The media doesn’t get it. John F. Kennedy observed that “The great enemy of the truth is very often not the lie — deliberate, contrived and dishonest — but the myth — persistent, persuasive and unrealistic.”
The media perpetuates the myth that 20 political leaders can crunch long-standing issues and solve complex problems in one and a half days. The G20 includes a US president who cannot control his Congress, a Chinese president grappling with overwhelming domestic challenges, a fractious group of Europeans who cannot agree on fiscal policy and a Japanese prime minister who is culturally unable to make a commitment on his own authority — and these are the more powerful members of the group. It is naive to expect the G20 to make decisions. It was certainly foolish to expect that Cannes would resolve the euro crisis, reverse the global economic slowdown, put an end to currency misalignments, adopt a Tobin tax and new regulations on banks “too big to fail,” restrict speculation on food markets, save the Doha Round, and deal conclusively with climate change. If the gridlocked US political system is unable to agree to a medium-term debt reduction plan while still stimulating the economy in the short term, it is wishful thinking to expect that G20 leaders can do so.
The G20 is simply a steering committee. It raises the profile of issues and prepares the ground for decisions by commissioning work. The G20 influences events by calling for action and reports from a variety of actors — international organizations, ministers and groups of officials. The G20 should be judged on the nature and quality of its instructions, and whether they are followed up. The Cannes Declaration was replete with remits and directions. Its 92 paragraphs included dozens of requests and calls for action. Some examples are:
- The IMF, OECD, International Labour Organization and World Bank were asked to report on job creation. Labour and employment ministers were instructed to meet to review progress.
- The World Bank, regional development banks, IMF, UN Conference on Trade and Development, OECD, Bank of International Settlements (BIS) and the Financial Stability Board were asked to report back with ideas to deepen local currency bond markets.
- The IMF was asked to clarify Special Drawing Rights composition and to improve its surveillance toolkit.
- Detailed instructions were given to the Basel Committee on Banking Supervision, the International Organization for Securities Commission, finance ministers and central bank governors, the BIS Committee on Payment and Settlement Systems and the OECD for further work on financial issues.
- The International Energy Agency, the International Energy Forum and OPEC were asked to work together on recommendations on gas and coal market transparency and on oil price reporting agencies.
- Finance ministers were asked to report back on reforms on inefficient fossil fuel subsidies and on climate finance.
There were many other instructions, including to the Global Marine Environment Protection working group and trade ministers. The G20 Sherpas were instructed to report on the G20’s own working methods. Altogether ,there were 15 calls for reports and at least 14 other directions or requests.
Perhaps the most important outcome of the Cannes summit was the G20 decision to formalize the “troika,” the past, current and future presidencies. Instead of the G20 host handing off the chairmanship after their summit, as Canada did in June 2010 and the Koreans did last November, the troika will provide for institutional memory and continuity. This innovation will lead to enhanced attention to monitoring and assessment, and hence, to the implementation of G20 commitments. Hopefully, the Mexican presidency can arrange for an informal and non-bureaucratic secretariat that will support the preparations. They would be wise to repeat the initiative of requesting a report such as Prime Minister Cameron’s on governance, and invite the Chinese president to prepare a report for Los Cabos with recommendations on an item of interest.
The former Arizona official, Carolyn Warner, noted: “Years ago, fairy tales all began with Once upon a time...now we know they all begin with, If I am elected.” The media serves the public very poorly by dumbing down their reporting and pretending that instant gratification is possible. It is a lot more difficult and less entertaining to assess the G20 by evaluating its performance as an agenda setter and steering committee. When facing the current global crises, we all want to believe in magic and that the G20 leaders are fairy godmothers.