Author: Wendy Dobson, University of Toronto

The Toronto meeting of G20 leaders on June 26-27 was a stop on the road to Seoul. Leaders took a few significant steps forward but not enough has yet been accomplished to avoid another crisis and there is danger of renewed complacency. Much, therefore, is riding on the work that leads to decisions in Seoul.

Among its accomplishments, the Toronto meeting was a deadline that elicited progress on the key objective of restoring strong, sustainable, and balanced world growth. Read the rest of this entry »

Author: Pradumna B. Rana, RSIS, Singapore

The G20 summit is a process that is evolving and no one can predict exactly where it will end up. The group was self appointed the ‘premier forum for international economic cooperation’ and there remain important questions related to membership and agenda that need to be addressed. In Pittsburgh, US President Barack Obama announced that the G20 would replace the G8. Two G20 summits are planned for this year — in Toronto and Seoul in November. While the Toronto summit will take stock of the implementation of exit strategies from the expansionary macroeconomic policies, the Seoul summit has selected two additional longer term issues for discussion — financial safety nets to better insulate emerging markets from systemic instability, and actions to close the development gap, especially for the poorest. Issues related to climate change could also be addressed at the G20 summit.

So how should Asia respond? Read the rest of this entry »

Author: Wendy Dobson, University of Toronto

The G20 meeting this weekend in Canada has a heavy agenda and high expectations. Leaders face a serious challenge to demonstrate determination to follow through on the September 2009 Pittsburgh summit’s framework for strong, sustainable and balanced growth.

Prior to that June 26-27 meeting Canada also chose to host a G8 side show. Its challenge is to avoid any appearance of being an executive committee meeting before the G20. Read the rest of this entry »

Author: Maria Wihardja, CSIS, Jakarta

In the upcoming G20 summit in Seoul, East Asian Pacific countries must be careful not to focus narrowly on their own regional institutions and issues. Instead, they must aim to bring momentum to the global economic recovery and reforms. The agenda must resist being sidelined by current European concerns, and maintain a focus on Asian economies as they move beyond the financial crisis.

The formation of the G20 is a delayed recognition of the shifting of the global economy to the East, especially with the Chinese economy’s emerging power. The cooperation of these economies represents an opportunity for significant global growth. Read the rest of this entry »

Guest Author: Il SaKong, Chair Korea Summit Coordinating Committee

Since its inception in the mid-1970s, the G7 acted as if it were the informal global steering committee for global economic and financial issues. But over the last couple of decades many considered the G7 lacked political legitimacy because it did not include the major emerging players in the world economy. These critics rightly claimed that although the G7 was only an informal global steering committee, it needed to reflect the shift in global economic power that has taken place over recent decades.

Last November, in the midst of the unprecedented global financial and economic crisis, the G20 Summit—instead of G7—was held in Washington. Read the rest of this entry »

Guest Author: Scott Snyder, Asia Foundation

As global leaders convened in Pittsburgh to address the global economic crisis for the third time in less than a year, there is cause for both optimism and a heavy sense of responsibility to sustain early signs of a global recovery.

Follow-up measures from Pittsburgh within the G20 will fall primarily to South Korea as the chair and host of G20 meetings during 2010 shifts from London to Seoul. This development will mark a significant symbolic turning point in global governance, as South Korea will be the first non-G8 country to hold those responsibilities Read the rest of this entry »

Guest Author, Rajendra Abhyankar, Asia Foundation

For a country where job-creation has always been more important than wealth creation, the idea of a jobless recovery just does not exist. To meet the needs of its vast population, 65 per cent of whom are below age 35, the government is under constant pressure to create (literally) new jobs and succeeds by bringing in 12 to 15 million jobs each year. Yet, India is running to standstill. Hence the crucial importance of the National Rural Employment Guarantee Scheme (NREGA) that assures 100 days employment to every able-bodied person in the countryside. With the economic forecast looking up, the scheme has just been restructured to cover a larger segment of the population.

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Guest Author: Nina Hachigian, Center for American Progress & Bruce Jones, Brookings Institution

The agenda for this week’s meeting of the Group of 20 developed and developing nations is full, but when the leaders of all these countries sit down in Pittsburgh to discuss banking regulation, energy and poverty alleviation, one question will not be on the table—the question of who should be at the table in the first place.

Deciding which nations will sit at the global decision-making table is more politically charged than whether to tie bankers’ bonuses to the risks they take or whether countries can and should stop subsidizing fossil fuel consumption. Resolving which nations will try to forge consensus on these and other critical questions, however, is key to determining whether any resolving actually gets done.

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Author: Jeffrey Frankel, Harvard

National leaders are meeting at the United Nations in New York to discuss climate change negotiations. Talks are continuing at the G-20 meeting in Pittsburgh. But hopes look very bleak for progress sufficient to produce at Copenhagen in December a successor treaty to the Kyoto Protocol. The biggest roadblock is the familiar game of ‘After you, Alphonse.’ The United States will not accept quantitative emission targets unless China, India and other developing countries do the same, at the same time. But the developing countries will not cut their emissions below the Business as Usual path (BAU) unless the rich countries go first.

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Author: Andrew Elek

Last month, Arvind Subramanian published a valuable piece in the Business Standard, New Delhi in which he recommends that the G20 should promote increased international financing of international public goods, such as technology to help cope with climate change or raise agricultural productivity. He also recommends that the World Bank should devote a considerably larger share of its financing to this purpose.

The first of these deserves strong support, but it is not certain that reforming the World Bank is the most appropriate means of enhancing the funding of international public goods.

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Guest Author: Arvind Subramanian, Peterson Institute for International Economics

In the run-up to the G-20 Summit in London in April, China created a frisson of excitement by pushing for the use of Special Drawing Rights (SDRs) as an alternative to the dollar as a global economic currency. To be sure, China’s demarche was self-serving. It is also true that when China now talks, the world must listen. But the Chinese proposal was taken seriously because it had enough objective appeal and systemic relevance.

In all the discussions about the reform of the international economic architecture and the G-20 process, India’s predominant concern has been with getting a seat at the table. This desire for influence is appropriate and attaining it is long overdue particularly since existing international arrangements, especially at the IMF and World Bank, are outdated and inequitable. But acquiring influence cannot become an end in itself. ‘Influence for what’ is a question that India must continually ask.

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Author: Shinji Takagi

The G-20 Summit of April 2009 called for a reform of the International Monetary Fund (IMF). Augmenting the IMF’s resources and making its lending more friendly to potential borrowers hit hard by the global economic crisis has been the easy part. More difficult to reform is the governance of the institution, which among others involves a reallocation of voices among the membership and an overhaul of its governance framework. Nevertheless, the Summit committed ‘to implementing the package of IMF quota and voice reforms agreed in April 2008 and call on the IMF to complete the next review of quotas by January 2011’ and agreed to give ‘consultation to greater involvement of the Fund’s Governors in providing strategic direction to the IMF.’

Increasing the voice and representation of new economic powers is important if the IMF is to maintain or restore relevance and legitimacy. In this context, what has been achieved in the 2006 and 2008 quota reforms is disappointing: the weight of the Asia-Pacific region has risen only by about 1.5 per cent, while that of Europe has hardly changed. The G-20 Summit called for an acceleration of the next round of quota reform but, given the nature of the voice reform as a zero-sum game, the pace of reform can only be incremental.

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Guest Author: Brad Glosserman

According to conventional wisdom, the global economic crisis is accelerating the transfer of power and influence from the West to Asia. The United States has been particularly hard hit by the downturn and America’s loss is China’s gain.

The Group of Eight industrialized nations, the traditional locus of power, has been fatally wounded. In the future, goes the argument, the most important forum will be the Group of 20.

If this analysis is correct, it suggests that another fundamental shift in global economic activity is due. Western demand will no longer serve as the primary engine of growth. Instead, Asian nations will abandon export-oriented economic models and embrace domestic consumption to generate growth. That will put in train another set of ‘knock-on effects,’ the most important being the development of social safety nets that no longer oblige their citizens to save so much of their income and instead encourage them to consume.

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Authors: Hadi Soesastro and Peter Drysdale

Now that the dust has begun to settle, it’s time to assess British PM, Gordon Brown’s claim that the G20 Summit saw the creation of a new world economic order.

This was a remarkable event. In less than a year the leaders of a representative group of twenty the largest or most important economies in the world met for a second time to address the challenges of global economic crisis. They and their advisers have crafted a coherent set of strategies to turn the international economy around and to deal with the structural frailties that sent world markets into free-fall. 

The crisis bears sobering witness to the interconnectedness of the global economy today. Open trade and open capital markets and the break-neck speed of the flow of ideas and technologies have delivered huge benefits through globalisation and lifted millions of people, especially in Asia, from poverty to relative prosperity on a scale of which there is no historical precedent. But, as we now see more clearly, this was also a global economy fraught with system risk, without institutions and structures of governance that gave proper attention to the global impact and repercussion of national policy strategies and market failures.

There are three major achievements out of London.

Read the rest of this entry »

Guest Author: Lex Rieffel

Five Asian countries will participate in the G20 London Summit: China, India, Indonesia, Japan, and South Korea. The United States will undoubtedly be the most important player in the meeting, but there is a strong case to be made for Asia being the second most important. A deal for the IMF is likely to be extremely difficult. But a deal without the full support of Japan, China, and India will probably not provide the fillip to confidence that the London Summit must deliver to put the world firmly on the road to recovery.

In this article, I look at Asia’s perspective on the summit meeting and the global financial crisis, noting the core issues surrounding agreement on increasing resources for the IMF.

This article is part of the Brookings Institution’s series on the G20, entitled ‘The G-20 London Summit 2009: Recommendations for Global Policy Coordination‘, and may be found here.