Nicola Clase is Ambassador of the Swedish Ministry for Foreign Affairs and Associate of the Program on Transatlantic Relations (WCFIA) at Harvard University
The views expressed here are her own
In the last year the Group of Twenty (G20) has rapidly emerged as the premier forum to deal with the global financial and economic crisis. The group has held three summit meetings - all of them in the past ten months. The new body is very much a reflection of the world economy today and accentuates the movement of the centre of economic gravity from the Atlantic region to Asia. The G20 is now widely perceived to have both legitimacy and power to provide collective leadership on international economic cooperation and the G8 is henceforth expected to deal primarily with issues related to global security.
The G20 has quickly been able to fill a vacuum that other international institutions have left as their responses to the financial crisis have turned out to be inadequate. In addition, the rise of the G20 is a stark reminder that traditional forms of international cooperation have not adapted to a more interconnected and rapidly changing world. The bureaucracies of many international organizations offer limited room for maneuver when action is swiftly called upon. But most important, the Obama administration has been a clear champion of the G20 in the last year and has regarded the group as an important new body with legitimacy to discuss and act on critical issues on the global agenda to help support growth and development across the globe.
To understand the emergence of the G20 we need to examine its history. When the G20 was established in 1999 its main purpose was to bring together important industrialized and developing economies to discuss key issues in the global economy. This was an immediate response to the financial crises of the late 1990s, and highlighted the need to ensure that key emerging-market countries were given a seat at the table to participate in global economic discussions. From having been primarily a forum for Finance Ministers and Central Bank Governors the G20 has now turned into an important forum for political leaders. The strength of the G20 comes partly from being perceived to have the power to mobilize support for its policies not only among its own members, but also among countries outside the group and other relevant non-state actors. There is a clear recognition that members of the group are important stakeholders in the global economy. Members represent around 90 per cent of world GNP as well as 80 per cent of world trade. Its members are drawn from all continents and represent two-thirds of the global population. It comprises the seven major industrialized nations - Britain, Canada, France, Italy, Japan, Germany and the United States - and Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey. It also includes the 27-nation European Union. In contrast to many other international organizations such as the OECD and IMF the G20 has a flexible organization with no permanent staff of its own. The chair rotates between member countries on a yearly basis.
The effectiveness of any international body is closely linked with how its key stakeholders view the body. There is little doubt that the U.S. has identified G20 as an ad hoc forum that can promote American values and interests to secure global prosperity. It is also clear that China attaches great significance to G20.
In a complex world with many players, setting the agenda and organizing summit meetings is an important form of power. Subsequently, the U.S. has taken an active role together to ensure that effective action could be taken at the summit meetings. This was clearly illustrated at the G20 summit in London in April 2009. At the summit meeting world leaders – many of them former adversaries - went straight to the root of the matter and after two days of careful negotiations agreed on an agenda for comprehensive and coordinated action to deal with the financial crisis. The U.S. President Barack Obama emphasized that this productive summit could provide the turning point in the pursuit of global economic recovery. Even though it is too soon to form any judgment as to the long term effects of G20 decisions, they did contribute to restore confidence in financial markets and are likely to promote sustainable economic growth in a longer perspective. The scope of the G20 is not only limited to financial issues as became obvious at the most recent summit meeting in Pittsburgh. At the summit climate change was an important topic and the group was able to provide important impetus ahead of the UN Summit in Copenhagen 2009. UN Secretary General Ban Ki-moon argued that “the G20 could be vital for providing climate change finance to help the poorest countries”. The G20 is no doubt a more effective venue to have discussions in, compared with the UNFCC process with some 190 countries at the table. But more importantly all the major emitters of greenhouse gases – China, EU, India, Japan, Russia and the U.S. - are represented in the group. The critical issue is to ensure that a future agreement post-2012 includes the U.S. and China as well as India and that such an agreement is both flexible and far reaching under the principle of “common but differentiated responsibilities”. Whether that will succeed in Copenhagen remains a question mark.
A number of questions are raised when examining the future of the G20. What variables are likely to determine the future success of the G20 and what place should the group have within the global architecture? Here it is important to understand the context in which G20 operates and its place within the system of international institutions. Quite often we make the mistake of thinking that systems and organizations can be seen in isolation from each other, but the G20 is very much part of a larger process where it is working closely with, and reinforcing the work of other institutions such as the U.N. and the International financial institutions (IFIs). However, its geographic composition, economic weight and flexible organization have offered legitimacy and subsequently power to deal with global challenges in a way that other institutions currently have not. World leaders generally have little patience and want to conduct international business effectively. They know that to be effective in a global crisis, several actions must be taken together, in the right order, at the right time and at the right place. Under such circumstances they are less likely to turn to organizations that are primarily concerned about preserving as much as possible of the status quo.
One of the most important questions is whether the G20 should extend its role from mainly issues related to the global economy and address both political and security issues. There is no simple answer to this question. With the composition of G20 the body is no doubt suited to address common challenges that we face in a globalised world. Those who argue for a more political role see the G20 as a healthy injection to traditional international cooperation that is often slow and bureaucratic. A network of political leaders who are able to respond to international crises and plan for future problems are perceived to be more flexible than traditional international institutions. Already now the group has extended the agenda to cover climate change and if a major crisis erupts at the same time as there is a summit meeting we can be quite sure that it will be addressed by leaders attending. However, one can also argue that the reason why G20 has been put forward as a model of efficiency is because it has confined its agenda to issues that are not too contentious. If the new body were to address the Iranian nuclear issue we would quickly see sharp divisions within the group.
Fears raised - not least by members of the G-77 - that the G20 is turning into a substitute for the United Nations are not warranted even if the group were to address security issues. Despite being powerful the G20 simply cannot compete with the United Nations, but rather reinforces and complements its work. There is only one universal body for international cooperation and that is the UN General assembly and the U.N. Security Council has the overall responsibility for international peace and security. However, the U.N. cannot function effectively independent of the major powers that compose it, nor will those nations cede their power and sovereignty to an international institution.
In summary, there is a new role for the G20 in the architecture of world politics. Its will to act to resolve the financial and economic crisis and how to avoid its future repeat has put the G20 at the centre of global economic recovery. In addition it has become an important forum to discuss climate change and is expected to play a major role on issues related to climate change finance. A major factor in the rapidly increased role of the G20 is that the group is perceived to have a more relevant composition than other institutions. But the fact that 85 per cent of the world’s countries are not represented when G20 meets is likely to be a future issue of contention.
In the last year the G20 has provided a model for efficiency and cooperation and is now an established forum for world leaders. Although there is no clear trajectory for the future we have just seen the end of the beginning of a new and more significant role for the G20. At the Pittsburgh summit the British Prime Minister Gordon Brown argued that the new body was offering “more chance of delivering results than anything since the second world war”. This certainly sounds promising. If members live up to their commitments it might also put pressure on other international organizations to become more effective. But above all – and this is important – the G20 highlights the significant shift of economic gravity from the Atlantic region to Asia.
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