CAN THIS FORUM OUTLAST THE CRISES THAT PRODUCED IT?

The G20 leaders met again in Seoul on November 11th and 12th, 2010, only five months after the Toronto summit.  Whatever they hoped to discuss, they faced one key question: How, exactly, are the G20 supposed to work together to tackle the global economy when they approach it from such different perspectives?

Their answer to that question — at the first G20 meeting outside Europe or North America — will shape the dynamics of global leadership for years to come.  Clearly, the old G8 is no longer broad enough to set the agenda for a world increasingly influenced by the new large emerging powers, like India, China and Brazil.  But only five meetings into the G20 experiment, it’s not clear that this new forum — which includes those large emerging economies — is ready to tackle the global economic challenges.

CURSED BY SUCCESS

Essentially, the G20 must decide whether it’s good for anything other than a crisis. The group first emerged as a finance ministers’ forum to address the Asian financial crisis in the late 1990s. It became a leaders’ forum a decade later during the global financial crisis. President Bush invited G20 heads of government to meet in Washington in November 2008, when the global economy appeared to be “headed over the cliff”. The G7/8, Bush and other leaders agreed, wasn’t broad enough to solve a crisis that involved large emerging market economies – Brazil, India, China, especially.

And that first G20 summit did well. Global financial markets calmed palpably when G20 leaders agreed to launch national stimulus programs more or less in sync.

But by the time leaders from those same countries met again in Toronto in June 2010, along with a growing number of non-member states on the sidelines, the economic crisis had dulled into drawn-out recession in the advanced economies and a return to rapid growth among the rising economic powers. Without a crisis, the G-20’s ability to hone a collective course seemed a bit murkier.

Instead, the G7/8 seemed to be setting the agenda again – this time from a wilderness resort north of Toronto where they were already meeting alone while other G20 leaders touched down in Canada. The world watched while the Eight agreed on rough deficit and debt targets, and then got stuck in a schism between the US and Japan, which wanted to maintain stimulus programs, and other G7/8 members urging fiscal consolidation even austerity — led by Germany and the UK. Agreeing to disagree, those eight leaders flew by helicopter to join the rest of the G20 in Toronto, and the larger summit then seemed to largely lose its way.

NEW SKEPTICISM AND A BIG MOMENT FOR SEOUL

Heading into Korea, this self-declared “premier forum for international economic cooperation” faces growing skepticism. Will the G20 summit become the leading forum of global governance? Is the G20 viable over the long term?  Will US leadership accommodate the enlarged leadership?  And will the large emerging market economies, especially China, be willing to share global leadership — around economics first, and ultimately general global governance?

It may be telling that these questions will frame the first G20 meeting since 2007 held outside a G8 country. At the very least, the second week of November will be a vital moment on South Korea’s own path to global influence.

President Lee Myung-bak and his government are “pulling out all the stops” to organize a constructive meeting.  He’s established a Presidential committee to coordinate different parts of the Korean government around the summit.  Various ministerial and sub-ministerial meetings are in the offing too.

 

RELATED MATERIAL FOR THE WEEK OF SEPTEMBER 13

The Group of 8, or G8,  originated in 1975 as the Group of 6 industrialized states, consisting of the United States, France, Germany, the United Kingdom, Italy, and Japan. The G6 provided a forum for  major industrialized countries to discuss global economic issues and to coordinate policies in the wake of the 1973 oil crisis. In 1976, Canada was invited to join the group, and in 1997 Russia followed suit, creating the G8 as it is known today.

The Group of 20, or G20, has a more recent history. The first meeting of the G20 took place in Berlin in 1999, after the 1998 East Asian financial crisis. At the meeting, the finance ministers of 19 major economies discussed the potential for greater cooperation in global economics and finance. G20 leaders first came together in 2008 in Washington, D.C., after U.S. President George W. Bush called for a global meeting to respond to the widening global financial crisis. Since that first meeting, G20 leaders have met three more times – London April, 2009, Pittsburgh September 2009 and Toronto June 2010. At Pittsburgh the G20 leaders declared the G20 as permanent and the “premier forum for our international economic development.”

The June 2010 G8 with Canada holding the presidency and the G20 summit, hosted by Canada and South Korea in Toronto, served in part as experiments to determine whether the Gx process could survive dramatic changes in the global arena. The G20 faced doubts as to whether it could shift its mandate from that of a “crisis committee” to that of a permanent “steering committee,” as the demands on the institution became more complex and longer term in focus. Meanwhile, the more established G8 aimed to maintain its relevance and legitimacy with a focus on peace and security and development in the face of emerging states’ demands that their voices be represented more directly in global talks. These challenges will remain in place for the November 2010 G20 Summit in Seoul, Korea, as well the 2011 G8 summit in Nice France in the spring and followed by the G20 in the fall in France as well.

The sites listed below explore the broader challenges facing the Gx architecture as well as the raft of global governance challenges. Toronto University’s Munk School of Global Affairs’ own G8  and G20 Research Groups have compiled and published extensive analysis on the Gx process.  The G8 Research Group  also publishes annual reports on G8 compliance and has begun efforts to develop a compliance report for the G20. Both groups have undertaken comprehensive research and analysis at G8 and G20 summits.

The East-West Centre’s most recent East-West Dialogue publication features a broad analysis of prospects for the 2010 G20 Summit in Seoul; contributors to the publication include Il Sakong, the Chairman of the Presidential Committee for the G20 Seoul Summit and Amar Bhattacharya, Chair of the G24 Secretariat.

The East Asia Forum, run out of the Australia National University’s College of Asia and the Pacific has compiled information and articles on the G20 from an Asian perspective in its G20 Asia Forum.

At the issue-area level, Gary Hufbauer and Robert Lawrence at Foreign Affairs question the G20’s latest effort to distance itself from the WTO Doha Round of trade talks.

The Basel Committee on Banking Supervision, the Financial Stability Board, and the International Monetary Fund have  contributed research and policy options to members of the G8 and G20 summits.

Finally, the South Korean Presidency have created an official Twitter page for the November 2010 G20 Summit