The London G20 summit turned to be an unanticipated success. In the weeks and days before the event, signs were gloomy of any positive outcome. The French and Germans were saying ‘no’ to any major collective stimulus package. Gordon Brown as host was losing his personal bounce amidst increasingly pessimism about the UK economy. And even the Barack Obama phenomenon, as directed towards his trip to the London G20, appeared to be more about style than substance.
On the day, however, the G20 turned sunny like the actual weather in London. Although the tensions between the ‘Anglo-Saxon” stimulators and the Continental regulators were still played up the real agenda was playing out in other ways. As predicted by CIGI blogs in the past the trans-Atlantic tensions should increasingly be seen as the side show. The game is how the big emerging economies are being brought in to the pivotal hubs of global governance.
There is still some signs of Southern solidarity in this rise of BRICSAM-plus. But the sense of moral authority is now meshed with massive economic capabilities. China is in a category of its own in its ability to mobilize resources, as shown by its massive $US 585 billion government stimulus package. But each of the big three emerging countries (China, India and Brazil) are now major players in unanticipated ways as demonstrated by their roles as creditors to the IMF. As part of the announced $1 trillion IMF initiative, China contributed $40 billion. India has announced it is thinking of adding up to $11 billion to the IMF and Brazil is contemplating putting another $4.5 billion on top of its $10 billion already in.
There is bound to be new sorts of tension as the G20 works from being a crisis committee to a new concert of nations. Luiz Inácio Lula da Silva has shown he has quite willing to point fingers as to who is to blame for the crisis. And China took umbrage over the push of the G20 into bringing tax havens to heel, including Hong Kong and Macau.
Yet what is impressive is that these rising states contribute to rising institutions. Some of these institutions have come back in, as witnessed in th case of the IMF. Others move more into the spotlight, as in the case of the revamped Financial Stability Forum (now Board). But in centre stage is the G20 itself.
Does the G20 have the means to become the summit of summits? Certainly it has a sense of momentum as witnessed by the competition to have another one in another 100 days or so.
But the G20 continues to have some built in disadvantages as well. It is still a little too flabby, with a few countries in by legacy as opposed to firm logic if the G20 is intended to be the new pivotal concert of nations. It is still an ad hoc organization. Its two meetings have been in the North, Washington DC and London not Beijing or New Delhi. And its agenda remains highly technical not the strength of too many leaders.
Other contributors are welcome to join in about what this means for the G8 and indeed for the future of global governance. The G20’s trajectory is an impressive one. However, it remains too early to tell what the complete outcome will be. The story of the G20 still has some interesting chapters to go.