Why the G20 matters now for both Saudi Arabia and the international community

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France's President Emmanuel Macron (L) shakes holding a joint media conference with Argentina's Mauricio Macri at Casa Rosada presidential house in Buenos Aires on November 29, 2018. (AFP / Ludovic Marin)
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G20 summit banners are pictured ahead of the leaders' meeting in Buenos Aires, Argentina November 29, 2018. (Reuters)
Updated 30 November 2018

Why the G20 matters now for both Saudi Arabia and the international community

  • The world is hoping the US and China will resolve their trade war
  • Saudi Arabia will showcase Vision 2030 on the global stage

DUBAI: The summit of the G20 nations assembling in Buenos Aires comes at a crucial time in world affairs, as well as a critical juncture in the economy of its host nation, Argentina.
For Saudi Arabia too, the meeting comes at an important crossroads – an opportunity to move its economic transformation strategy onto another level in the face of challenges at home and abroad.
While public perception of the G20 is based on the power-play politics on display over the traditional 48 hours of summitry, behind the scenes the gathering is a forum for the resolution of economic and financial issues.
The two days of in-your-face events are preceded by more discreet meetings of business leaders and financial officials — the legendary “sherpas” — from the member countries and their invitees; their discussions are decidedly economic, rather than political; their implicit agenda is to maintain economic stability within the existing financial framework.
Maybe this is why, over the course of the 10-year history of the G20, it has attracted more criticism and opposition from the left wing, and physical opposition from violent extremists, than any other multinational gathering.
The G20 is unashamedly a club of capitalists, even when its most populous member and second biggest economy, China, is still nominally a communist economy. In its decade in the capitalist inner sanctum, China has proven just as orthodox a capitalist as any of the other members, including the standard bearer of free enterprise, the US.
In 2009 at the G20 in Pittsburgh, China joined with the US to bail out the world with an expansionist program after the global financial crisis had led it to the brink, declaring itself a committed member of the club.
How different the atmosphere is in Buenos Aires. The global economic system seems to be on the point of fracture again, but this time there seems little chance of a US-China double act coming to the rescue.
The Costa Salguero Center on the edge of the Rio de la Plata will be the venue for the first meeting between US President Donald Trump and Chinese President Xi Jinping since, earlier this year, the former fired the opening shots in the “trade war” going on between them by declaring his intention to impose $250 billion of tariffs on Chinese imports.
China retaliated with its own tariffs, and there is a danger that the confrontation — which some American officials describe as merely a “skirmish” — will descend into a full-scale battle next year, when the tariffs take effect.
That would have serious consequences for a global economy that is looking increasingly fragile amid concerns that the financial system, too, is laboring under a weight of increased debt and overinflated asset prices.
China recently held out an olive branch, with deputy president Wang Qishan declaring his readiness to enter serious negotiations to avoid a breakdown in the global trade system. The hope is that Trump will hold off formally applying the tariffs in January.
But in Buenos Aires, nobody is expecting too much from the dinner that the two presidents have arranged on Friday night.
By then, the first full day of the summit will have been completed, and President Mauricio Macri of Argentina will be hoping that it has gone off without the major incidents that have been threatened by home-grown and international agitators.
If there was a repeat of the serious football-related violence that broke out in Buenos Aires recently, it would take the shine off his attempts to claim that Argentina had turned a corner in its economic troubles, in the run-up to presidential elections next year.
Macri was elected three years ago in a burst of optimism that his reformist policies would put the Argentine economy on the road to stability after years of boom-and-bust cycles, interspersed corruption scandals, and domestic unrest.
For a while it seemed to be working, and winning the G20 was seen as a mark of approval by the international community for his presidency.
But recently the old Argentine malaise has come back with a vengeance. The peso has lost 50 percent of its value against the dollar this year, Argentine financial markets have been chaotic, and inflation has soared to more than 30 percent per annum. Some Argentinians complain they cannot afford steak.
Macri has stabilized the situation in recent weeks, with the IMF giving its blessing in a series of measures to stabilize the economy and the financial system.
But Argentine citizens are still having to live with an austerity program that threatens their standard of living, and it would not take much for ordinary citizens — the ones who have not taken Macri’s advice to have a long weekend away from Buenos Aires — to join protests that could easily descend into violent confrontation as the G20 leaders meet.
That would be an embarrassment for Macri in front of his fellow leaders, and would also distract from the rest of the very worthy G20 program.
While the media is salivating for a Trump-Xi confrontation on trade, more fireworks on climate change and street protest, the compilers of the G20 program have actually put together a formal agenda that reflects some of the other genuine concerns of the international community.
The theme of the Buenos Aires G20 — as it is the case increasingly with international forums from Davos to Singapore — is sustainability. The world has to live within it means, both in terms of energy, environment, society and finance.
The Argentine G20’s self-declared goals are to focus solutions on the future of work, infrastructure for development, viable food production and consumption, and the inclusion of more women in the global workforce, all against the backdrop of the rapid technological change turning most aspects of the economic process on its head.
That coincides with many of the goals of Saudi Arabia’s Vision 2030, which Saudi policymakers — led by Crown Prince Mohammed bin Salman — will be at pains to stress is still on track in Buenos Aires. The event gives the opportunity to reassert the project’s credentials on the international stage after a period of uncertainty in crucial global energy markets and changes in the international perception of the Kingdom.
Some aspects of the Vision 2030 program — like the initial public offering of Saudi Aramco originally slated for next year — have been modified in line with changing circumstances, and lower oil prices threaten to alter the fiscal mathematics for the Kingdom’s economic policymakers.
As the biggest economy in the Middle East, a leading oil producer and a long-standing member of the G20, Saudi Arabia will retain its role and its influence in Buenos Aires. The top-level delegation will be working hard behind the scenes, at the bilateral and “retreat” events at the summit center, to argue its case among its global peers.
It all promises to be an instructive lesson in the stagecraft, and statecraft, that goes into hosting a G20 summit, which, after a move to Japan next year, is planned to be held in Saudi Arabia in 2020, its first time in the Middle East.

Filipino rebel chiefs become officials under peace deal

President Rodrigo Duterte, political leaders and officials flash the peace sign following Friday’s oath-taking ceremony in Manila. (AP)
Updated 22 February 2019

Filipino rebel chiefs become officials under peace deal

  • It is a very difficult and challenging process, says MILF spokesman

MANILA: Some of the fiercest Muslim rebel commanders in the southern Philippines were sworn in Friday as administrators of a new Muslim autonomous region in a delicate milestone to settle one of Asia’s longest-raging rebellions.

President Rodrigo Duterte led a ceremony to name Moro Islamic Liberation Front (MILF) leader Murad Ebrahim and some of his top commanders as among 80 administrators of a transition government for the five-province region called Bangsamoro.

About 12,000 combatants with thousands of firearms are to be demobilized starting this year under the peace deal.  Thousands of other guerrillas would disarm if agreements under the deal would be followed, including providing the insurgents with livelihood to help them return to normal life.

“We would like to see an end of the violence,” Duterte said. 

“After all, we go to war and shoot each other counting our victories not by the progress or development of the place but by the dead bodies that were strewn around during the violent years.”

About 150,000 people have died in the conflict over several decades and stunted development in the resource-rich region. 

Duterte promised adequate resources, a daunting problem in the past.

The Philippine and Western governments and the guerrillas see an effective Muslim autonomy as an antidote to nearly half a century of secessionist violence, which Daesh could exploit to gain a foothold.

“The dream that we have fought for is now happening and there’s no more reason for us to carry our guns and continue the war,” rebel forces spokesman Von Al-Haq said in an interview ahead of the ceremony.

Several commanders long wanted for deadly attacks were given safety passes to be able to travel to Manila and join the ceremony, including Abdullah Macapaar, who uses the nom de guerre Commander Bravo, Al-Haq said. 

Known for his fiery rhetoric while wearing his camouflage uniform and brandishing his assault rifle and grenades, Macapaar will be one of the 41 regional administrators from the rebel front.

Duterte will pick his representatives to fill the rest of the Bangsamoro Transition Authority, which will also act as a regional Parliament with Murad as the chief minister until regular officials are elected in 2022.

Members of the Moro National Liberation Front, which signed a 1996 autonomy deal that has largely been seen as a failure, will also be given seats in the autonomous government.

Disgruntled fighters of the Moro National Liberation Front broke off and formed new armed groups, including the notorious Abu Sayyaf, which turned to terrorism and banditry after losing its commanders early in battle. 

The Abu Sayyaf has been blacklisted by the US as a terrorist organization and has been suspected of staging a suspected Jan. 27 suicide bombing that killed 23 mostly churchgoers in a Roman Catholic cathedral on southern Jolo island.

“We have already seen the pitfalls,” Al-Haq said, acknowledging that the violence would not stop overnight because of the presence of the Abu Sayyaf and other armed groups, some linked to Daesh. 

“It’s a very difficult and challenging process.”