The political dimensions of Russia hosting the G20 in September are generally overlooked, but they deserve more attention. The success of the St. Petersburg meeting is very important to Russia politically, and to President Vladimir Putin personally. Putin would like to show Russians that he is a world-class leader and that Russia should be taken seriously. He wants to use the summit to demonstrate that he can make a positive contribution to the governance of the global economy. Putin’s desire to use the G20 meeting for his own political validation provides other members of the G20 with some leverage.

From President Putin’s point of view, the June G8 summit held in Lough Erne, Northern Ireland, was not a happy experience. He faced serious isolation for his position on Syria, to the point where Canadian Prime Minister Stephen Harper stated that the G8 now looked more like the G7+1. That remark would have hurt — given that Russia worked very hard during the 1990s to be fully included in the summit process. Putin will want to recover.

To understand the political dimensions of G20 summitry, one has to go back more than 20 years to the end of the Cold War. The G7 — the heads of government of the leading industrialized countries — had, after almost two decades, become a kind of self-appointed global steering committee. The G7 developed out of the need for enhanced coordination of global economic policy; leaders will, however, discuss whatever problem is currently on their mind, including security and political questions.

As the Cold War wound down in 1991, the G7 invited Soviet Union President Mikhail Gorbachev to join for part of its meeting. It was not a meeting of the “8,” but rather Russia was invited to meet with the G7. It evolved into a G7+1. These geometric distinctions and progressions are important.

At the 1991 meeting, G7 leaders discussed the transformation of the Russian economy away from its focus on military production, towards one driven by the incentives of a market economy with Mikhail Gorbachev. This meeting set the groundwork for Russia (the Union of the Soviet Socialist Republics dissolved at the end of 2001) to become a member of the International Monetary Fund and the World Bank (eventually, in 2012, Russia also became a member of the World Trade Organization). The political dimensions of the G7 outreach to Russia were, and are, clear.

It took six years for Russia to become a full member of what came to be called the G8 (after the 1997 summit). I was Sherpa for Canadian Prime Minister Jean Chrétien for the G7 summits held in 1995 (which Canada hosted), 1996 and 1997. I vividly recall that the extent of Russian participation in these summits was intensely debated in the preparatory meetings. Finance ministries were, by and large, against — arguing that full membership for Russia was not justified by the size and functioning of its economy. Although less explicit, there was also a doubt whether Russia would live by the unwritten “club rules.”  The Sherpas discussed this quite explicitly when they met as the G7; however, when they met as the G8, the discussion was, unsurprisingly, much more indirect.

It was clearly important to Russian President Boris Yeltsin to be included as a full member of the G7, and the Russians kept knocking on the door. They saw the G7 as a “club” — and they wanted in. This provided, and still provides, some leverage to existing members.

Of course, membership was a card to be played at just the right moment. The invitation to Russia and its eventual full inclusion was advocated on explicitly political grounds. Strobe Talbott’s book The Russia Hand[1] describes US President Bill Clinton’s (and Strobe Talbott’s) strategic management of the relationship with Russia. Clinton used carrots and sticks — incentives and disincentives; clearly, one of the major incentives was to offer progressively more time to Yeltsin to participate at the summits. Yeltsin had to learn that the G7 was not the place for a long speech — his first inclination — but that what was important was participation in an unstructured give-and-take conversation.

The US-hosted 1997 summit, held in Denver, was described as the “Summit of the Eight,” since agreement to call it the “G8” could not be reached beforehand. That was one step too far, or at least too fast, for several countries. Again, this underlines the importance of the political dimensions of these seemingly small distinctions of language. The commitment to meet in the future as the G8, beginning with the 1998 UK summit, was a decision made by the leaders in Denver.

Of course, the G7 still meets at the level of finance ministers and senior officials. The Russians may be invited to participate at the end of these meetings, but they do not particularly like this arrangement. One would think the G7 countries might have learned that there is a downside to inviting people into the room partway through a meeting, as they inevitably have to wait in an anteroom beforehand. But the G8 seems not to have learned that lesson. When the G7 became the G8, an invitation was extended to the BRICS (Brazil, Russia, India, China and South Africa) countries to participate in part of their meetings. The result was increased resentment at being excluded, rather than satisfaction from being at least partially included. No one, and especially a head of government, likes to feel they are receiving second-class treatment, joining the party only for dessert and coffee.

The G20 began its life at the level of finance ministers. The purpose of the G20 was to be more inclusionary, in recognition of new global economic realities. The G20 has been cautious to not enlarge its agenda. It may be the steering mechanism for international economic issues (see other articles in this series for how well it is doing), but it has stayed clear of the major political issues of the day. That is partly out of a belief that it should remain focussed on its central responsibilities and stated commitments, but also because a number of countries either don’t want a broader global steering committee at all or because some feel such a committee already exists in the form of the UN Security Council (again, there are arguments about its effectiveness).

When the G20 started to meet at the head of government level in 2008 (in Washington, DC), many people believed the G8 would disappear. That has not happened. Nor have the G7 finance ministers stopped meeting, despite the fact that they also meet as the G20. Heads of government are finding the burden of attending an ever-increasing number of international meetings very heavy. The result is that while leaders used to meet for the better part of two days, that is no longer the case. The meetings and opportunities for informal discussions to take place over drinks and dinner are much reduced. Moreover, at the G20 meeting, with so many heads of state, plus invitees, and heads of international institutions “at the table,” the room dynamics have changed — and not for the better. There can be as many as 500 people in the room. There are reasons why the invitees and the international institutions are present, but there is a cost as well — less time for building intimate relationships amongst leaders being the major one.

The Mexican presidency of the G20 made serious efforts to have more time in less formal meetings, to thereby engage participants in stimulating discussions. These seemingly logistical issues can be crucial to the success or failure of summits. If an agenda is too technical, it is unlikely to engage the interests of most leaders. Summits are at their best when leaders discuss what is on their minds. They are not useful when leaders are reading prepared statements. Let us hope the Russians maintain and build on the Mexican G20 success in this regard. Much will depend on the Sherpas, and on contacts directly between leaders in the run-up to the summit.

Typically, the host country puts forward an initiative. It is interesting that Russia has put forward “fighting corruption” as a priority this year. One can argue that fighting corruption is essential for the international economy to properly function and grow, so adding this initiative does not really involve enlarging the agenda. The measures proposed include:

  • “interdicting” foreign bribery;
  • combatting money laundering;
  • denial of entry for “corrupted” officials;
  • training; and
  • financial transparency and disclosure for public officials.

These are all worthy objectives, although they are not new ideas. We can only hope the specific initiatives that are decided are effective, and commitments go beyond simply paying lip service.

One way for the G20 to ensure it has an innovative, productive agenda would be to focus specifically on other emerging corruption-related issues that have a clear impact on the global economy. Cybercrime is one such issue that is a major problem (and Russia is in the middle of it). One hopes that Russia will commit itself not only to fighting corruption, but also cybercrime. Both are integrally important to the health of the global economy.

Not yet on the G20 agenda, but worth consideration, are the broader issues of Internet governance. The Internet is an increasingly important part of the global economy. It permits relatively cheap communication of voice and of data, as well as extraordinary access to information. It clearly contributes to economic growth, although some have suggested that the cost of cybercrime may cancel this out. The costs must include not only the value of what is stolen, but also the mounting costs of designing and redesigning Internet security software and hardware.

The G20 countries are, however, badly divided on Internet governance, and have been for many years. One potential outcome is that the global integrated Internet would be no more. Cybercrime would be a place to begin to engage in discussions of Internet governance. There are important divisions as to whether the present so-called “multi-stakeholder” governance of the Internet can be improved or whether the Internet should be “managed” by the International Telecommunications Union or some newly created body of the United Nations. The key split is between those who highly value “freedom” of the Internet and those who believe that sovereign governments should “control” the Internet. The waters have been muddied by leaks from the US National Security Agency. There is agreement, however, that more must be done to ensure that developing countries have enhanced access to and, more generally, benefit from the Internet.

While there is an argument that the world needs a more comprehensive global steering committee — a body that would address global political issues such as Syria, Iran and North Korea — and suggest the G20 is ready-made to step into this role, it is clear this is a jump too far for the G20 at this time. Nonetheless, these political issues will be addressed in bilateral meetings in September, as they are front and centre in leaders’ minds. I would argue that having the G20 address cybercrime and Internet governance more generally, would not enlarge the agenda, but would, in fact, contribute to strengthening the global economy. 

In any event, it is too late for much else to happen this year. Summit preparations are already too far advanced. But there is always next year. G20 summits are about high politics, not just economic policy. Leaders, above all the leader of the host country, need to show they are leading. This is especially important for President Putin in 2013. My idea is that leaders, with Australia’s support, or even better, at Australia’s initiative, could decide in St. Petersburg that in 2014 they should discuss inter alia the future of the Internet and how it should be governed. That would be an excellent political and economic outcome from the Russian-hosted G20. 

Endnote:


[1] See Strobe Talbott (2002), The Russia Hand, New York: Random House.

Having the G20 address cybercrime and Internet governance more generally, would contribute to strengthening the global economy.
Thematics
Program
The G20 summit in St. Petersburg, Russia will be held on September 5-6, 2013, and will mark the eighth time the G20 heads of government have met. The summit will bring together the leaders of the world's major advanced and emerging economies, with a focus on developing policies aimed at improving sustainable, inclusive and balanced growth, and jobs creation around the world. CIGI experts present their perspectives and policy analysis on the key priorities facing the G20 at St. Petersburg, including macroeconomic cooperation, sovereign debt management systems and stimulating international development.