In Montreal this month, French Foreign Minister Bernard Kouchner was asked whether the Group of Eight older powers still have a role in a world that was saved from economic catastrophe by the larger and more inclusive Group of 20.
Mr. Kouchner struggled with his response. “Yes, we still need it,” he said. But then, with barely any hesitation, he went on to disparage the G8 as a “circus,” admitting that ministers sometimes wondered why they went to its meetings.
The French minister’s schizophrenic reaction illustrates one of the realities of global governance in the aftermath of the financial crisis. While the G8 is clearly fading, it’s still uncertain that the G20 will prove effective enough to replace it as the world’s most influential club of leading economies.
Despite its success in reversing a global recession, the G20, which includes established financial heavyweights such as the United States and Germany and emerging economic forces such as China and Brazil, must show it can function as something more than a volunteer fire brigade.
There are questions about whether the G20 is too big to get anything done without a global crisis to focus the minds of its leaders. In May, in the midst of market upheaval over Greece’s debt, Finance Minister Jim Flaherty tried to get every member together to issue a statement on the debt crisis. He couldn’t. “There is some maturing to be done there,” he said afterward.
Yet others argue that a group that has only one permanent representative from Africa isn’t big enough to deflect the charges of illegitimacy that plagued the G8. The G20 also must figure out whether to expand its mandate beyond economic matters – a decision that will either cement the group’s role at the most important body for global governance or lead to its undoing, depending on whom you ask.
“It’s at a transition point,” David Shorr, who studies international affairs at the Muscatine, Iowa-based Stanley Foundation, said of the G20. “You do need a bigger group than the G8,” he said, but “these high-level gatherings do have to justify their existence by making good use of the attention and the political star power.”
In Montreal, Mr. Kouchner eventually decided that the G8 “has had its time” and will “slowly disappear” in favour of a better-organized G20. This is the house view. Those who are either in the club or are regularly invited to meetings say the G20 is here to stay.
“This is as good as it can get if you combine the question of legitimacy with the question of whether it is manageable,” said Angel Gurria, secretary-general of the Organization for Economic Co-operation and Development, who was Mexico’s finance minister when the G20 was formed as a body for finance chiefs in 1999. “It is working so far.”
Working, but with training wheels. Prime Minister Stephen Harper limited the agenda at this weekend’s summit in Toronto to the economic issues, reasoning that to try to do more could cause a group this young – the G20 has met only three times at the leaders’ level – to fall flat on its face. Alan Alexandroff, a senior fellow at the Waterloo, Ont.-based Centre for International Governance Innovation, says that decision could prove a fatal mistake, arguing that Mr. Harper has missed a chance to cement the G20’s place in the global order by seizing on the moment of the successful fight against the recession.
Mr. Gurria asks for patience. In time, the G20 will move from its emergency stance to take up “structural” issues such as climate change, education and health, Mr. Gurria said.
In fact, South Korea’s government, which is the official chair of the G20 this year, already has said it will add development to the work plan for a meeting in November in Seoul. World Bank president Robert Zoellick told a dinner audience in New York last week that he sees the G20’s effectiveness coming through “informal interaction,” with smaller groups of leaders coming up with policies for ratification by the larger body.
The bigger risk to the G20 is failure to establish legitimacy. Even as an economic working group, the group’s composition is flawed. Few, if any, accept that South Africa, the only permanent African member, is an adequate representative for the entire continent. If Australia deserves a place, why not Thailand? Switzerland, a banking power and non-European Union country, is excluded. So are all the Caribbean nations, leaving the region’s interests in the hands of Brazil, Argentina and Mexico.
Failure to address these concerns threatens the G20’s ability to achieve what is perhaps its biggest goal: ridding the financial system of hidden land mines. While the G20 membership covers the major economies, there remain a lot of places to hide outside its sphere of influence.
“We now need to create an alignment between the nature of the market and the nature of the regulatory framework, which must be enforced everywhere globally,” Nkosana Moyo, chief operating officer of the African Development Bank, said in an interview. “The more people you have at the table, the more who are going to be participants in that.”
The G20’s response to the legitimacy question has been to extend invitations to other countries to attend as observers. Mr. Shorr argues that this method actually offers a way forward, by allowing a core group of powers to assemble the right number of countries to address a particular issue.
A better answer, Mr. Moyo said, would be to try harder to get the representation right. “The obvious question is why G20?” he said. “Why not 25?”