- By David BoscoDavid Bosco is an associate professor at Indiana University's School of Global and International Studies. He is the author of books on the U.N. Security Council and the International Criminal Court, and is at work on a new book about governance of the oceans.
Given all the talk of the G-20 becoming the world’s leading financial consultative group–and given the generally high marks it received during the 2008 crisis–the group’s inactivity during this latest round of economic turmoil has been striking. The consultations of G-7 finance ministers appear to have been much more substantive than anything the G-20 has done in recent weeks. In today’s FT, Alan Beattie and Joe Leahy pursue the question of the G-20’s low profile:
The episode also underlined the limits of the much-touted G20 as a forum for international economic management.
“The G7 can’t do much more than wave a magic wand and hope for the best,” said Stephen King, chief economist at HSBC in London. “As for the institutions of international policy co-ordination – what happened to the G20?”
Finance ministers and central bank governors from the wider G20 grouping, which includes systemically significant emerging market countries, put out a shorter and blander statement several hours after the G7. “In a situation like this, if you are really going to tackle problems head on, you need China to be involved,” said Uri Dadush, an expert in international economic policy at the Carnegie Institute in Washington.
The problem, of course, is that you bring in many more players than just China when you activate the G-20 machinery, some of whom are peripheral. Coordinating consulations and joint statements with all these players is time consuming, and key governments may have decided that it’s not worth the effort. This crisis underlines the need for a more workable international crisis committee that brings together the United States, the main European players, Japan, China, India and perhaps Russia and Brazil.