The Group of 20, which brings together countries that account for more than 80 percent of world economic activity, was born in the global financial crisis of 2008. By reaching across the divide between developed and developing countries it created a forum more consistent with the pattern of international relations in the 21st century, and by limiting attendance to a smaller number than the other global multilateral bodies, it sought to escape from the unwieldy inertia of their decision-making processes.
At its early meetings the G-20 did good work. It helped to calm the panic that had swept financial markets following the collapse of Lehman Brothers; it identified some of the remedies needed to avoid repeating the mistakes that had led to the crisis; and it showed that the interdependence of the world could be matched by common purpose and effort.
Its most recent meetings, however, have seen the G-20 drifting without much sense of direction, often hijacked by the ephemeral crises of the moment and tending toward a glorified photo-opportunity.
Now with President Obama elected to a second term of office, and with a new generation of Chinese leaders coming to power, the timing is right for a serious effort to regain for the G-20 its self-bestowed title as the world’s primary coordinating mechanism for economic issues. Any such effort must necessarily address both policies and process.
Clearly much remains to be done to manage the knock-on consequences of the 2008 crisis and to set the world back onto the path of sustainable and balanced economic growth. But the G-20 agenda needs to go wider than that. Efforts to combat man-made climate change have flagged in the age of austerity through which we are passing, but the growth of carbon emissions has not. Regaining some of the lost momentum in the United Nations-led negotiations and perhaps moving toward a single global price for carbon could be a way forward.
Trade policy also urgently needs a shot in the arm. The Doha Round of multilateral trade negotiations remains becalmed, beset by squabbles over agricultural trade. The world may so far have avoided the worst protectionist errors of the 1930s, but it would be unwise to count on that state of grace lasting much longer as mercantilist pressures mount in several of the main countries. Separate free trade areas make some sense, but are now leading to a cacophony of varying trade arrangements when the major players need to set a new course, painful and challenging as that may be.
The G-20 could lead the way out of this impasse by identifying a new basis for freer and fairer world trade, perhaps through sectoral agreements or ones that avoid constraining for the moment the policy choices of the weakest developing countries.
As to process, five years of experience have shown up a number of weaknesses in the G-20 model as it has emerged from a period of improvisation. It’s time for the leaders at their next meeting to commission a review by an eminent practitioner, such as the former president of the World Bank, Robert Zoellick, or by a panel to draw some lessons and to chart the way forward.
There needs to be more continuity, which points toward a troika of chairmanships covering a three-year period. There needs to be a more solid underpinning of the preparations for summit meetings. And the principal members of the G-20 need to reach out to each other through private diplomacy rather than the megaphone variety they have favored in recent years to prepare the way for the compromises at full G-20 meetings without which no grouping of this sort can hope to make progress.
Of course the G-20 has to steer a careful course in making itself more effective. It should constrain its tendency to further expansion beyond the present number, already at 27, but also pay careful attention to ensuring that it remains broadly representative and employs quiet diplomacy to solicit views and ideas more widely.
It cannot and must not usurp the responsibility for taking legally binding decisions that rests with the main global multilateral institutions like the United Nations, the International Monetary Fund and the World Trade Organization.
But it can, both by its scale and its example, help give momentum to decisions in these wider forums and to shape a consensus. A world still shaken by the events of 2008 and at risk of falling back into national introspection desperately needs the sort of collective leadership that the G-20 can provide, but that it has not recently been providing.
Thomas R. Pickering is a former U.S. under secretary of state for political affairs. Lord Hannay is a former British ambassador to the European Union and the United Nations.