Forbes magazine has published its annual list of the “World’s Most Powerful People.” At the top of the supposed premier league is US President Barack Obama, a man so powerful that he can get almost nothing past an obstructive US Congress that will not work with him to address the US’ huge problems, never mind those of the rest of world.
At No. 2, Forbes places Russian Prime Minister Vladimir Putin, which strikes me as plain wrong. True, he has so arranged things that he is not much troubled by domestic opposition, but Russia has long since surrendered to China its status as the US’ principal global rival and its economic strength, such as it is, depends riskily on the price of commodities.
At No. 3 is Chinese President Hu Jintao (胡錦濤). That sounds more like it, because just about everyone buys into the Rise of the East thesis. However, the leader of the nervous autocrats in Beijing may not feel quite so powerful as he looks to crisis-stricken Americans and Europeans.
At No. 4 is German Chancellor Angela Merkel. Her nation’s size and fundamental economic strengths certainly ought to make Merkel the pre-eminent leader in Europe. Yet the German chancellor is proving unequal to the struggle to salvage the European project to which her country has devoted itself for the past 60 years.
Only one Briton makes the Forbes list — British Prime Minister David Cameron just scrapes into the top 10. He is ranked less big than two Bens, Pope Benedict XVI and US Federal Reserve Chairman Ben Bernanke, but above Indian National Congress President Sonia Gandhi and French President Nicolas Sarkozy. This is not the most patriotic observation I have ever made, but 10th-most powerful person in the world is probably over-generous to the prime minister of the UK .
He presides over an anemic economy. His deficit-reduction strategy and the political fortunes that are tied to it are threatened with destruction by international forces way beyond his control. The military clout at his disposal is so emasculated that, during the recent conflict in Libya, the Royal Navy could not muster one spare warship to patrol the coastline of Britain. His country may literally shrink in the foreseeable future if the Nationalists take Scotland out of the UK. On top of which, Cameron bestraddles a coalition that is beginning to display stress fractures, especially over how to respond to the crisis in the eurozone.
When Forbes first started to draw up its power league, the magazine probably imagined that it would induce readers to gasp with fear or gawp with respect. Yet the effect of publishing such a list at this time is to highlight how powerless any one individual leader, however nominally mighty, can be in the face of a global emergency. For months now, there has been a growing sense that leaders are anything but the masters of events and the captains of their country’s destinies. This was made the more stark by the annual G20 summit in a storm-tossed Cannes.
The French had laid on all the usual ceremonial trappings of power and pomp, something that they do rather well. There were the outsize flags, the broad acres of red carpet, the honor guards in Napoleonic-era uniforms, the bulletproof limos and the windy communiques long on aspiration and short of action. Never have the summit rituals looked so hollow, for the G20 utterly failed to yield a solution to the eurozone crisis. Nor did it progress the quest to address longer-term imbalances in the global economy. If anything, it has made the risk of an implosion even more severe by so dramatically advertising the incapacity of these leaders to rise to the scale of the challenges.
It was particularly terrible for Sarkozy. A gathering originally conceived — in his mind, at any rate — to save the world was taken hostage by the wild dramas in Greece: the on-off referendum, the on-off resignation of the prime minister, the on-off formation of a government of national unity. Greece is a puny power and was so even before it descended into the vortex. The Greek economy is just 2 percent of European GDP and an even tinier proportion of global GDP.
That one slight country could dominate a summit of the world’s mightiest was a reminder — if anyone needs reminding — of the interconnectedness of the world. An infection that starts somewhere small can quickly spread to places that are much bigger. It also ought to have been a reminder that individual governments cannot solve international problems. They have never before been so dependent on finding agreement and rarely before so hopeless at doing it.
There are specific reasons for the frailty of each of the players. Obama came to Cannes to urge the Europeans to get their act together, but the US president lacks the moral authority to bang heads together when his own country has a dreadful fiscal position and a poisonously dysfunctional politics. There is almost exactly a year to go before theUS decides between Obama and whomever the Republicans finally settle on as their candidate for the White House. This is historically a period during which presidents running for a second term are consumed by the domestic.
Sarkozy must face the verdict of the voters even sooner. His term expires in April. He looked done in at Cannes. It is probably not his new baby that is costing him sleep, but his abysmal approval ratings. We must surely be in the final act of the dark comedy called Italian Prime Minister Silvio Berlusconi. In this company, Merkel ought to be a colossus. Yet the German chancellor, who also faces a general election next year, is another scared leader. To the frustration of her peers, including the British contingent at the G20, Merkel has stubbornly opposed some of the steps that might help to resolve the euro crisis.
According to one of Cameron’s officials, “a lot of pressure was brought to bear on Merkel” to empower the European Central Bank (ECB) to take on the traditional role of a central bank in a crisis and become a lender of last resort.
To no avail. Merkel resists not because she is strong, but because she is vulnerable, a prisoner of Germany’s voters, constitution and history. The Germans are reluctant to sign up to even bigger financial commitments to the rest of Europe. They fear (and not that unreasonably) that this would give the debtor states less incentive to reform. Would you trust any promise made by Berlusconi?
Memories of the hyper-inflation of the Weimar Republic, and who and what that led to, have profoundly shaped Germany’s response to the idea that the ECB should be allowed to print its way out of this crisis. Merkel is further cramped by anxiety that German taxpayers will revolt against writing even larger checks to bail out reckless bankers and feckless Club Med nations. Can you blame a hard-working German taxpayer for being resistant to that? Who would enjoy handing over a lot of money when all the thanks you get is to be called a Nazi.
For some onlookers, the G20 was a snapshot that captured the shift in global economic clout from a declining West to an ascendant east and south. There was Sarkozy rattling a tin at the Chinese, Indian and Brazilian delegations, begging them to provide some cash for the European Financial Stability Facility, the crisis-fighting fund. A symbolic visual image was supplied: the French president waiting on his red carpet for a late-running Hu to turn up. Who then brushed off the plea for help. To look like a supplicant is unfortunate; to be a spurned one is humiliating. China does indeed have a bulging wallet thanks to its enormous reserves of foreign exchange. However, that does not make Hu quite as strong as he may look to Europeans. He heads a dictatorship that is frightened of the domestic strains within China and the threat of internal instability.
For all its economic strides, millions of Chinese continue to live in awful rural poverty. In absolute terms, China’s economy is on a trajectory to surpass that of the US and Europe, but it will be many decades later, if ever, that China is the equal of Americans or Europeans in terms of GDP per head. You can see why the Chinese (average income about US$5,000 a year) are reluctant to write a check to save the Greeks (US$28,000 a year) when the Germans (US$40,000) do not want to pony up anymore. We should probably be relieved anyway. Cash from Beijing would come with unwelcome — and perhaps unsavory — strings attached.
So the G20 proved that its leaders are strong in only one sense. Each is powerful enough to veto another’s idea of how to extricate themselves from the crisis. China said no to the French cry for help. Germany resisted everyone else’s pleas to empower the European Central Bank. The US was cool to Britain’s urgings to make the IMF the savior of the situation. The result is that we have lurched closer to the absolute catastrophe of a wave of sovereign defaults in the eurozone that would make the bank meltdown of 2008 seem mild by comparison.
If I were Forbes magazine, I would stop publishing league tables of global leadership until we see some evidence that it actually exists.
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