Nine ways to save the G20
Australia hosts the G20 summit in Brisbane next year. It's a rare chance to set the international agenda and ensure that strong leadership prevents the G20 from sliding into economic irrelevancy.
Having attended numerous G20 meetings and summits since 2008, I can certify that there is little by way of entertainment.
Neither should there be. It is serious business, or should be.
We need an effective G20. This was proven during the financial crisis when the G20 acted in concert and increased the resources of the IMF and development banks by over $1 trillion and implemented a combined $5 trillion fiscal stimulus package.
But increasingly the G20 has come under fire. Countries outside the club say it lacks legitimacy. Others argue that it is becoming irrelevant.
The G20 has achieved much, but it is in danger of losing its way. Agendas are getting too large and unrelated. They are cumulative, growing as the rotating chair adds its priorities to that of the previous chair. But as the saying goes, if everything is a priority, than nothing is a priority.
But the Brisbane summit can and should demonstrate that we do not live in a G-zero world, one where there is a vacuum when it comes to global economic leadership. It should show that economic cooperation between advanced and emerging economies — the type of cooperation that was evident in the G20 summits of 2008 and 2009 which helped prevent a deeper global recession — is alive and well.
The Brisbane summit should show that the G20 is relevant.
So how do we get a meaningful outcome from the 2014 Brisbane G20 leaders’ summit? The first step is to recognise that things have to be done differently in the G20 and to start now.
Drawing on what has worked and what has not in the G20, following are nine lessons that should determine how Australia approaches its role in chairing the G20 and provides a circuit breaker to halt the forums slide into irrelevancy:
1. Leadership matters. To get things done and reach agreement in controversial areas, requires leadership. Australia can do much as chair, but it will need to cultivate champions for reform both inside and outside the forum.
2. Let leaders lead. The inherent strength of the G20 is the involvement of leaders. They can overcome political road blocks. So rather than officials trying to pre-cook everything in advance of a summit, let leaders focus on the most important controversial issues.
3. Leaders do not have to be involved in everything. They simply don’t have the time and political capital is limited. While much of the current G20 agenda can continue at the official level, leaders should focus on the key issues where they can make a difference.
4. Don’t get side tracked. A long and unfocused agenda can serve as a distraction from important developments in the global economy.
5. Action builds credibility. Achieving outcomes in a few key areas is more important than an ambitious agenda that only results in rhetoric.
6. Lack of action loses credibility. The quickest way for the G20 to slide into irrelevancy is to fail to deliver on what has been promised.
7. Make sure the messages are clear. The documentation coming from summits has expanded in line with the agenda. The G20 needs to replace quantity with quality and make sure the messages from summits are clear and succinct. Of course this is easier when there is real progress to report.
8. Targets and timetables can be effective. Timetables for implementing reforms can demonstrate commitment and provide a benchmark to assess progress. But make sure they are realistic and that targets remain relevant when economic circumstances change.
9. ‘It’s the economy stupid’. Given the vulnerabilities that continue to confront the global economy, leaders should focus on the steps needed for achieving strong and sustainable economic and jobs growth.
Is Australia up to the task? Certainly. We take the G20 seriously. Not just because we are at the top table when it comes to economic groupings. But as an open, trading economy we recognise the importance of having an effective and focused G20. But it will take time, effort and political courage. Let’s take up the challenge.
Mike Callaghan is the Director of the G20 Studies Centre at the Lowy Institute for International Policy. He was previously Executive Director (International) in the Australian Treasury & Australia’s G20 Finance Deputy. His Analysis ‘Relaunching the G20’ was released on Wednesday.