Shift to G20 was matter of time

THE Pittsburgh summit is a landmark event where US President Barack Obama conceded the relative shifts in global power against the US and the need for a new strategy of pragmatic multilateralism after the failure of Bush-era unilateralism.

The US has scuttled the rich man's G8 club. This reform, powerful in its political symbolism, was overdue. It will become a lasting legacy of the global financial crisis. China's tolerance had reached its limit. Beijing pushed for the G20 to replace the detested G8. Insulting China by relegating it to secondary status in the corridors of the G8 was no longer a tenable position.

The fact that developing nations now constitute more than 50 per cent of global GDP was a further irresistible claim for reform. Suspicions held by Europe and Japan against the radical shift to the G20 were unable to stem the tide.

Kevin Rudd worked relentlessly for this outcome for most of the past year. He benefited from several factors: China's demand for change, the developing nation claims and Obama's new strategy of pragmatic power sharing.

The US remains number one but it needs the help of others to achieve its goals. Witness the global crisis where China is America's banker and redefining the US-China financial imbalance is pivotal to a new stability.

It is as ludicrous to say Rudd had no influence as it is to pretend this outcome was all Australia's achievement. But creation of the G20 as the permanent and prime body for economic co-operation is, as the Prime Minister said, an historic occasion for Australia.

In both his public and private remarks after the summit, Rudd was careful to avoid any hint of hubris given the scale of Australia's diplomatic victory.

The sceptics are right to warn of the risks: that the G20 will be too big, too divided and unable to deliver genuine outcomes by consensus. It is easy to fantasise that the best result was to keep a small body by throwing a couple of Europeans out of the G8 and elevating China and India. But global politics meant this was never a feasible option.

Rudd and Wayne Swan warn the test for the G20 will be in its delivery - getting right the exit from the stimulus packages and making a reality of the new framework for global growth endorsed in the Pittsburgh communique. The G20 will become the new prestige club of global politics. Its current members are likely to lock out others banging on the door. For the first time, in Rudd's words, Australia has a seat at the "top table".

This has been achieved because of two factors: Australia's superior economic performance over the past 15 years and its constructive economic diplomacy under both the Howard and Rudd governments.