G-20: “A sense of normalcy should not lead to complacency”

The G-20 has just released its "leaders’ statement" on the Pittsburgh summit. I’ll have more on this in a minute, but the quick overview is that they patted themselves on the back once again for preventing a global recession and outlined what they agreed upon at this conference.

The highlights below the jump:

• They pledged to "avoid any premature withdrawal of stimulus," despite some pre-conference rumblings to that effect by Japan and other. No details about an "exit strategy" on this front
• They supported the United States’ "Framework for Strong, Sustainable and Balanced Growth," which calls on countries to work toward rebalancing the global economy. Deficit countries (e.g. the U.S.) pledged to promote private savings; surplus countries (e.g. China) vowed to promote consumption and rely less on exports, but it’s not clear what sorts of measures are being put in place to make this happen, and China insists it is already doing what is needed. (As some have noted, Americans are already saving more and Chinese are already saving less, so to some extent rebalancing is already underway)
• In language pushed heavily by British Prime Minister Gordon Brown before the meeting, they called the framework a "compact"
• They did pledge to raise capital standards by 2011, as U.S. Treasury Secretary Timothy Geithner wanted, but it’s not clear if or how a pre-summit dispute between Europe and the United States on this question got resolved
• The G-20 is now officially "the premier forum for our international economic cooperation," and the Financial Stability Board (FSB) that was established in London in April is charged with monitoring financial regulatory reform
• Developing countries are getting "at least" a 5 percent boost in their share of the International Monetary Fund, another Geithner victory, but the details are to be negotiated by January 2011. The IMF is also getting another $500 billion (I heard, but haven’t confirmed, that the shift is coming at the expense of Belgium and the Netherlands)
• G-20 leaders recommended, but did not commit to, a 3 percent boost in power for "developing and transition countries" at the World Bank, and vowed to reach an agreement on this issue by the 2010 spring meetings
• No strong commitment to the Food Security Initiative announced at the G-8 summit in L’Aquila, Italy, but the World Bank is welcome to set up a new "trust fund" for that. Nothing on the $20 billion pledged in Italy
• Fuel subsidies are bad, and we should get rid of them, but in a defeat for Obama, no measure or timetable will be put in place to make that happen. That’s a task for the next meeting (in Canada in June)
• "We will fight protectionism." But not very hard…
• "We are committed to bringing the Doha Round to a successful conclusion in 2010." But Barack Obama, for one, hasn’t invested any political capital in doing so, and good luck getting the French to roll back their ag subsidies
• "We will spare no effort to reach agreement in Copenhagen through the United Nations Framework Convention on Climate Change (UNFCCC) negotiations." But privately, nobody thinks Copenhagen will be a success, and some countries — India and China — seem to be hoping it fails so that developed countries start coughing up dough and technological assistance
• The IMF will report on whether countries are pursuing policies "consistent with more sustainable and balanced trajectories for the global economy"; no discussion of penalties if they don’t
• The FSB is charged with monitoring how firms and countries are handling the recommended reforms of bankers’ pay (one recommendation NOT made is the French call for hard caps on how much bankers can be paid)
• "We agree that the heads and senior leadership of all international
  institutions should be appointed through an open, transparent and merit-based process." No more closed door, clubby appointments of Americans to head the World Bank and Europeans to lead the IMF?
• No commitment to reducing trade barriers on clean energy technology
• No agreement yet on whether developed countries would provide climate-change financing
• Some nice language, but no firm commitments to helping the poor, and no acknowledgment that the Millennium Development Goals are now way off-track