The St. Petersburg Summit: Obama’s Futile Quest for Support on Syria Overshadowed the Summit’s Economic Successes

September 10, 2013

If the G20’s leaders were looking for an issue on which to prove the G20 capable of expanding its work beyond the purely economic agenda (which they were not), they would certainly have chosen a different one than the current crisis in Syria. 

It was known from the start that this issue would be very divisive. Many countries had already made their views clear for and against the Obama administration’s proposal for a military strike, and where countries had not, it was not difficult to guess where they would come out on the matter. 

President Obama must have known this, and yet he persisted in using the occasion in a campaign to advocate a line of action on which there could be no agreement. Why? Did he want to use the summit to burnish America’s image for taking the high ground on this terrible turn in the Syrian civil war? Did he hope his approach would gain him support in Congress? Was he trying to embarrass his host for Russia’s continued support of the Assad regime?

Unfortunately for Obama, the main outcome seems to have been to strengthen the resolve of those against the US plan, to force out into the open those leaders whose opposition to a strike has, so far, been muted, and to draw greater attention to the arguments against a strike. His failure to garner support and change minds has served to highlight America’s declining influence and ability to exercise global leadership, and will only embolden Obama’s political opponents in Washington in their efforts to deny the administration the congressional approval that seemed within reach earlier in the week.

Worse, leaders leave St. Petersburg not only with their divisions more deeply etched on the plan for a strike, but apparently no further ahead on other possible approaches for dealing with this increasingly vicious civil war and the reprehensible use of chemical weapons by Assad.

As for the impact on this summit, the issue has dominated the media coverage, and public perceptions of the G20 and its effectiveness (or lack thereof, if it is judged on the Syrian issue, as many will). This is unfortunate. It will also serve as a cautionary example for future summits when there might be temptations to expand the G20 agenda into the political domain. This is not a happy precedent.

It is hard to know to what extent Syria distracted leaders’ attentions from dealing with pressing economic issues.  BRIC countries cannot have been happy to have this matter take precedence over their primary concerns about links between US monetary policy and their struggles with declining growth rates, capital fight and falling currency values.  

While the formal agenda went ahead as planned, some of the private conversations and pull-asides that would normally be given to sorting out differences over economic matters were certainly impacted. The leaders-only dinner on Thursday evening — traditionally an important informal event focusing on key global economic issues of the moment — was apparently taken over by the Syrian issue.

Just the same, it does appear that despite the time and attention given to the Syrian crisis, St. Petersburg produced some solid economic outcomes.   

Much of this was the result of progress since the Los Cabos summit on the G20 work program, which leaders mandated and have encouraged in the lead up to St. Petersburg.

One worthy outcome was the decision to press ahead with greater cross-border transparency on tax data, and an initiative to cooperate on efforts to ensure that corporations doing business in more than one country do not avoid paying taxes in those jurisdictions where “economic activities deriving the profits are performed.”[1]  Another plus is a commitment to press ahead with the G20 Anti-Corruption Action Plan.

Leaders also agreed to pursue “until the job is done” the G20’s critical work since 2009 on regulatory systems and cross-border arrangements affecting banks, insurance companies and other financial businesses, to prevent future financial crises.

This and other progress is partly the result of the emphasis on G20  “accountability” pushed by Canada and others to drive implementation of past commitments. The G20’s record of meeting expectations and deadlines has not been perfect, but it means that summits should always have some good results to report. 

Other outcomes required some final negotiation in St. Petersburg. This includes the renewal, for a further three years, of the 2010 Toronto summit’s commitment not to introduce any new protectionist trade measures, and the agreement that advanced countries (and some others) committed to provide medium-term fiscal strategies for bringing their fiscal deficits under control, again building on an earlier Toronto agreement. Careful wording allows flexibility for the United States and others with regard to promoting growth. Canada provided a precise debt reduction target of 25 percent of GDP by 2021, a step too far for most.

In the macroeconomic area, there was an agreement that future monetary policy changes should be gradual and communicated in advance, an important recognition of BRIC concerns over lack of clarity from the US Federal Reserve concerning the speed and timing of its exit from quantitative easing policies.

These and other measures set out in the (overly long) communiqué and its annexes indicate that St. Petersburg met and probably surpassed its modest promises of success. But for the G20 as institution, it will be remembered more in the public eye for its failure to find a way forward on the Syrian issue. 

[1] From the Leaders’ Declaration.

Part of Series

G20 St. Petersburg Rapid Response

CIGI Experts share commentary and analysis in response to the G20 Leaders' Summit in St. Petersburg, Russia held September 5-6, 2013.

About the Author