THE G-20: A DAMP SQUIB?
"As a direct consequence of the 'Great Recession' of 2008-2009 and the continuing financial instability left in its wake, the G20 has moved into the putative position of premier forum for global economic governance. The immediate impace ofthe G20 as a 'crisis breaker' has been palpable. From the initial leaders' summit in Washington DC (November 2008) to the second in London (April 2009) and the third in Pittsburgh (September 2009), the G20 served as an effective catalyst for generating both big domestic stimulus packages and promises of new resources for the International Monetary Fund (IMF), the World Bank and other multilateral development banks. Between the first two G20 summits nations raised their commitment to spending up to a combined 1.8 per cent GDP. London added the largest pledge in history, over $1 trillion. The collective desire to prevent a repeat of the crisis also produced additional reforms in the international institutional architecture, most notably through the move to a reconfigured Financial Stability Board (FSB). Beyond its immediate role as the primary locus for concerted initiatives on the crisis, the G20 attracts attention as a new form of reordering in global governance."
Andrew F. Cooper. "G20 as an improvised crisis committee and/or a contested 'steering committee' for the world." International Affairs. (May 2010), p. 741.
"After all of the talk of a 'Second Bretton Woods,' by people who should know better like Nicolas Sarkozy and Gordon Brown, it is not surprising that post-facto the entire G20 meeting has aspects of an exploded bicycle pump: something which generates a great deal of noise, but, with almost nothing to show for it. In retrospect it is quite obvious, that the entire 'event', was more of a media circus rather than a productive exercise in crisis management. The real parallel to the meeting, as the prolific if sometimes facile, British expatriate historian, Niall Ferguson reminded us over the week-end, was that pre-eminent exercise in failed economic, crisis-management: the London Economic Conference of 1933."
Charles Giovanni Vanzan Coutinho, "The World Economic Summit: What did it mean and why?" Diplomat of the Future.18 November 2008, in Diplomat of the Future.
The much heralded meeting of the G20 group of leading economies has come and gone in Cannes. The upshot has anyone who has closely followed the prior meetings of the much-talked of grouping is negatory at best. Rather tha taking any measures to deal with the ongoing Eurozone crisis the meeting in essence produced little more than a series of press conferences and questions and answer sessions. In one of which, French President Sarkozy let the world know of his real (and not very favorable) opinion of Israeli Premier Netanyahu 1. Aside from this singular 'accomplishment', I for one do not see anything substantive or even mildly concrete that has resulted from the meeting. With Italian premier Berlusconi's adamant refusal in a press conference to accept that Italia is on the breaking point being perhaps the sine qua non of this state of affairs. In short, if the world economy is to be steered in the correct direction, if the Eurozone is to be 'saved' from the multi-layered crisies in Greece, Italia, Portugal and Spain, than none of this will occur as a result of anything that the G20 grouping does or does not do. Au fond this economic forum is merely the ultimate of talking shops. As the ever insightful German commentator Wolfgan Munchau, noted yesterday:
"The Group of 20 leading nations comprises the most powerful people on the planet. There is a tremendous competition over which countries should, and should not, be represented. Yet last week’s summit proved almost comically irrelevant to the future of the global economy. It was a big mistake to try to push Italy into an International Monetary Fund programme without being able to deliver such an outcome. If you really want to force such a momentous decision, the minimum condition is for leaders to say so openly, and for the European Central Bank to announce that it will no longer support the Italian bond market. But they blinked, and let Silvio Berlusconi once again off the hook. The prime minister’s assertion that Italy had no crisis because the restaurants are full is an appropriate reflection of the intellectual depth seen at such gatherings" 2.
Unless and until the world economic system has a hegemon which is able to function in a consistent and forceful fashion, which currently the world economy lacks, then I for one do not expect anything approaching either a functioning G20 as a 'steering committee' for the world economy, much less one that is able to put into place a new 'Bretton Woods' for the world economy.
1. Geoff Dwyer, Tobias Buck & Hugh Carnegy, "Sarkozy calls Netanyahu 'liar' in remarks to Obama." The Financial Times. 8 November 2011, in www.ft.com.
2. Wolfgang Munchau, "Summitry again proves its own irrelevance." The Financial Times. 7 November 2011, in www.ft.com.