This year’s G20 Leaders’ Summit in Antalya, Turkey, has produced arguably the broadest agenda of action yet of any G20 gathering. But do the G20’s widening ambitions build on a commensurate increase in capability? Not really.
The Brisbane Summit in 2014 had stuck to the group’s narrow macroeconomic policy origins, making an ambitious though unqualified target of growth acceleration its central promise (accomplish an additional 2 per cent G20 GDP increase by 2018 on top of what the IMF had projected in 2013). This was to be attained via familiar tools—coordinated monetary, financial, labour market, competition and trade policies. About the only novelty was the acknowledgment of the need for drastically higher public infrastructure investment.
The Antalya Summit took place in an overwhelming world political context. The desire to see some intergovernmental solidarity in the face of the ever escalating security and humanitarian crisis of our time did not leave much media appetite to dwell on divisions within the group. Yet the same focus on politics has also distracted attention away from the different economic message of Antalya.
While Antalya reaffirmed the Brisbane pledge of growth acceleration, it described differently what future prosperity should resemble and how it could be accomplished. Pulling more to the left, the Antalya Leaders’ Communiqué (already twice as long as the Brisbane one) called for the type of growth that is “inclusive, job-rich and benefits all segments of our societies”, citing the risk posed by “rising inequalities” to “social cohesion and the well-being of our citizens”. To that end it pledged to lower youth unemployment in G20 countries by 15% by 2025, emphasised for the first time the role of small and medium sized enterprises (SMEs) in fostering inclusiveness, and called for closer cooperation between the G20 and the low income developing countries (LIDCs). The usual references to financial stability, reform of international financial institutions (mainly the IMF), corporate governance reform, multilateral trade deals and anti-corruption were of course present, but the doubled number of agreed documents now also included a statement of policy priorities on labour income share, a skills strategy, and an energy access action plan. This widened focus was the result of many months’ prior work that saw inaugural ministerial meetings in agriculture, energy and tourism as well as a joint meeting of finance and labour ministers (to further underline the inclusiveness dimension). Seen this way, Antalya has expressly called for a kinder, gentler capitalism (à la World Bank since the late 1990s), to be pursued via a sectorally and geographically integrated macro strategy. (Leaving, as well noted, the knotty topic of climate change to the UN conference to commence in Paris later this month.)
There is nothing wrong with this noble call—insofar as we understand that the G20 is merely a sounding board for a somewhat arbitrarily selected group of big countries and international organisations, without any material resource at its disposal to implement actual change. The problem with such an existence is that there is no dependable way of measuring effectiveness: Whatever proposals emerge from this gathering need to be acted upon by governments and international organisations, which, as it so happens, also set the agenda. The troubles of the day (global imbalances, eurozone crisis, the fallout from Syria, weak recovery) always make the cut, as do the sensibilities of the host country (Turkish presidency this year was a good example). Yet in the end the G20’s specific output is always an expression of desire for coordination, not the consequences of actual coordination observable in policy or institutional change. As a result compliance with the group’s yearly commitments varies widely across countries and policy domains.
Consider here the curiously modest progress made in the G20’s core agenda item—international financial regulation. The group was conceived in the aftermath of the Asian financial crisis, and its morphing into a high-profile leaders’ summit from a gathering of finance ministers and central bank governors was a direct response to the global financial crisis of 2007-08. However, eight years and ten summits on (two summits per year were held in 2009 and 2010), all the G20 has to show for in that department is the Financial Stability Board’s (FSB) total-loss-absorbing-capacity (TLAC) standard for global systemically important banks to address the “too-big-to-fail” pathology, announced a week before Antalya. There is no way to know how the G20 contributed to that outcome; for all we know the FSB (or its predecessor the Financial Stability Forum as it was called before the 2009 G20 London Summit) might have ended up devising a similar measure. More important, this is a relatively small change that applies to only part of the sector. Insider reports suggest that since the crash international finance has been back to business as usual already; intense policy debate for the past eight years produced cosmetic changes at best. Even if we credit solely the G20 for all the progress made in the area of international financial regulation to date, the disappointing record of change in that realm inspires little confidence in the G20’s capabilities. If it has largely failed in its core mission, how could the G20 deliver an even more ambitious agenda?
The point is not that the G20 is useless. These summits have served the important function of providing a permanent high-level negotiating table that included some leading powers of the global South. Let us also not forget that change in the absence of total calamity could be a notoriously slow process, in the course of which different voices, such as in Antalya, may indeed have crucial long-term ideational effects. Even then, until such time as we observe material shifts on the ground, unorthodox calls as in Antalya must be treated with caution. Yet give us similar outcries about contemporary capitalism’s social ills in China 2016, Germany 2017 and India 2018 with the global policy ground unambiguously shifting towards attaining fairer resource distribution between as well as within national economies, and we shall get very excited.
Ali Guven is a lecturer in International Relations and International Political Economy at Birkbeck