The meeting of the G20 finance officials in India last week is an ominous reminder that this potentially useful venue of international economic policy coordination is torn apart by irreconcilable ideological and systemic differences of major world powers.

Disagreements ran so deeply that, once again, no customary joint communiqué could be issued. The Indian government just published its own Finance Ministry's “G20 Chair's Summary and Outcome Document of February 25, 2023.”

The question is: Why was it necessary to discuss security issues at a forum created to coordinate international economic policies?

The argument that the intractable military operations in a hopelessly divided and permanently feuding Europe is disrupting trade is nothing new.

It is, therefore, clear that, under those circumstances, an economic policy coordination is impossible, and that an expensive jamboree to discuss non-starters is a flagrant waste of taxpayers’ money. It is also a regrettable misuse of funds that could have been directed to so many deprived constituencies around the world.

Washington is not leading policy coordination

A similarly costly and an even more unproductive G20 foreign ministers meeting is scheduled for March 1-2, 2023, in New Delhi.

Here is an example that foreshadows such a result.

China’s “Position on the Political Settlement of the Ukraine Crisis” has been pronounced DOA (dead on arrival) in Washington, with President Biden quipping "(Russian President Vladimir) Putin's applauding it, so how could it be any good?"

That’s also a clear message to Europeans who are getting ready for their summits in Beijing in a vain hope of driving a wedge between Russia and China.

Indeed, Biden has set the stage for the foreign ministers meeting in Delhi. So, why bother. There is nothing to discuss. The largest military alliance in history wants to defeat Russia, a country that can respond with its huge and sophisticated nuclear arsenal.

Acknowledging Biden’s message, the Japanese, apparently, want to skip the Delhi meeting because all cabinet members have to attend the parliamentary budget deliberations.

All that is a sad story because the G20 was an economic policy forum the world really needed – a unique place where a developing world could directly interact with industrial economies to coordinate the global business cycle.

Directing security issues to a proper forum – such as the United Nations Security Council -- the G20 could have turned to (a) macroeconomic policies, (b) relieving world hunger with adequate food and fertilizer supplies, and (c) acting on debt problems in low and middle-income countries.

The U.S. and the E.U. should make sure that correcting their economic policy mistakes does not throw the world into a major and protracted cyclical downturn that would exacerbate hunger, poverty and debt problems in the hard-pressed developing countries.

Peace, food security and debt management

If that sounds like a mission impossible – it is. Exactly 88.8% of U.S. aggregate demand (private consumption plus business and residential investments) is set back by a 6.4% decline of real personal disposable incomes, an actual unemployment rate of 9.1% (instead of officially reported 3.4%), sharply rising credit costs and soaring imports that are putting pressure on America’s struggling import competing industries.

To coordinate economic policies, the U.S. G20 delegation should have raised the issue of Chinese, European and Japanese trade surpluses that cost $1.3 trillion the American economy during last year (that’s the difference between America’s domestic demand and the country’s GDP). Those surplus countries should stimulate their economies, keep markets open and buy more American products and services.

That would have been a real policy coordination to balance out the world economy.

And to provide food and fertilizers to developing countries, the G20 should have addressed the U.N. and Türkiye complaint that the Black Sea Grain Initiative – an agreement signed in July 2022 -- is not respected. According to that complaint, the logistics of Russian grain and fertilizer exports are blocked – with no insurance and no payments.

Instead of doing that, the Paragraph 6 of the Indian document just talks at length about “mapping exercise on food security” – an international bureaucratic process to no end.

A similar story emerges from Paragraph 9, where the Indian ministry notes "the emergency to address debt vulnerabilities in low and middle-income countries,” expressly mentioning Zambia, Ethiopia, Ghana and Sri Lanka.

China is the elephant in that room. Those countries owe an estimated $40 billion to Chinese creditors, and the word “emergency” means that China should write that down by swiftly taking a big haircut. The West’s “strategic and systemic competition with China (and Russia)” also means that developing countries should wake up to the China “debt trap.”

That’s what the G20 has become – a forum for bitter bloc confrontations, and one more example of a huge waste of public resources.

The solution here is: Scrap the G20 and leave the economic and trade policy coordination to U.N. agencies like the IMF and UNCTAD.