Economic, Financial Markets, Government, Politics, Russia

G20 warns that the global economic crisis is not yet over…

WORLD ECONOMY

At the end of the G20 last week, the leading group of nations said that the crisis in the global economy is far from over and more needs to be done to stimulate growth and create jobs around the world.

In a statement issued at the end of their summit in St Petersburg, Russia, G20 leaders welcomed a recovery in the developed world but warned of risks facing emerging markets.

The communique said:

… Despite our actions, the recovery is too weak, and risks remain tilted to the downside.

It listed ‘the main challenges’ facing the global economy, including ‘persistently high unemployment’ particularly among the young, financial stress in Europe and high levels of government debt.

The G20 also called for the withdrawal of emergency stimulus measures in countries such as the United States to be ‘carefully calibrated and clearly communicated’ to minimise volatility on the financial markets.

Speculation that the U.S. Federal Reserve is about to start reducing the level of support for the U.S. economy has plunged a number of emerging economies into turmoil.

The G20 is made up of developed countries and emerging markets accounting for 90 per cent of global output and two-thirds of the world’s population.

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Foreign Affairs, Government, Middle East, Politics, Russia, Syria, United Nations, United States

G20 and America’s defining moment…

WATERSHED MOMENT

The G20 summit that ended in St Petersburg yesterday failed to produce any kind of agreement on the Syrian crisis. The chasm and bridge separating the United States and Russia on Syria is as wide as it has ever been. Yet, few such gatherings in recent years have offered a truer picture of how and where the real balance of global power lies. A genuine watershed in international affairs may at last have arrived; replacing a vestige of what has been referred to of late as the ‘Arab Spring’ – a term synonymous with upheaval and chaos spreading through many Islamic states.

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The two-day gathering in St Petersburg have confirmed many things. It underscored, for example, just how determined Vladimir Putin is in reasserting Russia on the world stage. It displayed quite clearly, too, that a mercantilist China will do nothing to unsettle its economic interests, and in the process laid bare Europe’s total inability to act on its own.

A senior Kremlin official was reported to have said that no one pays any attention to Britain, a ‘small island’. But could the same not be said of the rest of the EU? Germany, for instance, Europe’s economic powerhouse, is notable only for its deafening silence. France, eager to push a military agenda in punishing the Assad regime for its alleged use of chemical weapons, is unwilling to do so without America’s lead. Other G20 participants wring their hands in aghast and disbelief at what is happening in Syria, but most are keen to shriek away from any involvement. At a moment of high international drama, it leads us back – as it invariably does – to the United States and its role in the world.

It shouldn’t have required a Kremlin official to point out Britain’s diminished influence in the world; the empire ended more than half-a-century ago. But, like it or not, with the United Nations no more than a fractious and divided talking shop, the U.S. is the closest thing we have to a global policeman. No country, it has been argued, has the right to behave as such, and America’s actual ability to change history, for all its military might and superpower status, is sometimes exaggerated – not least by itself. We need to look no further than the sorry state of Iraq, a decade after George W Bush’s invasion, to provide clarity to the argument. In any major crisis, however, all eyes turn to Washington, as they are now in Syria as the regime is accused of violating a ban on the use of chemical weapons. Syria is a signatory against the banned use of such weapons, and yet here we have a paralysed UN Security Council that is powerless to enforce an international binding treaty.

With a vote in Congress on the use of U.S. military force in Syria to be held on the 9th September, the next few days will be decisive. Britain’s role on the world stage has been diminished given the veto in the House of Commons last week, but for President Obama the stakes are vastly higher. On Syria, Mr Obama’s approach has been feckless. First, he declared that Assad must go without saying how, and then laid down his ‘red lines’ over the use of chemical weapons. Later, he announced his decision to use force, and more recently has passed the buck to Congress on Capitol Hill. Deep down, many will suspect that he would prefer to stay well out of Syria given what has happened in Iraq, Afghanistan and Libya. Syria is ablaze and arguably much more contentious than anything the United States has dealt with in the past 30-years. Mr Obama’s uncertainty in how to proceed in Syria is resonating in all corners of the world.

If present indications are anything to go on, the House of Representatives could well follow the House of Commons in opposing military action. If so, a definitive moment will have arrived. Unlike David Cameron, Obama will either defy his legislature and go ahead with strikes, or he will acquiesce, and there will be no military response. If military action is taken off the table, not only would Barack Obama’s presidency be gravely weakened at home, but in the eyes of the world so too would the credibility of America as a global policeman. Either way, a watershed is at hand.

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Britain, Foreign Affairs, Government, Middle East, Russia, Syria, United States

Syrian recriminations continue. Is the tide turning towards Russia?

FRATRICIDAL SYRIAN CIVIL WAR

The continued recriminations over Syria remain fast-paced, but there is one central fact that remains unchanged: neither the Syrian President, Bashar al-Assad, nor his enemies have the strength to achieve outright victory. A fratricidal civil war of this scale – in which a third of the total Syrian population have now been displaced – can only end with a political settlement.

A key question is whether Britain’s parliamentary veto and abdication from military intervention (and America’s possible withdrawal under a similar scenario) will make the achievement of such a resolution of political will more or less likely? A case could be constructed either way.

The optimist might suggest that President Vladimir Putin, satisfied that his Western rivals will not tread the path that Moscow warned them most sternly against, could now become a more willing and amenable partner by delivering Assad to the negotiating table. From this stance, a combination of the G20 summit that opens in St Petersburg on Thursday, the humiliation of the British prime minister following last week’s Commons vote, and new doubts that are emerging by the day whether President Obama will execute his threatened punitive strike, all create something of a slender opportunity. If that is so, something good might yet come from the acrimony of the past few days.

Unfortunately, though, the pessimistic scenario looks more likely. Mr Putin now has the glee of satisfaction of watching Britain retreat from the Syria drama and America’s continued prevarication over whether to enforce its ‘red line’ over the use of chemical weapons. Putin is hardly the kind of leader ennobled for his munificence; instead of trying to find ground with his chastened and frustrated opponents, the Russian President is more inclined to press home his advantage and insist that he was right all along. Mr Putin is still angered over the West’s intervention in Libya, and has sought to make Syria an example in various ways.

Russia’s position has always been that the West must stay out of Syria and leave the problem to be resolved by the Kremlin. Some will baulk at that given Russia’s continued supply of arms and munitions to the Assad regime, but Vladimir Putin’s preferred solution is to help the regime in Damascus achieve a Carthaginian peace by crushing rebel units. As for the Syrian President, he is bound to feel emboldened by recent events and his acolytes hailing Mr Obama’s climbdown as the ‘beginning of the historic American retreat.’ If Assad feels that events are turning his way, what reason will he have to negotiate?

Mr Obama publicly declared that his mind was made up in using military force against Assad’s use of chemical weapons which claimed the lives of more than 1,400 civilians, more than a third of which were children. But, his insistence that he must now first ask Congress makes him look indecisive.

It is not inconceivable to believe that another attempt could be made by the British Parliament in the light of any new evidence that may emerge that action is necessary. Despite the setback of last week’s Commons vote, Britain should remain confident in itself as a nation with the will and the means to help shape a better world.

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