As officials from the world's key economic powers get ready for the seventh G-20 summit in Los Cabos, Mexico in June, we can ask whether they have done a good job of nurturing the relatively young diplomatic forum through its formative years. Has the G-20 developed into a competent body to deal with international challenges, or does it merely coast along with perfunctory meetings while the global economy remains on the edge of the cliff?
It's all too easy to judge the G-20 harshly, especially if the group is measured against its early successes responding to the 2008-09 financial meltdown. While there is plenty of room for G-20 nations to raise the level of their diplomatic game, the forum is carving out an important niche in the international system. The key is to understand what that niche is.
Any fair assessment must begin by setting aside some of the false choices that have fed cynicism toward the G-20: a focus on short- versus long-term issues; a narrow agenda confined to economic matters or a broader remit; and whether the group is a crisis-driven fire brigade or a management committee for the global economy. The proper yardstick for the G-20 is its ability to enhance economic cooperation, build understanding between rising and established powers, better synch up international efforts across separate policy fields and induce progress in other multilateral forums.
The political leaders in this club of the world's major economies are in a good position to tackle a wide range of challenges mainly because different items on the international agenda vary in their "degree of difficulty." Contentious issues like rebalancing export- and consumption-based economies must be patiently hashed out, while others such as anti-corruption measures have ripened so that they just need a nudge from the top political level. This diversity of issues was driven home when the host organizers of the upcoming summit invited think tank experts to Mexico City to discuss the emerging summit agenda.
At the top of the list was the G-20's core mandate to keep the global economy growing. At their last meeting in February, G-20 finance ministers and central bankers met and pressed their Eurozone colleagues for a more decisive response to sovereign debt that threatens the fragile global economic recovery. The recent compromise reached by Eurozone finance ministers on the size of the firewall to uphold weaker economies and stop contagion falls, once again, below expectations.
On financial matters, the Los Cabos summit will continue the G-20's push for tighter regulation of high finance, while also discussing how to link ordinary people to credit and banking, which is vital for economic development and jobs. To bolster food security against the threat of price spikes that can be devastating for the world's poorest, the G-20 has been focusing on steps to make commodity markets more transparent and less driven by speculation. But a broader and sharper approach to issues of resource scarcity is needed to set growth on a sustainable path. Given President Calderon's interest in green growth, a relatively new issue for the G-20, his team is weighing what would be the most constructive focus. It is important to ensure the G20's discussion of green growth is a good complement to the United Nations Rio+20 conference on sustainable development taking place immediately after the Los Cabos summit.
Indeed, one of the threads woven throughout the G-20 agenda is the link to other multilateral venues more deeply involved in their respective spheres. Odd as it might seem, the informal character of the G-20 - its lack of defined authority or rules - is actually a source of strength. With the advantage of having world leaders' personal involvement, the G-20 can focus on providing top-level impetus and forging consensus on sensitive issues. For this very reason, the Obama administration finds the G-20 extremely useful. An administration official recently explained their approach as "a G-20 trade policy with other multilateral bodies: export political will and put barriers up against dysfunction." It is no coincidence, then, that when Mexico convened the first-ever meeting of G-20 foreign ministers, they addressed gaps in the broader multilateral system requiring political attention and institutional innovation. But the latter will only come along if established and emerging powers work out a better balance between responsibility and representation.
One of the most striking features of international politics these days is the modest level of international cooperation in the face of epochal challenges, such as balanced economic growth, nuclear nonproliferation and climate change. The G-20 is in a good position to narrow this gap - not as a replacement for traditional multilateral bodies, but as an adjunct. There will still be a need for formal treaties, diplomatic councils and other institutionalized forms of cooperation, but the G-20 is a unique platform for key nations to develop compromise solutions to shared problems, thus bridging their differences on sensitive issues. In today's interconnected world, future peace and prosperity will hinge on rising and established powers' ability to set new terms for their relationships.
