Filed under: Analysis | Tags: climate change, economics, G20, Gordon Brown, London Summit, stimulus
Andrew Schrumm CIGI Research Officer
From the London Summit Media Centre
This morning, Chatham House hosted a high-level panel on the G20 London Summit. As both a launch of its new report, New Ideas for the London Summit: Recommendations to the G20 Leaders, and as a public forum on the eve of the major international meeting. Chaired by Chatham House Director Dr. Robin Niblett, the panel included Lord Mark Malloch-Brown, UK prime minister’s G20 special envoy; Dr. Youssef Boutros-Ghali, Egypt’s minister of finance and chairman of the International Monetary and Financial Committee (IMFC); Stephen Roach, Morgan Stanley Asia Director; Dan Price, Sidley Austin Senior Partner for Global Issues; and Dr. Paola Subacchi, Chatham House Research Director of International Economics.
The panel rasied a number of critical questions on the state of the global economy, the nature of the response, and the style of crisis management through the G20 process. The full-length audio of the event is available online at: http://www.chathamhouse.org.uk/events/view/-/id/1105/
Amid high expectations for the G20, the panel acknowledged that there will need to be compromises in both substantive areas and in the process. In his remarks, Lord Malloch-Brown attempted to set expectations for tomorrow’s meetings, by giving insight on the declaration. He noted that there will not be specific agreement on two major items – climate change and a global stimulus benchmark. First, as many participating countries urged that the climate change process continue through the UNFCCC, the G20 should not disrupt the discussions leading in to the major meeting in December at Copenhagen. Second, as many nations are in mid-course of stimulus infusion, a technical judgement was made that the G20 should not promote a standard stimulus rate at a time when most are sorting out the true demands of their domestic economies. Lord Malloch-Brown emphasized, however, that as a peer group the G20 will continue active monitoring and coordination of national economic stimuli, observing and advising one-another on adequate measures to avoid inflation.
These two hesitations emphasize the limitations of the G20, primarily that it is not a legislative body. Any summit declarations must seek compliance first at the national-level after the leaders return home, and second on the international regulatory institutions to employ the G20’s prescriptive measures. With this in mind, Lord Malloch-Brown suggested that the summit declaration will include commitments in a number of areas. First, a strong package on regulation, with broad agreement on enhancement of the Financial Stability Forum (FSF), Basel discussions, and IMF functions. Second, an international emphasis on trade promotion and reduction of protectionist measures. Third, a recognition of stability in poor economies will rely on continued /increased development assistance by industrialized countries to the global South. And forth, a strengthening of the international financial institutions – particularly IMF and World Bank – but with economic support must come reform.
These insights, from a key insider of the G20 process, are telling. Lord Malloch-Brown modestly acknowledged that the world’s economic problems will not be solved in a few hours of meetings, and that progress will have to come over a long period of time. However, he remains optimistic that this phase of international economic diplomacy will mark the ‘beginning of the end’ to the global crisis.
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