After serious progress at APEC among the leaders, what can we expect from this weekend’s G20 leaders meeting in Brisbane. The continuing knock on the G20 as a “talkfest” continues. Chris Giles of the FT, no fan of the G20, declaring:
It leaves the G20 as something of a forum for grandstanding, bilateral meetings over geopolitics and impotence on world economic affairs.
There are repeated warning from media and other experts that the G20 has somehow reached a watershed. Ben Doherty at the Guardian has declared: “This week’s Brisbane meeting of the Group of 20 will be a crucial test: can it be a genuine agent for change, or just another tired horse on the merry-go-round of international confabs?”
Mike Callaghan, the Director of the G20 Studies Centre at the Lowy Institute in Australia says leaders need to focus their reforming efforts on a few key areas. Callaghan has suggested in the same Guardian article that the G20 Leaders Summit can make progress in at least these areas:
“He says the clear areas for reform – tax, global financial regulation, and trade – will headline Australia’s G20.”
Key Australian officials, including the Finance Minister Joe Hockey, have repeatedly declared that this G20 needs to focus on economic growth and jobs. This focus has been repeated by Australia’s prime minister: “The focus of this G20 will be on growth and jobs,” Abbott said at a press conference with Cameron.”
But two things may well stymie the best efforts of the host’s leaders to keep a sharp and narrow economic focus. First, there is the ever present issue of what the leaders want to talk about, whether the issue is on the agenda or not. Thus at the recent Russia G20 Summit in St. Petersburg, at least at the margins, leaders talked about what actions should be taken in Syria. The evident policy equivalent at this summit is Russia’s continuing involvement in the Ukraine. And it is fair to say not only will some leaders wish to confront President Putin, if only on the margins, over Russia’s actions but the media ever-focused on controversy is far more likely to pick up on the Ukraine discussions than to expend print on the let’s face it the far more mundane and complicated international economic issues.
The second reason we may see far less discussion on a number of the key issues is that various countries have resisted completion of work on various policy initiatives. The G20 is, as we’ve pointed out, not defined by the Leaders Summit. The Summit is a way to ratify agreements reached, or to suggest the need for policy direction. Again as Mike Callaghan recently suggested: ” the G20 is not a doer, it’s a meeting that sets strategic direction” – is crucial to managing expectations of it.”
Below the leaders level there are two networks of policy making – the finance track and the sherpa track. These tracks include many meetings of ministers of the G20, the working groups that the G20 has established, the networks of various transgovernmental organizations such as the Financial Stability Board and tasking and reporting from formal institutions including the OECD, the IMF, World Bank, etc. These various bodies undertake the heavy lifting, creating the recommendations and policies that leaders then must approve – and most importantly must take back to national legislators or prepare executive policy.
Early in the year there appeared to be significant momentum on an anti-corruption initiative. Corruption many believe result in serious economic waste in policy initiatives. However, it would appear that China is not there yet – presumably focused on its own anti-corruption initiatives. In any case it may well be that the G20 effort may be muted.
Then there is the economic center piece of this year’s summit: the national pledge to raise growth some 2 percent above expectations over the the next 5 years. Australia has pressed all leaders to move forward on this and has targeted a serious infrastructure initiative involving the private sector. Australia had promoted an infrastructure hub to move this private-public initiative along. However, recently the US administration has cooled to this infrastructure hub believing apparently that this will further detract from infrastructure initiatives of the World Bank and the various Multilateral Development Banks including the ADB in Asia, a Japan dominated institution. The efforts of these traditional banks have come under pressure already from the the New Development Bank – an initiative of the BRICS countries – and in Asia from the China-promoted Asian Infrastructure Investment Bank (AIIB). So recent discussions have been far more muted than earlier statements from Australian officials on this initiative.
While some of the criticism of the G20 is ill-informed and even self-serving, there is no question that the G20 Leaders Summit has made a hesitant and incomplete transition to a steering mechanism for mid-term global governance policy making.
Let’s see if Australia magnifies or mutes this rough passage.
Image Credit: griffith.edu.au