Over the last year, the G20 process has rallied a collective response to the global economic crisis, with focused attention on the failures in regulation of the private sector. The G20 has cut through the traditional boundaries of the North-South divide, mobilized both national and international fiscal stimulus packages and served as a catalyst for a new regulatory regime.
While these achievements deserve kudos, much work remains to be done. At the Pittsburgh Summit, the G20 was institutionalized as a hub of international economic cooperation. Yet, if ambition is to meet function, the G20 must be forward looking. It must be more than a crisis committee. It must do more than correct private wrongs. It must support global public goods.
Upcoming Global Policy Challenges
As the immediacy of the crisis subsides, a much longer list of tasks and responsibilities has begun to emerge. While deeply important, the remedies undertaken to address private greed in global commerce — through better regulation and institutional reform — have not provided succour for the poor in the countries affected by the crisis. The G20 has entered a new phase in its institutional development, moving beyond crisis management towards robust governance. Lessons can be taken from the G8 experience of growing inefficiency and fading legitimacy. If the expanded membership of the G20 is to reflect the new global order, it must also employ a diverse policy tool kit to address the new global challenges.
At the top of these ensuing priorities — more by default than design — is climate change. The pessimistic consensus among experts and officials is that the Copenhagen meetings in December will not deliver an effective resolution, and thereby perpetuate the divide between industrialized and developing countries. While negotiations will continue through the UNFCCC process, climate diplomacy will likely be “forum-shopped” to the G20 – in tandem with its cousin the Major Economies Forum on climate and energy – in order to break the stalemate.
Next, arguably, is the issue of global food security. Recent price fluctuations in commodities and agricultural supplies have negatively impacted the world’s poorest. In 2008, both the G8 and the United Nations targeted this issue, but have suffered, respectively, from deficiencies of restricted membership and organizational fragmentation. Bridging the North and South, the G20 offers a credible forum to address the vacuum of leadership on food security. Action at the leaders’ level creates the opportunity for synergies in alternative energy policy and agricultural management, limiting the unintended consequences of the traditional “siloed” approach.
Also high on the list, and often neglected, is global health. While still embedded in the sovereign system of states, health challenges cross borders indiscriminately — one of the classic “problems without passports,” as labelled by former UN Secretary-General Kofi Annan. Pandemics such as H1N1 serve as a reminder of our collective vulnerabilities and the need for international coordination. While the World Health Organization provides frontline services, it has become dwarfed in terms of funds and programs by private institutions like the Gates Foundation. The G20 can provide catalytic leadership in global health governance, mobilizing efforts across agencies and sectors.
Developing Innovative Solutions
Public goods deserve a global champion. However, at present, no one institution appears able to match the intensity and complexity of the challenges posed by climate, food and health crises. The G20, however, has at its disposal a variety of policy instruments and, more importantly, the political momentum to implement widespread reforms. Its informal structure and near-limitless purview provides many comparative advantages over the traditional international institutions. The window of support to tackle a wider set of global problems, however, may be short-lived amid temptations to revert to normalcy.
Timely and innovative policy solutions, which signal a break from business-as-usual approaches to international development, are thus imperative. Incrementally, the G20 appears to be gravitating towards a wider set of issues and policy options. At the recent finance ministers and central bank governors meeting at St. Andrews, Scotland, support was given for replenishment of international development assistance, termination of fossil fuel subsidies and exploration of climate financing options. The communiqué advanced the coordination of all “financing channels” to tackle climate change, emphasizing public-private partnerships.
In areas of mutual interest and competencies, partnerships among governments, corporations and philanthropic foundations can yield results not possible when each acts alone. Initiatives such as the Global Alliance for Vaccines and Immunisation have shown that public donors can leverage significant private investment, and that cross-sector cooperation can work to fulfil foreign policy objectives. Structured partnerships also produce mutual accountability and hold the promise of efficient delivery on commitments.
Sustaining the G20’s Momentum
The G20 Summit has morphed unexpectedly but decisively from the ad hoc leaders’ summit at Washington, to an effective policy instrument at London, to its elevation to the pivotal role in global economic governance at Pittsburgh. A constant feature throughout has been its penchant for creative approaches — something that should be encouraged.
Moving forward into 2010, the next leaders’ summits — Canada in June and South Korea in November — will face intense pressure to both resolve the core economic concerns and clarify the G20’s role in the post-crisis era. Passing this diplomatic “stress test” is vital. The G20 must go on the offensive and show that it has the functional capability to deal with these pressing global issues. Moreover by targeting this key set of global public goods — climate change, food security and global health — the G20 can deepen the nature of its policy networks beyond the ambit of states. As the global economy reorients itself, the G20 is in a strong position to develop innovative forms of financing and encourage transfers of knowledge, wealth and technology.
Through its dual existence, first as a committee of ministers and then as a leaders’ summit, the G20 has shown itself to be capable of robust action. Rather than sticking to a set formula, when the global financial tsunami hit, the G20 capably re-invented itself. The challenge that lies ahead is to not let its successful steps, from crisis committee to permanent forum, temper its ability to promote original solutions. Effective mechanisms of global economic governance, led by the G20, need to tackle and avert the extended crises of climate, food and health.