Prescriptions for the G20: The Cannes Summit and Beyond

About the series

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.

In the Series

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.
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.
Mexico is thinking about its hosting of the 2012 G20 summit. The Ministry of Finance, the Sherpa office and other offices in the Ministry of Foreign Affairs, Labor and Agriculture are planning well in advance to help ensure a successful summit next June. Mexico’s scope for sculpting the agenda and preparatory process will be influenced by developments in the current economic turmoil — the G20’s priority will be action to avert a downturn scenario. Economic and financial issues may monopolize attention, sidelining non-financial issues for the moment.
The G20’s effort to tackle the global problem of corruption, arguably one of the group’s least anticipated and most unsung success stories, builds on work started by the G8 and other entities. The G20’s anti-corruption efforts, linked to the increased accountability, credibility and transparency of the global financial system, have led to deeper institutional engagement and laid the grounds for further progress.
The global economic recovery has lost considerable traction over the past six months, with both headwinds and downside risks having increased. Anemic growth in major advanced economies has become more entrenched, and unacceptably high levels of unemployment show no sign of decline. Uncertainty about the direction of policy, verging on a crisis of confidence, represents one of the major obstacles to achieving a more robust global recovery and stronger growth over the medium term.