Mexico faces a very large task. Actually Mexican officials face two rather daunting tasks. The first is to persuade G20 officials and indeed G2o Leaders that notwithstanding the crisis of the day, they must keep “front-and-center” the longer term tasks and objectives that put the G20 Leaders at the ‘high table’ in the first place. Through the immediate crises – most evidently the sovereign debt crisis in Europe – and the constant “pulling and hauling” to widen the agenda this way and that, the G20 Leaders Summit needs to construct an agenda and implement policy that secures measurable economic and financial reform.
The second, and even harder, task is to bring Leaders face-to-face with their own unwillingness to grasp the domestic political nettle. As an aside, officials need to alert media and experts to real failure of the G20 – political failure not at the international level but at the national level. The current failure is not a product so much of weak international institutions, a favorite subject of media and experts, but failing national leadership.
Now it may be unfair to call the European debt crisis – a distraction – for the contagion from an unstructured Greek default, or worse a number of Eurozone countries and the likely liquidity crisis that would spread quickly through global economy – is not an event happy to contemplate. But G20 Leaders need to resist “my crisis is your crisis” mentality that markets and Europe promote. In part this is “passing the buck” and at the recent Finance Ministers meeting it was clear that many countries – including, the US, UK, Canada and others were saying – you have to save yourself first – notably Germany – then we can consider wider support. It is a tug-of-war but meanwhile the G20 is “stuck” with this crisis that continues to crowd out needed longer term discussions of Strong Sustainable and Balanced Growth (SSBG) in all its myriad policy direction.
And then there is the need to address the host’s agenda. Stewart Patrick at the Council on Foreign Relations, freshly returned from Mexico’s gathering – the Think-20 – has sketched in his blog, The Internationalist, many of the interests Mexico brings to the G20 Table. Now this in the end may not be the agenda when the G20 Leaders meet in Los Cabos but much of this is promoted by Mexico. Mexico has pressed to promote “green growth” but it is not clear what that is and whether Leaders have a clear roadmap for incremental policy action. And food security has appeared as well. Like green growth food security is a worthy subject but it was there with the French leadership. Now Stewart notes that vice-ministers of agriculture plan to meet in April and May but he suggests that food security needs to be “bounced up” to Leaders. I think there is more than enough that needs to be addressed in the already created Action Plan. Governments need to take action to implement. Ministers get it done!
Now with respect to the SSBG framework and Leaders actions. Recently Uri Dadush of te Carnegie Endowment for International Peace and Kati Suominen of the German Marshall Fund of the United States (in fact the article can be found at the GMF website) wrote an article called “Is There Life for the G20 beyond the Global FInancial Crisis?” The authors tackle both the G20 agenda and where is the failure. Dadush and Suominen examining the volatile G20 agenda
Instead, the G20 countries, which together account for the vast majority of the ownership and voting power in the major global institutions, should focus only on the big picture and look to those institutions to translate the G20-designed strategy into explicit decisions – in other words, to find a technically and politically palatable way to execute and enforce the G20’s vision. This is the role – the role of the steering committee – that the G20 needs to continue carving out.
Now my colleague Dan Drezner (you can always catch him at Foreign Policy) has on a number of occasions – including with colleagues from SIIS, the Munk School, the Stanley Foundation, KDI and others at a conference in Shanghai – characterized the effort to “coordinate” global imbalances as “Mission Impossible”. But the economic framework of the G20 – the SSBG framework – requires the amelioration of global imbalances among the G20. That is the task. And as Dadush and Suominen recognize
Unsurprisingly, the G20 has thus far had little success in agreeing on a roadmap to effectively deal with global imbalances, and has also failed to set a clear goal for its efforts.
Moreover they point out that such coordination can only occur with the concurrence of domestic interests and then policy reform at the national level – but it would appear that Leaders are unwilling – or unable – to alter what these two authors describe as the “drivers of the imbalances”. Thus, China has yet to alter its export-driven domestic economy, notwithstanding the repeated rhetoric of China shifting to domestic consumption. Nor has the United States found a policy path to reduce its near “out-of-control” deficit and growing debt. And these are but two of a number of countries in the G20.
Global imbalances policy is a classic instance of all politics being local – but in this instance we are not describing purely domestic policy but the interaction of national policy with international coordination. But let’s be clear: this unwillingness to alter the domestic political equation and revise national economic policy is not a failure, on its face, of the G20 Leaders Summit – the informal ‘high table’ of global governance – but the failure of leadership to undertake the tough political decisions at home. The weakness is political leadership at home not at summit structures. Again as Dadush and Suominen point out:
While coordination failures are ancillary to the main problem – that resolution to issues facing the G20 often requires painful domestic reforms – they risk becoming means to deflect attention from the domestic reforms that are so badly needed.
So keeping the agenda on SSBG target, and cajoling G20 Leaders to take action at home – that is the real Mexican agenda
Image Credit: Government of Mexico