective in pushing populist agendas on trade, currency, and fiscal policy.
As geopolitics takes on an increasingly geo-economic hue, all the G-20 pledges to "avoid the mistakes of the past" will not prevent the G-Zero from taking hold and sparking other forms of conflict.
Next week, we'll dive deeper into the eurozone crisis, which takes the no. 2 slot on our list of top risks for 2011.
Ian Bremmer is president of Eurasia Group. David Gordon is the firm's head of research.
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The Call, from Ian Bremmer, uses cutting-edge political science to predict the political future -- and how it will shape the global economy.