CIGI Commentaries, May, 2010
The US still thinks of itself as a leader in summits and in the world. But the US is now a number one among many, a leader among other leaders, a country seeking common ground rather than only the higher ground for it to stand on. The Obama administration seems committed to what we might call "embedded multilateralism," where US leadership is embedded in the varied mechanisms, formal institutions, "Gs," and other informal arrangements in which the US works with others.
Fallout from the global financial crisis gave a sense of focus to the G20. As the global financial crisis fades, so does the sense of urgency about tackling the shortfalls in global governance that were highlighted by the crisis. Close observers warn that the opportunity provided by the crisis to push through the needed measures to stabilize the global financial system, to reform the global architecture, and address global imbalances is dissipating. The G20 leaders’ process is at an important crossroad in its development. A measure of self-restraint is key to ensuring the continuing success of this innovation in global summitry.
The G20 has a limited window of time to demonstrate that it is representative and effective in ways that the G8 and the UN are not. The G20’s current membership reflects countries “that mattered” to resolve a financial crisis over a decade ago; fully one-third of the world’s population is currently unrepresented in a forum hailed as the shape of things to come. For small developing countries, the goal must be to ensure that their concerns are addressed in whatever configuration of the G20 emerges in coming years. A sound analytical basis for negotiations coupled with a model for giving voice that emerges willingly is going to be superior to one where representation is mechanical and mandated.
The G20 was born out of the global financial crisis and thus the bulk of its agenda has been focused on financial reform. The early stages of the financial crisis in late 2007 and early 2008 coincided with sharp rises in food prices. At Pittsburgh last September the G20 summit leaders recognized the gravity of this situation and promised to invest in the promotion of food security. But the G20 could do much more to combat hunger by linking its food security initiative more tightly with its broader economic agenda.
When Good Intentions are Not Enough: Lessons of Past Cooperation Attempts for the G20 Stability Framework
At the Pittsburgh Summit, the G20 announced a new “Framework for Strong, Sustainable and Balanced Growth.” Within this Framework, leaders pledged to pursue responsible fiscal policies, prevent destabilizing credit and asset price cycles, promote more balanced external accounts, undertake structural reform to increase their potential growth rates and, where needed, improve social safety nets. But cooperation is easier said than done. The Pittsburgh summit may be remembered as the high water mark of G20 cooperation on global imbalances, unless officials draw lessons from past attempts at international economic reform.