In 2008, with the onset of the world financial and economic crisis, Washington hosted the first G20 summit at the level of leaders, who discussed how to overcome the crisis as well as general principles of reforming the global financial institutions in order to prevent such upheavals from recurring in the future.
The G20 was established in 1999 at the level of finance ministers as a response to the 1997−1998 financial crisis in Asia and Russia. The first 10 years of these meetings revealed the need for upgrading the format, since the G8 members were not by far the only states responsible for the stability of the world financial and economic system. The world witnessed nascent economies in Asia, Latin America and Africa achieving rapid advances, something that made the Golden Billion’s behind-the-scenes decision-making on key macroeconomic and financial matters no longer possible. Until the 2008 crisis, however, the G20 remained a subordinate and secondary format, with the G8 holding so-called “guest sessions” involving leaders of key developing nations. Between 2007 and 2009, this crystallized into the Heiligendamm Process.
The Argentine presidency’s priorities
This year’s topic, Building Consensus for Fair and Sustainable Development, suggests a focus on three key issues: the future of work amid a digital revolution, infrastructure for development, and a sustainable food future. But, although the presidency has concentrated precisely on these priorities, it is expected that the participants will pay much attention to the most “contentious” matters like international trade and the role of the WTO, the Paris Agreement on Climate Change and the Global Forum on Steel Excess Capacity.
Quite expectedly, the absolute priority is to relaunch the comprehensive trade arrangement now in effect as a means of cutting short the unfolding trade war between the key parties in international economic relations. A mere truce will not do the trick as was proved by the proceedings at the recent APEC summit that ended, for the first time in history, without a final communique.
The problem here is not only and not so much Donald Trump’s “unpredictability” or the current campaign to block the appointment of judges to the WTO court of appeal (launched, incidentally, by the Obama administration), as the persistent lack of solutions to the basic stumbling blocks in modern trade relations: the Doha round of WTO negotiations has failed to achieve any mutually acceptable understandings; a WTO reform is long overdue; many problems have been referred to regional levels for years; the WTO has no mechanisms to regulate today’s basic economic processes, specifically e-commerce; and so on. But stable economic development cannot be achieved unless the world has a stable international trade system. This is why the G20 has a vested interest in overcoming the current crisis.
Yet another negative “impetus” to discussing the Paris Agreement on Climate Change emerged soon after Trump took office, when he declared that the US might withdraw from the PACC. Today, leaders will at least have to refrain from plunging into even more serious differences on this issue.
A separate agenda item is the further functioning of the G20 Global Forum on Steel Excess Capacity [1], created in keeping with the decisions of the Hangzhou summit in 2016.
Russia at the G20
As was noted earlier, the priorities themselves are aimed at both solving problems and achieving long-term, stable world economic interaction. An issue of crucial importance for Russia amid the continuing buildup of geopolitical turbulence and governments’ disposition for unilateral steps is to consolidate confidence in international trade and financial institutions and to relaunch the international cooperation system based on reciprocal regard for each other’s interests.
A comparison with the 2013 Russian presidency priorities reveals the concurrence of both countries’ international interests and desire for continuity, plus a serious attitude to collectively approved decisions. It was in 2013 that the G20 was for the first time urged not only to pass new decisions and consider new problems at its summits, but also to track progress on earlier agreements that should not be abandoned halfway through. President Mauricio Macri of Argentina has expressed a similar point of view.
G20 discussions on the future of labor markets versus the ongoing digital revolution are consistent with what Russia is doing within the framework of the Digital Economy national project. The important thing is that Argentina has put an emphasis on people and the education system, promoting skills and occupations of the future. The G20 platform should be used to protect consumer rights in new digital economy conditions and to harmonize national standards in this area.
The priority of building infrastructure for economic development is of no less importance for Russia either. This accords with both the domestic needs (greater regional connectivity, development of digital infrastructure, etc.) and its foreign policy effort to bridge the existing infrastructure gap (the New Development Bank, etc.).
Why the G20 will live long
It has been 10 years since the first G20 summit. The format has been preserved and consolidated as a global “economic directorate” of sorts. Although it is always tempting to review its previous decisions and the extent to which they are implemented, or recall that many of these are either mere frameworks or remain on paper like the notorious plan to prevent new protectionist measures, we must not forget that these meetings make it possible to maintain a measure of trust and forestall panic on global markets. And this is the main thing.
With many areas of international cooperation in a decline, multilateral institutions evoke growing distrust as efficient tools ensuring stability of the world economic and political systems. Given the increasing risks, the G20 is the last remaining platform for a constructive discussion of financial and economic issues. It can also pass coordinated, if not ideal, decisions. What is of importance is not to lose this platform. Neither should we slide into using it as yet another tool of confrontation.
[1] It includes 33 countries, G20 as well as the OECD member states with a vested interest in solving this problem. Those countries put together account for over 90% of global steelmaking capacity.
