The G20 at Five: More Technocratic and Less Visionary

While media attention was focussed on Syria, the G20 issued its most detailed communiqué in its five-year history. It includes commitments to work together on a  wide range of issues: strong and sustainable economic growth, unemployment and underemployment (particularly among young people), long-term financing for investment, international trade, cross-border tax evasion and avoidance, financial reforms and reform of financial institutions, development, corruption, energy and climate change, and fiscal sustainability. Its deliverables are the St. Petersburg Action Plan, designed to boost economic activity and create jobs through strong, sustainable and balanced growth; the St. Petersburg Development Outlook, intended to improve food security, financial inclusion, infrastructure, development and domestic resource mobilization; and the G20 Anti-Corruption Action Plan, focussed on combatting domestic and foreign bribery, tackling corruption in high-risk sectors, and strengthening international cooperation and transparency in the fight against corruption.

On its face, the St. Petersburg Declaration appears to be an ambitious document, one clearly the product of considerable, careful preparation by officials over the past several months. Given the preoccupation of leaders at the meeting with the Syrian situation, however, how much attention did they actually pay to the details contained in this communiqué—and, most importantly, will all of its commitments be implemented?

As the G20 grows in importance, attention should be paid to its institutional design in order to make it more effective and credible in the future.

Looking at it more carefully, however, many of these commitments have been made before, although not in as much detail, and some important ones seem to have been softened or deleted. The language is more technocratic and less visionary than in previous G20 declarations. The 2009 Pittsburgh Declaration was undoubtedly the high point as a bold, visionary document laying out a road map for the future. It included the challenging but important goal of “[m]odernizing the international financial institutions and global development architecture…essential to our efforts to promote global financial stability, foster sustainable development, and lift the lives of the poorest.” At Cannes in 2011, clean energy, green growth and sustainable energy were high on the leaders’ list of priorities. They committed to the success of the Rio+20 Conference and the Durban Conference on Climate Change, and stated that “financing the fight against climate change was one of their top priorities.” At that meeting, they also supported a strengthening of the World Trade Organization (WTO), recognizing the need to develop new ways of conducting negotiations in order to conclude the Doha Round.

On trade and climate change, the St. Petersburg Declaration lacks the vision and commitment expressed in these past declarations. It admonishes members to try to reach an agreement on trade facilitation at the upcoming December WTO Ministerial Conference in Bali, and  recognizes that “transparency is the cornerstone of the multilateral trading system”; however, it says nothing on strengthening the WTO in order to conclude the Doha Round. Regional trade agreements and the technical work of international organizations on trade information and transparency receive more attention than fundamental trade issues facing the WTO and the world economy. Although it refers to various efforts at cooperation on energy, and expresses wistful hope for success on climate change negotiations, there is not much in the way of real commitment to multilateral cooperation on energy and climate change.

The agenda for this G20 meeting was broader than some of the previous meetings. It extended beyond traditional areas of international finance, financial reform and development because sustainable economic growth and issues such as development, sustainable energy, trade, tax avoidance and the fight against corruption are essential to a strong global recovery as the world economy emerges out of the financial crisis.

The G20 has reached a turning point at its fifth anniversary. It is now time to reflect on its purpose and objectives, to determine whether it is meeting those objectives and what kind of forum it will be in the future. The declaration that emerged from the St. Petersburg meeting takes a different tack than previous communiqués—one far more detailed and more of a report card than a visionary statement of principles and commitments.

At this point, is it worth considering whether a secretariat or some other mechanism is necessary to coordinate the activities of the various G20 groups and committees that provide input into the G20 process, and to liaise formally with the international organizations. More importantly, should implementation be monitored in a systematic way by a central body that reports to the G20 directly, rather than through committees of national ministers and officials? These important institutional questions need to be addressed as international cooperation on matters relating to the functioning of the global economy becomes more complex and challenging. As the G20 grows in importance, attention should be paid to its institutional design in order to make it more effective and credible in the future.

This is a modified version of a commentary published in the CIGI Blog on September 9, 2013.

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