How is the G20 shaping up as the new global steering committee?

The G20 summit takes place in Seoul today and tomorrow, the first such gathering in a non-G8 country. I’ve been G20following the G20 process from a distance and it’s fascinating – here’s a few reflections.

The moment: the financial crisis of 2008/9 saw the G8 publicly hand over the reins of international coordination to the G20. What happens next? Will it become a kind of global steering committee (which may not be good news if you’re one of the G172 countries not in the room), or just another piece of an increasingly fragmented international jigsaw of power? My money is on the latter – it will become an essential player, but will try and limit its remit to its original area of comparative advantage, the international financial system. There will be a battle to insert new issues onto the agenda (as there was with the G8), but also fears that that could weaken its impact and undermine other parts of the multilateral system (like the UN).

How the G20 works: According to a recent ODI talk by Shriti Vadera, a former UK Minister, and now an advisor to the Korean G20 Presidency, the G20 is more disciplined, internally democratic and more accountable than the G8. The whole membership, rather than just the Chair of the next meeting,  decides the agenda, and any action agreed must have a name and deadline for implementation. If the action is not carried out, it must go back to the next G20 Foreign Ministers meeting for scrutiny. The result is a multi-year action plan attached to the communiqué with names, deadlines and report-backs. (Wonder how they will ensure that all the un-implemented promises don’t accumulate as time goes on into a litany of failure attached to each summit outcome.)

Development Agenda: While the most contentious debate in Seoul is likely to be over China’s currency and American quantitative, one of the big achievements of the Korean presidency has been to make development a core part of the G20 agenda (see, it’s already expanding beyond finance!). There will be a permanent Expert Group on development issues, which has identified nine ‘pillars’ for discussion: infrastructure; private investment and job creation; human resources development; trade; financial inclusion; growth with resilience; food security; governance and knowledge sharing. This is a really interesting list, with little resemblance to the Washington Consensus (eg no mention of liberalization), and rejecting a one size fits all recipe for what the Koreans trendily call a ‘dynamic iPhone model’ – a range of different development apps for every situation. But the list also has some big absences – it claims to be based on the successful experience of Korea, but a neoliberal government has airbushed out the industrial policy (including regulation of foreign investment) and land reform that were crucial to Korea’s take off. See Ha-Joon Chang in the Guardian for more on this.

In terms of process, the G20 isn’t as exclusive as it looks. Vadera pointed out that NEPAD and the African Union have been represented at every G20 summit to date, and thinks that will be institutionalised (‘There will always be two Africans in addition to South Africa’). Like most ‘G’ groups, the numbers at the table are flexible, and hardly ever amount to 20…..

Wider Impacts on Global Governance: When a new international forum appears on the scene, there is inevitably an adjustment process as responsibilities and agenda items migrate to and fro and then settle down. The G20 has to find its place alongside the G8, UN, WTO and a plethora of other lower profile international institutions. Overall, as the international community tries to provide some global governance without global government, the G20 seems another step on the journey from a system of hard institutions and binding treaties to a messier ‘soft power’ world of networks, consensus and peer pressure.

That process of readjustment is bound to create winners and losers, both in terms of actors and issues. In this latest exercise, issues like growth and investment seem to be getting a boost, but on climate change, the G20 is likely to bat the ball back to the UN, while aid will float between OECD, UN and the G8. Nothing wrong with that, except that if the political energy and capital is with the G20, that means even less momentum for progress on climate change and aid.

What’s Next? The G20 presidency passes to France after the Seoul summit, and the French seem very committed to making it work. French officials at another ODI event (I seem to spend my life there) cited reform of the international monetary system, reduction of price volatility and reform of global governance as the three priorities for French presidency. They include innovative forms of finance, such as the Financial Transactions Tax, in that list. Should be interesting.

For more on the summit and the issues, check out the series of posts on the Triple Crisis blog or Oxfam’s Seoul curtain raiser. FT coverage is here, including a dose of well informed pessimism, see Alan Beattie’s weary comparison of the G20 with the paralysed Doha round of trade negotiations. That bad, eh?

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Comments

One Response to “How is the G20 shaping up as the new global steering committee?”
  1. The G20, as much as it is the new club and shining star, is also a thorn in several areas. One, it is still largely unrepresentative of all areas especially developing countries. South Africa cannot be said to represent Africa or even Sub-Saharan Africa. The economic make it is much different. Indonesia cannot accurately represent South East Asia for around the same reasons.

    Two, it acts a a thorn inthe international development and financial sphere. Promises for example on revamping finance or increasing development aid (though both are usually empty promises) challenge the very nature of the IFIs–World Bank and IMF. So who is leading the charge in finance and development now? What then is the role of the IFIs–are they no longer majore players (because of their neoliberal agendas?) Even so, isn’t the G20 still focused on neoliberal tenets?

    Third, following from point one, is that theirs is a G within the G20. So the G8 issort of “dead” but the main tussle lies then between the US, China, Japan and the UK.China most definitely. The rest of the voices may only be echos. Or will form another G–South Africa, Brazil, India….

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