‘We Must Turn the G20 into a Proper Organization’

For the first time, Russia is chairing the G20. In an interview in the Russian daily, “Moskovskiye Novosti” - Moscow News, Sergey Karaganov, Dean of the HSE Faculty of World Economy and International Affairs and honorary chair of the Russian Council on Foreign and Defense Policy, spoke about the importance of G20 and Russia’s position in the club.

— President Putin has declared that along with the budget deficits there is a ‘deficit of decisive action’ in the world. Does it mean that Russia will suggest some major steps to revive the global economy?

— According to what I’ve seen so far, Russia is not prepared to suggest any decisive measures. Unfortunately, recently we haven’t been suggesting much in the way of decisive steps, which surprises me. We spent masses of money preparing for the APEC summit in Vladivostok, but didn’t suggest anything of any import there. It was a useful summit, in that it helped to develop the Primorskiy Krai Region, but nothing of any note at all was said there. Besides, I am not sure that Russia has enough intellectual potential at the moment to offer anything new on the economy.  No one anywhere the world knows what to do. A number of contradictory strategies are proposed at the same time and allbeing implemented simultaneously. Germany insist on saving, but the US and some Europeans are, on the other hand, think they can solve the problems by pumping money into the economy.

— What can Russia offer the G20 in general? According to Putin, Russia can benefit from doing something that makes people remember its chairmanship.

— What we can suggest and what needs to be done is to turn G20 into a working organization. There isn’t enough governance in the global political sphere and, even more so, in the global economy. The G8 isn’t handling the job and, effectively, has long ago turned into a giant PR event. G20 is still playing a positive role in this sense, ifonly a calming one: if we look carefully at measures the club has proposed and what has actually been done, the list will turn out to be very short indeed.

For the G20 to be effective, it needs to be made into a fully functioning organisation with its own bureaucracy. That would be a great step forward. Probably, it should specialize in economics, and G8, with addition of China and India, should take geopolitics.

— In summer, after the summit in Mexico, Putin spoke about G20’s role as a platform where fair rules for sustainable development of the global economy could be developed.

— This is rather a philosophical idea. I’ll say it again, without bureaucracy, to constantly look for solutions, check them, lobby for them, and, ultimately, have a vested interest in the development of the organization, nothing will survive in the modern world. There are examples of organizations which have outlived their usefulness and even have become somewhat harmful, but are still functioning effectively, simply because they are well structured. A classic example is NATO. And I think that it is really important to develop the G20, because the vacuum in governance the economic sphere is turning into an abyss.

— How would you evaluate Russia’s place in the G20?

— In terms of economic indicators, Russia is among the top ten countries. If we multiply it by political power, Russia is the third world power in all regards, despite its modest economy. We also need to remember that the G20 is not 20 countries, but 19 countries plus the European Union. In addition to that, some large countries have not been included in the G20, instead of them some small economies have been shoved in, so that they should represent someone. That’s why everything here is conditional.

— We are in a better position than Europe in terms of the crisis, but out of the BRIC countries, they say, that Russia by all indicators is probably near the bottom of the list.

Among BRIC countries Russia has the highest GDP per capita, by a long way. The problem is that we could lose it if our economy only develops at a stagnant rate. In the last 3 or 4 years we have actually fallen into stagnation.

— As chair of the G20, does Russia have any additional opportunities?

Yes, of course. We are preparing all the documents, and Russian officials will manage the meetings of all the “sherpas”. This means that we have some opportunities - we just need an agenda and a willingness to implement it. I’m still not sure we have that, but anyway, organizing a G20 summit increases a country’s capitalization. We shall be at the center of the global political and economic community.