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Friday 18 Aug 2017 | 11:48 | SYDNEY
Friday 18 Aug 2017 | 11:48 | SYDNEY

G20: Crisis committee, or more?



17 September 2012 13:27

In the (almost) three weeks since it was announced that we are establishing a G20 Studies Centre here at the Lowy Institute, I reckon the most common reaction from interested observers (following on from some initial wishes of good luck) has been some variation on the statement, 'but the G20 is in trouble, isn't it?' 

While I think some of the G-pessimism is overdone, there's also no doubt that, for example, the FT's warning that the G20 risks irrelevance is pretty representative of widespread concerns that the grouping has lost a degree of credibility and momentum. I still remember last year's Cannes Summit being described as 'comically irrelevant' in the same newspaper.

In fact, as I noted in my first post on the announcement of the Centre, observers have been warning that the G20 was struggling since at least the Seoul Summit. In my view, a big part of the G20's perception problem is that, by getting off to such a good start, the grouping raised unrealistic expectations about how it was likely to function. Forged in crisis, the G20 benefited from the 'hang together or hang separately' environment that surrounded its initial meetings at leaders' level. Given the diversity of its membership, however, it was inevitable that this consensus would evaporate and be replaced with disagreements and conflicting national interests.

After talking to some participants, it seems clear that there is a sense of disenchantment about how some G20 meetings are run: too much process and too little substance; too many agenda items and too little action; too many pre-prepared positions and too little meaningful discussion. There are a range of explanations for this, including the apparently still growing number of those involved (the G20 is in reality a G20-) and the ever-present pressure to come up with new 'deliverables' or 'announceables'.

It follows that a critical objective for future G20 chairs, including Australia, is to make sure that participants continue to value their attendance at G20 meetings, rather than viewing them as an unfortunate imposition on their time.

One way to approach this problem is to think again about the G20's role. To date, this has often been couched in terms of whether the group can or should transition from its initial role as global economic and financial crisis committee to the grander, post-Pittsburgh role of global economic and financial steering committee – the One G to rule them all.

If it turns out that the G20 is fit to be the world's crisis committee but nothing more, then expectations of future G20 meetings change. Instead of the focus being on managing international economic cooperation and delivering improved economic coordination, the central function of most G20 meetings is going to be much more modest. It will be to provide a regular opportunity for leaders, finance ministers and central bank governors to build working relationships in order to make sure that, when a crisis response is required (like at the peak of the GFC), it will be quicker and easier to deliver. 

In this model, the key thing would be to make sure that the summits continue and hence that participants basically enjoy attending them. In this sense, Steve Grenville's comparison to a 'children's birthday party, where the main objective is to make sure that no one feels excluded, every participant wins a prize and everyone goes home happy', would actually make for a reasonable, if somewhat tongue in cheek, description.

On the other hand, if the G20 is to meet the rather higher expectations after the Pittsburgh declaration, then future meetings are going to need to deliver much more than happy attendees. In particular, they will have to demonstrate that the group is capable of producing effective international economic cooperation in an environment where some believe this is almost impossible

That means either making demonstrable progress on the items already on the G20's agenda or recognising that no more can be done on a given item and removing it before new commitments get added. An effective global steering committee will be measured by successful initiatives, not by an ever-expanding list of to-do items, working parties and outsourced reports. This steering committee model requires much more work than the birthday party model, but the rewards would likewise be much greater, and the promise of Pittsburgh would be closer to being fulfilled.

Photo by Flickr user jasoneppink.

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