Why does Asia assent to the US Federal Reserve as the de facto ‘world financial authority’ and the US Treasury Secretary as the de facto head of the International Monetary Fund? Why does Asia seem resigned to bear disproportionate costs in bailing out OECD countries’ financial institutions? Why does Asia tolerate OECD agricultural subsidies of hundreds of billions of dollars and resign itself to accepting the World Trade Organization’s intellectual property regime? And why does Asia accept the implicit insult of the continued existence of the G8?

More generally, why does Asian reticence prevail, given the recent financial regulatory disaster, the ongoing lack of economic growth, the futility of climate change and trade negotiation deadlocks, the perils of nuclear proliferation, and the clear evidence of stalled development demonstrated by the failure of the Millennium Development Goals? Western models and existing institutions have obviously failed across the board. A martian would conclude that on Earth, the borrowers run the international financial institutions, the polluters manage the environment and the inmates run the asylums.

A key opportunity has arisen for Asia to redress the balance in global decision-making processes. In November South Korea will be the first Asian host of a G20 Summit. After a disappointing Toronto meeting, which neither moved the substantive G20 agenda forward nor contributed to the evolution of the G20 institutionally, the Seoul Summit is positioned to do both.

Asia’s weight within the G20 is significant, consisting of six major countries—China, Japan, India, Indonesia, South Korea and Australia combined with natural allies such as Brazil, Argentina, Mexico, South Africa and Turkey, Asian G20 countries should be in a position to drive the G20 process. We remain puzzled that the leading states in the region have not stepped forward to lead the effort to make the expanded G20 a more effective body which finally moves the international centre of gravity away from the traditional ‘western’ powers. If ever there was a time for the emerging economies to shed the legacies of colonialism and the Cold War, this is it. Can Asia and its allies devise a credible and practical set of goals and strategies to re-imagine the structure of international relations?

Realistically, the US will remain a major actor for the foreseeable future. A key element in this strategic thrust is the China-United States axis which sits at the centre of the reoriented global configuration. Asia must build off the power of this dyad to achieve its objectives. Impetus from China is particularly important at a time when the US political system seems likely to remain in deadlock at least until the 2012 presidential elections. A Chinese role as energiser and conceptual pioneer would be extremely useful.

Despite diversity, one issue where we may reasonably expect a coherent Asian strategy is with respect to Europe. The fulfilment of the G20’s promise requires both Europe to give ground and Asia to lead. An obvious target of opportunity is the over-representation of European countries in the G20 (and by extension throughout the international system). Europe is essentially a disunited paper tiger in terms of meaningful global power, incapable of effectively mobilising its economic and military potential. Europe is the weak sister in terms of the G20 commitments to multilateral co-operation. The EU maintains significant effective trade protection in the form of subsidies, bailouts, ‘buy national’ injunctions and restrictions on foreign direct investment. The EU has done nothing in practical terms to promote achievement of the Doha Round or free up investment flows.

Europe has used the G20 as an expedient means of tapping into emergency funds pertinent to the EU’s own interests, rather than as a step towards broader and more balanced multilateral cooperation. The largest share of the bailout funds agreed by the G20 has been directed to states in Europe.

The profligate US is another villain—incapable of regulating its own financial sector, running two wars without taxation, and over-consuming and dissaving on the backs of Asia. How long will Asia continue to send thousands of containers of goods to the West in exchange for depreciating paper? Why not insist on turning the Special Drawing Right into an alternative reserve currency, allowing a gradual withdrawal from the addiction to the US dollar?

Influencing G20 outcomes requires aggressive pursuit of the moral high ground when it comes to shaping the work programs and operating procedures of key international bodies such as the IMF. With political gridlock in the US (a country manifestly incapable of even ratifying treaties) and feebleness in Europe, Asia and its allies need to move into the policy vacuum and use the G20 to institutionalise broader and more inclusive approaches to global decision-making.

Growth can no longer be generated from the West on the back of emerging economy surpluses, but will need to come from within the emerging world itself. Asian countries must devise the means to move away from a reliance on export-oriented economic policies. The IMF has done little to soften the impact of the crisis in developing countries and still lacks legitimacy, yet is being mandated with powerful new surveillance functions by the G20. Under these new rules, will the EU and the US subject themselves to the same degree of oversight that the IMF has long visited upon developing countries? Based on historical experience, this seems very unlikely.

Asia, which now holds the strong cards, must caucus to promote initiatives such as: the final burial of the G8, with its questionable practice of inviting developing countries as second-class citizens; establishing a formal G20 secretariat located in Beijing; establishing a formal Asian Global fund, open to South Americans and Africans as well; and, setting up an Asian regional trade organisation—to press the OECD countries to reduce the billions in agricultural subsidies.

With the Seoul Summit, if this is to turn out to be the Asian century after all, the legitimate concerns and aspirations of the Asian region must be brought to bear on the proceedings of the G20. It is time for Asian countries to step forward and promote their national and regional interests. The world as a whole would be better off for it.

Barry Carin is Senior Fellow, Centre for International Governance Innovation and Peter Heap is a Senior Research Associate at Centre for Global Studies at the University of Victoria, British Columbia.

This article is from the most recent edition of the East Asia Forum Quarterly, ‘Asia and the G20’.