Is the G-20 Still the World’s Crisis Committee?
Only by widening its remit beyond financial and economic concerns to include broader issues of foreign policy can the global body stay relevant.
Does anyone think the G-20 is still relevant? As China is preparing to lead the G-20 over the next 12 months — from Dec. 1 to the end of November 2016 — it is an appropriate moment to reflect on whether the G-20 is still fit for its stated purpose.
This is a recurrent question among policymakers and experts who take part in these long and often inconclusive meetings, drafting and redrafting long, verbose documents that nobody reads. And yet somehow, every year, the leaders of the G-20 countries say how important it is for them to get together in a rather informal setting — more of a club than a formal organization — to discuss “what keeps them awake at night.” Indeed, from the global financial crisis to the euro sovereign debt mess, the world and its problems have never failed to provide the G-20’s leaders with critical items for discussion. But never like this year — with the massive terrorist attacks unfolding in Paris on the eve of the Antalya Summit — had the G-20 leaders been faced with an international crisis that transcends the traditional remit of finance and economics.
Given that the Antalya G-20 meeting began just 24 hours after the Paris attacks ended, the summit played a key role in the global response to the aftermath of the massacre. As in the wake of the Lehman Brothers meltdown, it was reassuring to see the leaders of the world’s main economies — many of them members of the U.N. Security Council and NATO — focusing on the problems of Syria, the Islamic State, and terrorism. The wording of the official communiqué suggests that the G-20 had intended to tackle the crisis in Syria, but in a tangential way, through a discussion on the refugee crisis. Indeed, a “coordinated and comprehensive response to tackle this crisis, as well as its long term consequences” was already on the official agenda. But the events in Paris forced leaders to focus more concretely on the Syria problem.
Let’s be clear here. The G-20 is an informal group without a formal mandate; thus its limited power is based largely on peer pressure. It is not, and it is not supposed to be, the forum where things happen, but where solutions can be incubated, fleshed out, and brokered. This is what the G-20 has consistently provided in the last seven years, since its leaders were summoned to Washington to discuss a coordinated response to the global financial crisis. Arguably, it is easier to coordinate policies when the crisis is as global as in late 2008/early 2009, when GDP growth dropped everywhere in the world. From 2010 onward, the episodes of crisis have become more regional, notably with Europe as the epicenter. Thus, it’s fair to argue that the collective action and purpose of the G-20 have dwindled. However, some of the key steps towards crisis resolution in Europe have been brokered at G-20 summits — such as European Central Bank chief Mario Draghi widening the ECB’s mandate a few weeks after the June 2012 summit in Los Cabos, where President Barack Obama had expressed his frustration for the deadlock and urged European leaders, notably Angela Merkel, to resolve the euro crisis.
To some extent, in Antalya, the G-20 has reconfirmed its role as the world’s crisis committee. The G-20 is no longer just the main forum for global economic and financial matters; a wide range of international issues, from climate change to food security, have found space on its agenda and are now part of the direct or indirect consultations. So how can China as the incoming chair ensure that the G-20 builds on this wider role to stay relevant?
First, the annual summit should be turned into an opportunity for leaders to discuss their main concerns, even those that have not yet turned into a crisis, and to focus their conversation on short-term risks while leaving long-term solutions and adjustments to their teams. In other words, at the leaders’ level, the G-20 should hold the role of facilitating dialogue among reluctant interlocutors.
Second, the G-20 agenda needs to connect all the dots of an increasingly complex world. As financial crises spread across borders through the banking and financial systems, so too are humanitarian displacements and income inequalities sources of cross-border tensions and disruptions. It was certainly refreshing to see this year’s communiqué stress “the risk to social cohesion and the well-being of our citizens” — not just laud the sheer impact of economic growth. Equally, when the same communiqué underscores “unemployment, underemployment and informal jobs,” then the G-20 need to make a further step and recognize that lack of decent jobs is not just a drag on the economy but can a huge social impact, especially on disenfranchised young people.
Finally, the G-20 needs to develop the economic and financial agenda into a framework that includes foreign-policy concerns and implications. A strong, sustainable, and balanced world economy — as described in the G-20 Pittsburgh growth agenda — is critical for a safe and peaceful world. But growth has to be inclusive and provide decent opportunities for all. Stark inequalities and security threats have resulted in the economic and practical displacement of tens of millions of people. Coupled with malaise in many advanced economies — again, epitomized by mediocre growth and limited job opportunities — this has created a breeding ground for intolerance and hatred. Meanwhile, a renewed war on terror and the threat of barriers to people and goods across Europe is at odds with the G-20’s pledge to promote the multilateral trading system.
By linking key economic issues to the broader security agenda — both domestically and internationally — the G-20, along with continuing to promote coordinated economic and financial policies, could help member states to formulate a more effective foreign policy. It remains to be see, however, whether China pushes for this wider role.
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