In considering the evolving role of the G20, it is worth reflecting upon the factors that shaped the group’s original mandate. As the first decade of the new century progressed, it became increasingly clear that the international balance of power had shifted, but the institutional framework, which sought to manage the global economy, had not adapted to reflect this new reality. The financial crisis of 2008 forced the leading economic powers (notably the US, where the crisis originated) to confront the need to integrate the emerging economies more effectively into international economic decision making.
Once convoked, the G20 did a creditable job of framing solutions to the financial crisis. Decisions taken at the London summit in 2009, and subsequently confirmed at Seoul the next year, laid out a constructive agenda — unfortunately, much of that work program remains incomplete. In the years since the first summit in November 2008, the G20 has proven itself as a crisis manager, but it has yet to lay the foundation for a role as an ongoing coordinating committee for the global economy. It remains an open question whether this transition will be feasible in the short term as a practical matter. For the moment at least, the political will among G20 leaders to deal with underlying systemic issues seems distinctly limited.
A number of factors are currently constraining accelerated G20 development. First, this is a US presidential election year, and significant American support for major institutional reform is very unlikely, especially if congressional action is required. Second, the European Union is still consumed by its own financial and economic problems, and European leaders are little inclined to confront their glaring overrepresentation in the decision-making mechanisms of key international organizations such as the International Monetary Fund (IMF) and the World Bank. Third, China is in the midst of an economic pause, and is trying to navigate a very sensitive political period as it nears the decennial domestic handover of power.
In the absence of any impetus provided by these three major actors, little forward movement can be expected in the G20’s evolution. Both symbolically and substantively, the IMF funding issue is illustrative of the conflicting pressures assailing the G20 as a group of states with divergent national interests. In April, the new IMF Managing Director, Christine Lagarde, approached the G20 countries as part of a major effort to increase the Fund’s lending capacity. Lagarde was able to engineer a significant increase in new pledges of more than $430 billion, doubling the IMF’s lending power and meeting its aim of erecting “a stronger global firewall” to contain future financial crises (notably in Europe, although not restricted to that region).
The list of non-subscribers to this effort was, however, reminiscent of Sherlock Holmes’ dog — which didn’t bark. Both the United States and Canada refused to contribute, maintaining that the European countries had sufficient resources of their own. Even more telling, the BRIC countries (Brazil, Russia, India and China) made conspicuously unspecific pledges, pending the outcome of the painfully slow negotiations over increasing IMF voting rights for the developing world. Clearly, the realignment of international economic power remains inadequately recognized at the heart of this central institution of global governance.
Some have cited the “hijacking” of G20 summit agendas by the need to respond to current crises as an inherent weakness of the G20 approach. Another closely related question concerns the G20 meeting agendas — specifically, whether these agendas should continue to deal primarily with systemic financial/economic matters or whether they should be expanded to include consideration of other (albeit related) topics such as climate change, energy, or development. In fact, agenda hijacking and agenda broadening are both reflections of the nature of G20 summitry itself. Simply put, if the leaders of the 20 most powerful countries in the world meet together, the clear expectation is that they will deal with the most important issues of the day. That, in turn, means if a specific crisis emerges at the time of a summit, then the leaders will be expected to deal with the matter, and the summit will necessarily have been “hijacked” by events. Similarly, and slightly more long term, although the arguments in favour of maintaining an agenda focus on financial and economic issues may make technical sense, as other large issues come to the fore (or other major international deadlocks emerge), leaders will want to expand the range of issues they discuss at G20 meetings, for understandable political reasons.
Officials and ministers may try to avoid both hijacking and agenda broadening, but they will likely fail. Once gathered together, leaders will talk about whatever they want, efforts of the Sherpas to maintain focus notwithstanding. That being said, there are ways of managing the evolution of the G20 process that take account of the legitimate need for the occasional, unavoidable hijacking, and of the gradual, substance-driven broadening of the agenda. The key in both cases lies with a combination of careful preparation and planning on the one hand, and maintenance of the leader-driven nature of G20 events on the other.
The single most important reform of the G20 process, at this stage, would be to concentrate the proceedings more clearly on the leaders themselves. This means, among other things, drastically reducing the number of people “in the room,” restructuring agendas to provide maximum time for leaders to have informal exchanges, and working hard to ensure effective follow up to leaders’ decisions.
Even though there is current fussing over the contention that the G20 finds itself somewhat becalmed as an evolving process, a clear measure of its success is the high probability that if the G20 ceased to meet tomorrow, some new version of it would undoubtedly have to be cobbled together. The membership might be somewhat smaller in the new group, but the need for the world’s most powerful economic actors to work together at the highest level would not simply vanish. In particular, the requirement to include the emerging powers in a meaningful way would be essential.
The G20’s evolution may slow through 2012 (although hopefully it will pick up speed again in 2013), but the group’s usefulness seems unquestionable. The key objective in the short term should be to maintain the steps already taken, which, as a practical matter, means systematically working through the London and Seoul agendas and reorganizing the format of the meetings to provide as much opportunity as possible for leaders to speak directly and informally to each other.