CIGI Commentaries, October, 2011
As leaders of the G20 nations prepare for their summit at Cannes, France on November 3-4, CIGI experts offer policy analysis and prescriptions on the most critical issues amid growing uncertainty about the global economy and the G20's effectiveness as an international policy forum.
Tuesday, 18 October 2011Series Introduction: New World, New Ideas?
Tuesday, 18 October 2011Global Imbalances: Beyond the “MAP” and G20 Stovepiping
The G20 is at a crossroads as the world economy once again stands on a precipice. At the beginning of the year, and before the dimensions of the current economic crisis came into sharp relief, President Sarkozy set out an ambitious economic agenda for the G20, overcrowded with new priorities and issues — reforming the international monetary system; strengthening financial regulation; combatting commodity price volatility; supporting employment and strengthening the social dimension of globalization; fighting corruption; and working on behalf of development and infrastructure.
With the world economy beset again by financial turmoil, the G20 leaders’ summit will return to its original raison d’etre — global crisis management. While this may be comforting, ironically, to the proponents of global macro-coordination, it should not be overlooked that the ongoing G20 discussions to put the world economy onto sustainable, and balanced growth had already entered a state of semi-paralysis before the current financial plunge.
As a global leadership forum, G20 summits provide an opportunity to transform international interactions into new patterns of negotiation and new forms of behaviour, resulting in new global breakthroughs. So far, leadership within the G20 forum has, however, been tentative, minimalist and too often narrowly circumscribed by the primacy of member governments’ domestic concerns and constraints. G20 leaders have yet to hit their stride in finding modes of discourse, debate and decision that strengthen global regimes for managing global challenges and that convincingly address the anxieties and concerns of their publics.
In most G20 countries, the social impact of the 2008 global financial collapse continues to be acutely felt. The monetary and fiscal stimulus provided by the G20 in the wake of the 2008 crisis worked to avert an immediate collapse in business and consumer confidence, but it has been inadequate, of itself, to return employment to pre-crisis levels.
When the G20 leaders meet in Cannes in early November, it will be clearer if, and why, the world economy has entered into a second recession in the space of less than four years. Even at the most optimistic, the world economy has performed less well than was anticipated at the time of the last two, or perhaps even three, G20 summits.
The G20 is the self-described “premier forum for international economic cooperation.” With the creation of the G20 at the leaders’ level, a clear line was drawn between “insiders” and “outsiders.” Like the G8 before it, some of those excluded from the new club perceive it as having a deep legitimacy problem.