The G20 has achieved a great deal, beyond what is widely acknowledged as its high point at the London G20 leaders’ summit, which President Obama described as “a turning point in our pursuit of global economic recovery.” But criticism is growing. It is being described as little more than a talk shop.
Do we still need the G20?
We live in an increasingly interconnected world. We need a forum that brings together the leaders of the major advanced and emerging economies. But we need more than a talk shop. We need a forum where leaders can deal with some of the most pressing challenges confronting the global economy. This is the potential that the G20 offers.
But if the G20 is to live up to its potential, it has to confront the forces that could see it slide into irrelevancy. The forum has to build on what has worked, and avoid what has not. In this regard there are nine lessons from the G20 summits to date.
1. Recognize the importance of leadership. All forums require leaders, the G20 is no exception. It took the leadership of George Bush to call leaders together in Washington in 2008. And the British Prime Minister, Gordon Brown, enthusiastically chaired the London summit. But while the chair can achieve much, it will need to cultivate champions for reform both within and outside the forum to get things done.
2. The G20 is above all a political forum. Its strength and effectiveness comes from the highest level of political involvement. So let the leaders lead. Instead of officials trying to pre-cook everything in advance of the summit, let the leaders focus on the most important issues where an agreement will signal real progress.
3. Leaders do not have to be involved in everything on the G20 agenda. Their time is limited. Hence the challenge is to develop a tightly targeted leader’s agenda for each summit.
4. Avoid being side tracked by too much detail or by unnecessary issues. A danger of a long, unfocused agenda is that it can serve as a distraction from important developments in the global economy.
5. Those leaders’ summits perceived to have been the most successful were the ones that were seen to take real action. For example, there was the commitment at the London summit to increase the resources of the IMF and development banks by over $1 trillion dollars.
6. What does undermine credibility is a lack of action. A prime example has been the repeated but unrealized commitments by leaders to complete the Doha Development Round.
7. Make sure the messages are clear. Just as the agenda has increased, the amount of documentation coming from G20 summits has grown enormously. It is hard to determine what the main message is. The G20 needs to replace quantity with quality and spend more time in ensuring that clear and succinct messages emerge from summits. But this is always easier if there is something to say, if the summit has really made progress on some key issues.
8. Targets and timetables can be effective in demonstrating that leaders are committed and also a benchmark to measure progress, but care needs to be taken. The timetables have to be realistic, and changes in economic circumstances have to be taken into account. A major outcome from the 2010 Toronto summit was the commitment by members to reduce public debt and deficits by specific dates. But with ongoing weakness in the global economy, these timetables are no longer appropriate for all countries.
9. Keep the focus on achieving a sustainable recovery in the global economy. The G20 declared victory too soon when at the Pittsburgh summit leaders said “our countries agreed to do everything necessary to ensure the recovery” and “it worked.”
To be effective, the G20 must maintain its focus and not lose its inherent strength, which is the engagement of leaders. But the agenda continues to grow each year as the rotating chair adds its priorities to what it inherits from previous chairs.
There has to be a collective agreement by G20 members that there needs to be a break from the past. There has to be a circuit breaker. The G20 needs to be relaunched. This is a challenge that Australia should take up when it chairs the G20 in 2014.
Mike Callaghan is the Director of the G20 Studies Centre at the Lowy Institute for International Policy. His Analysis "Relaunching the G20" has been released by the Lowy Institute.