April 2, 2009

G20 - relevant?

Is the G20 a relevant entity? First off, of whom does the G20 consist? Alphabetically; Argentina , Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States. That adds up to 19. The European Union is also represented as the 20th entity. The G20 represents a significant portion of the globe both geographically and economically. Combined it represents 85% of the earth's GNP. From those perspectives, it's certainly relevant.

But what are the objectives of of the G20? According to Wikipedia,

The G-20 is a forum for cooperation and consultation on matters pertaining to
the international financial system. It studies, reviews, and promotes discussion
among key industrial and emerging market countries of policy issues pertaining
to the promotion of international financial stability, and seeks to address
issues that go beyond the responsibilities of any one organization.

That's all well and good, but U.K. new source The Guardian has reported that things seem to already be dividing into camps with differing agendas;

Angela Merkel, the German ­chancellor, and Nicolas Sarkozy, the French ­president, will throw down the gauntlet today by staging a joint press conference in ­London demanding the G20 summit usher in a new era of global regulation of banks, ­executive bonuses, hedge funds and offshore tax havens.

In what will be seen as a challenge to Obama, they will also insist nobody at the summit should discuss a fresh stimulus package, despite a report from the ­Organisation for Economic Co-operation and Development that "world trade is now in free fall".

Germany and France have of course shifted towards more conservative governments. But that does not mean that they don't have a Euro-centric agenda. Meanwhile, bucking the trend of other countries, the United States has lurched violently leftward. President Obama has met with British Prime Minister Gordon Brown and forged an uneasy alliance. Russia and China, for selfish reasons are looking to move away from the greenback as the world's currency reserve. The point here is that with so many participants and so many views on the challenges of the recession, it's unlikely that a true consensus of opinion is achievable. The G20 risks becoming what the U.N. is in terms of it's value to the United States - negligible.

I can't see Saudi Arabia willingly signing on to a real free trade agreement. I can't see China agreeing to tougher copyright law enforcement, or Russia agreeing to committing funding to the IMF. So why talk to them about things that for the foreseeable future, they will remain intransigent about?

Back in the late 90's the G20 was in fact the G9. Those countries had common economic goals, views and Geo-political interests. What may be of more value to the United States is a re-trenching back to that level of commonality where effective and mutually beneficial decisions can be reached and common approaches to the resolution of problems can be enacted.

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