Filed under: Comment | Tags: G20, G8, Gordon Brown, IMF, London Summit, Obama
Andrew F. Cooper CIGI Associate Director and Distinguished Fellow
Gregory Chin CIGI Senior Fellow
What will the G20 London Summit be remembered for? Some observers have argued that it will mark a major turning point in global politics and international governance. Yet, so far it has raised more questions than answers, as energies for a new economic consensus appear drained by old divergences. Will the established G7 be able to rally around the Obama-Brown partnership, and reassert its leadership? Will we see the solidification of a more assertive G5 of emerging economies? Will some countries be able to straddle such a divide if it emerges? Are we seeing a new “coming together” of North and South, or will frustrations from London give rise to a new global South?
Notwithstanding the yeoman work put in by the officials from the G20 in the lead up to the London Summit, there is bound to be fallout if the G8 and the emerging powers cannot reach consensus on a sufficient number of the major issues at the London Summit. The handlers will make sure that some successes are recorded, and a coherent communiqué issued.
Certainly, there will be some recognizable agreements on a host of technical issues, ranging from stronger domestic banking regulations to surveillance of cross-border transactions to increased resources for the International Monetary Fund (IMF) and the Financial Stability Forum (FSF). While, in declaratory terms, there will be strong commitments made against protectionism and an escalation of initiatives on tax havens. There will also be an announcement of some new pool of money for least developed countries to weather the current economic storm.
What is unclear is whether the policy package coming from London will be enough to claim longer-term success, on a couple of criteria. First, as a global economic crisis committee, is to effectively dig the G20 out of global recession and to prevent others such crises. And second – and this is often lost amidst to technicalities – is to make the G20 the ‘summit of summits’, a new concert in which there is greater equality between the quadrants of the globe.
However, if the deeds do not match the words, and things get worse on the ground in the ‘real’ economy, the G20 could be seen as perpetuating the dire economic situation. Certainly, the honeymoon for Barack Obama would be short-lived, similarly Gordon Brown’s political resurrection. The G20 must strive to find a balance between collectively hammering out sweeping and immediate financial regulations and laying the foundation of a global forum more representative of the economic order of tomorrow.
Disclaimer: This blog is solely intended to spur discussion, while the opinions expressed are those of the author(s) and do not necessarily reflect the views of CIGI, Chatham House or their respective Boards of Directors.
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