The ‘Hare and the Tortoise’ – Global Media and their Continuing Harsh Assessment of the G20

Now I think it was my colleague Dan Drezner over at Foreign Policy who spent some time – at the moment I am at a loss to remember the exact piece – defending the G20 against the dismissive attacks that members of the media are so fond of producing following a G20 meeting.

Well our friends – in this case Chris Giles and Robin Harding at FT – were hard at it at the G20 finance ministers’ and central bank governors’ meeting during the just recently concluded ‘Spring Meetings’.

Here is a gem of a comment from these two media souls:

Since 2010, it has turned from being a cohesive group of te world’s most important economies, ensuring they took collective decisions to solve difficult problems, into a body that spends hours negotiating the punctuation in a communiqué that adds little.  … Countries still value the G20 greatly as a forum for dialogue, but complain that too many nations sit round the table and make unnecessary interventions, with little genuine discussion.  It has turned into a talking shop without much bureaucracy or idea of its role.  Outside a crisis, when nations want to solve problems and are willing to make sacrifices, the G20s relevance to people and companies is diminishing rapidly.

Mean spirited at least.  But are the two right?  Their judgment seems to me to ignore again,  the “incremental” but necessary efforts of contemporary global summitry decision-making.  The contrasting views expressed are bit like a “hare and tortoise” assessment of the G20.  Media looks for the success of the hare and is continually disappointed; for some of us this is about the tortoise and we remain patient.

Look it would be great to have this grand bargain-style G20 – the kind these two media folk and other media types seem to crave but that is not what the G20 offers – nor indeed do many other global summitry settings.  These summits are iterative and depend on the hard work of working groups, ministerial gatherings, sherpa meetings, secretariat work and the work of developed transgovernmental regulatory networks.  The constant reference by media and experts to the actions of the G20 at the abyss in 2008 and 2009 hardly defines the manner in which the G20 acts.  The current efforts on financial reform and SSBG – strong sustainable and balanced growth – are difficult policy developments.  So a quick look at the boring communiqué is required.  Some takeaways:

  • advanced economies will develop medium-term fiscal strategies by the St. Petersburg G20;
  • setting a global standard for public debt management – the IMF and the World Bank will consult with members on implementation and review of “Guidelines for Public Debt Management.” A progress report will be made to the Leaders Summit;
  • The possibility of providing additional policy recommendations to the Leaders Summit on regional financing arrangements (RFAs) and strengthening cooperation between the IMF and RFAs;
  • The efforts to mobilize long-term financing that includes adoption of the Terms of Reference of the new new G20 Study Group with input from the IFIs, OECD, FSB UN and UNCTAD with possible recommendations for the finance ministers and central bank governors later in the year;
  • assessments from the Basel Committee on Bank Supervision (BCBS) on the compatibility of Basel III and the BCBS regulations including a report in July on risk-weighted assets;
  • the FSB will report to the Leaders Summit on the efforts to identify the policies on how resolve financial institutions in an orderly manner – the “too big to fail” issue;
  • FSB concluding the legislative and regulatory reforms for OTC derivatives reforms;
  • The FSB providing to finance ministers and central bank governors the macroeconomic impact study of OTC regulatory reforms;
  • Policy recommendations for the Leaders Summit on oversight and regulation of the shadow banking sector;
  • A call from the finance ministers and central bank governors to the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) US  to conclude by 2013 the work of achieving a single set of high-quality accounting standards;
  • Recommendations from the Bank of International Settlements (BIS) and the International Organization of Securities Commissions (IOSCO) on short-term interest rate benchmarks with recommendations for reform by July and in turn oversight and governance frameworks for financial benchmark reform to be presented to the Leaders Summit;
  • the launching by the FSB of a peer review of national authorities’ steps to reduce reliance on credit rating agencies’ ratings – with a status report to be provided to the Leaders Summit;
  • a report from the OECD on progress toward countries signing or expressing interest in signing the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and a report back from the OECD -following work with the G20 – on new multilateral standard on automatic exchange of information; and
  • a July report from the OECD with comprehensive proposals to the finance ministers and central bank governors on tax base erosion and profit shifting.

Worthy of headlines from the media – probably not.  To the extent that these actions and reports don’t lead to key national commitments – meaning regulations and laws – then our media friends may be right.  But progress in some or all of these many initiatives warrant some attention.  And it is all this work that media folk are quick to just ignore.

I would also say that collective discussion – contentious though it may be – over Japan’s quantitative easing policies – is important.  For the moment,  it would appear that most of the G20 are prepared to accept that these Japanese actions are not steps in competitive devaluation, which might, if so described, lead to national responses that could harm many.   We will have to see, however,  the impacts on some of the large emerging market countries and then their responses.

Finally, on the economic growth front it is evident that the G20 believes that not enough is being done to counter global economic weakness.  Clearly a key culprit in this is the EU and in particular the eurozone, though the UK figures in as well.  This of course appears to be a continuing drama from the close to irresponsible actions in the eurozone.  I have consistently argued that the G20 has little role here – but  to urge a change of course which it appears now to be doing.  But the G20 is constantly being dragged into this European drama.

The bottom line is that the media misses the work in progress – and announces failure.  I think that is going too far at this point.

Image Credits:  logo – www.pnswb.org and picture – www.nannewsngr.com

Rising to a Summit – Australia’s Kevin Rudd and US-China Leaders

 

Kevin Rudd, the former Prime Minister and Foreign Minister of Australia has been on the “speechifying path” recently – I guess that’s what comes with others running the show.  He has been in North America and in the granddaddy of  foreign policy journals – Foreign Affairs – he has provided an interesting addition to the examination of US-China relations – “Beyond the Pivot: A New Road Map for US-Chinese Relations“.  But my suggestion is that rather than a road map his piece is more detour as he describes contemporary global summitry and how summitry today can be used to achieve both progress and stability in this most important of great power relations.

Now I must say I am a fan of Rudd – far more knowledgeable about, and interested in, international relations and international policy than most contemporary leaders. He has written a serious piece on US-China relations.  Shining a light on the new leaders and what this new leadership should examine probably would have been enough for me but in addition he has become a strong proponent for advancing the US-China relationship by a regular series of summits between the leaders – Xi Jinping and Barack Obama.  While I am never one to ‘pooh pooh’ summit advocacy, I think our former Australian leader has missed the contemporary structure of summitry and the effective means to influence contemporary regional and international stability.

So let’s drop back for a moment and examine global summitry.  Now at the global summitry project here at the Munk School of Global Affairs the working definition of global summitry is:

The   variety   of   actors – international   organizations, transgovernmental networks, states and select non-state entities – involved in the organization and execution of global politics and policy.   Global summitry is concerned with the architecture, the institutions and most critically the political and policy behavior and outcomes in global governance.

This is not your old style summitry.  It is not primarily about the “great man” theory of summit leadership – you know key leaders gazing intently across from each other determined to avoid conflict, or advance a new strategic direction – be they Chamberlain and Hitler or Kennedy and Khrushchev or a little closer to Rudd’s theme – Mao and Nixon .

I have pressed the case in this Rising BRICSAM blog and will again in the new ejournal Global Summitry we are about to launch at the Munk School of Global Affairs that to look at these leaders summits alone,  referring here particularly to the apex of such summitry today – the informal and now annual G20 Leaders Summit –  misses the better part of the structure of international governance.  Today a significant structure underpins and motivates summitry.  I call this view the ‘Iceberg Theory of Global Governance‘.   In the case of the G20 there are: the periodic meetings of the finance and central bank governors; the sherpa meetings – the personal representative of the leaders – where the agendas are put together, the meetings of the Working Groups – and there are more than a few, the meetings and reports from the traditional IFIs including, the IMF, World Bank, others, the transgovernmental regulatory organizations like the FSB, BCBS – you get the picture – a large largely unstructured structured institutional network that feeds the periodic meetings and moves the agenda forward to completion in many circumstances.

I think Rudd is rather too enamored with the old frame of global summitry.  Rudd urges that the United States choose the following course:

A third possibility would be to change gears in the relationship altogether by introducing a new framework for cooperation with China that recognizes the reality of the two countries’ strategic competition, defines key areas of shared interests to work and act on, and thereby begins to narrow the yawning trust gap between the two countries.  Executed properly, such a strategy would do no harm, run few risks, and deliver real results.  … A crucial element of such a policy would have to be the commitment to regular summitry.

As he points out there are many informal initiatives between the two great powers, “[b]ut none of these can have a major impact on the relationship, since in dealing with China, there is no substitute for direct leader-to-leader engagement.”  As a consequence Rudd urges:

The United States therefore has a profound interest in engaging  Xi personally, with a summit in each capital each year, together with other working group meetings of reasonable duration, held in conjunction with meetings of the G20, the Asia-Pacific Economic Cooperation, and the East Asia Summit.

But the governments also need authoritative point people working on behalf of the national leaders, managing the agenda between summits and handling issues as the need arises.  In other words, the United States needs someone to play the role that Henry Kissinger did in the early 1970s, and so does China.

Now Rudd suggests that for an agenda the leaders need to then take one or more issues that are currently bogged down and “work together to bring them to successful conclusions” and he suggets tackling the stalled Doha Round issues, climate-change negotiations, nuclear nonproliferation or specific outstanding items on the G20 agenda.  Rudd concludes:

Progress on any of these fronts would demonstrate that with sufficient political will all around, the existing global order can be made to work to everyone’s advantage, including China’s.

Now Rudd doesn’t end there but has suggestions for the regional dimension including obviously the island disputes and a protocol to address incidents at sea; and on the bilateral matters Rudd urges that military-to-military contact be upgraded and the talks should be insulated from the ups and downs of the US-China relationship.

Now there is value in urging bilateral summits.  But let’s not turn these current global summit efforts into a G2 – there is much suspicion already around the high table of an implicit bilateral power consortium. An explicit effort of this sort could only undermine collective summitry efforts.  So let’s avoid China and the US dealing as a central agenda with the global agenda of the G20 or the EAS Summit.  And let’s build this new summit network off of let’s say the bilateral S&ED (Strategic and Economic Dialogue).  Here groups tackle bilaterally through a vast network of national officials and ministries the bilateral issues that raise tensions and conflict in US-China relations.

I have heard that President Obama, following the G20 Toronto Summit, complained that he was meeting all the same leaders from one summit to another.  I hope his officials pointed out that that was exactly the point.  So for both Obama and Xi, the G20 or APEC or EAS remains part of global governance structure that is needed for collective discussions and decision-making – leave the bilateral to the bilaterals.

And as for the military-to-military discussions I suspect it still a vain hope to expect these meetings to be insulated from the competitiveness and rivalry that remains an element of the great power relationship. However, I would think the building of a more structured and regularized network dedicated to the S&ED – its tasking and summit meetings – could in the long run insulate the military discussions from the displays of political displeasure.

There is clearly a case for global summitry for the US-China relationship it is just not the model Rudd suggests.

Image Credit:  www.heraldsun.com.au