The success of the G8 and G20 meetings will depend greatly on the leadership role played by Canada as summit chair, and our skill in navigating the dangerous waters of summitry.
Late this month Canada will host and co-host respectively the G8 and G20 summits of world leaders. The G8 Summit will focus on political and development issues, including ways to improve maternal and child health care in developing countries, which the Prime Minister has made a summit priority. Maternal and child health are central to the Millennium Development Goals established by the United Nations as benchmarks for the world to achieve by 2015. Of the eight goals, maternal health is the one showing the least progress. However, the issue has become mired in controversy over the Conservative government’s refusal to include abortion funding in the summit’s maternal health plan — a decision that has riled many aid groups and some opposition MPs.
Of these two summits, the G20 is clearly the more important. The economic and financial crisis of 2008-09 shook the global economy to its very foundations and we are still living with its aftershocks. To address the initial crisis, the outgoing American president, George W. Bush, convened a meeting of the leaders of the world’s most powerful economies in Washington in November 2008. This was followed by further summits in London (April 2009) and Pittsburgh (September 2009).
The G20, first convened as a club of finance ministers, has evolved into an important forum for world leaders to meet and to discuss and address a wide range of pressing new economic challenges. Four key issues will dominate the G20 Summit agenda in Toronto:
- Promoting economic recovery and growth at a time when there are serious current-account imbalances between surplus and deficit countries, and budgetary deficits in many countries are growing worse, compounded by political instability and uncertainty.
- Banking and other financial regulatory reforms with a focus on how to enhance stability and prevent future destabilizing “excesses.” (Whereas some countries are promoting a large-institutions special tax as a key feature of proposed reforms, other countries, like Canada, wish to focus on regulatory and risk-based changes or enhancements, such as capital reserve requirements.)
- Restoring confidence in the international trade regime by recharging “standstill agreements” to avoid further protectionism and spurring the completion of the stalled Doha Round on trade.
- Addressing the challenges of developing a productive negotiating approach to the problems of climate change in the aftermath of the Copenhagen conference, which was widely seen as a failure in terms of both process and outcomes.
None of these issues is easy and all are proving to be contentious as countries struggle with the continuing political and economic fallout of a global financial and economic crisis that refuses to go away.
It is useful to step back and ask some broader questions about the purpose of these gatherings, the perils that confront world leaders when they get together and the special challenges that host countries, in this case Canada, confront in organizing these meetings.
Summits are largely talkfests or forums for the exchange of views and information among world leaders. But when properly organized they can accomplish a lot more. Through discussion and personal interactions leaders can strengthen the incentives for cooperation and mutual understanding.
Summits are catalysts for action but not places to make new rules. One of the myths about summits, whether they are of the G8 or G20 variety, is that these are gatherings where world leaders make new rules. This myth has been perpetuated by many critics of globalization, especially those on the extreme left, who see something akin to a global conspiracy when leaders get together. But the media are also culpable in hyping the importance of these gatherings in order to make them newsworthy. In reality, summits are largely talkfests or forums for the exchange of views and information among world leaders. But when properly organized they can accomplish a lot more. Through discussion and personal interactions leaders can strengthen the incentives for cooperation and mutual understanding. Summits also provide a critical opportunity for leaders to use their political position and influence to break deadlocks and logjams at the bureaucratic and international institutional levels. The purpose of summits, in the words of the distinguished former British diplomat Nicholas Bayne, is to “concentrate the mind,” “resolve differences” and have a “catalytic effect” on international cooperation.
One of the key challenges for the G20 Summit in Toronto, especially when it comes to the tricky issues of banking and finance, will be to focus on developing key principles for new legislation, regulation and reform while recognizing that one size or approach does not fit all. The development of such principles will be critical in guiding and shaping the work of legislators and regulators like the Financial Stability Board (FSB). G20 leaders also have an important role to play in putting pressure on the FSB and other regulatory bodies tasked with reform to ensure that agreements are reached and that they are properly implemented and monitored. Accepted principles are crucial to developing a coordinated and effective approach that will prevent regulatory arbitrage and other kinds of dysfunctional behaviour on the part of financial institutions.
Keep a tightly focused agenda. Today’s summits are ambitious, elaborate and highly scripted affairs. The summit apparatus and membership has expanded greatly, as we are already seeing with the establishment of the G20 and the fact that it is now normal practice to invite nonmember countries to participate in these gatherings. The G20 Summit in Toronto will be no exception. Summits are preceded by extensive meetings not just of sherpas, but also of key ministerial groupings to whom much of the responsibility for developing agendas and fostering policy innovation on specific issues has devolved. The run-up to both the G8 and G20 summits this year has been preceded by whole series of separate meetings of ministers of finance, foreign affairs, energy, environment, development and so on. There have also been many meetings of various civil society and business leaders in anticipation of these summits, and more will follow.
With so many actors, institutions and interests involved in the preparation of summit agendas, there is a natural temptation to expand the agenda and, in the words of one wag, to “over-decorate the summit Christmas tree.” A successful summit process is one that focuses leaders’ attention and discussion on just a couple of critical issues rather than diluting it with a long list of declarations and initiatives scripted by well intentioned bureaucrats who want to dress up official communiqués for their own purposes. The challenge for G20 leaders in Toronto will be to stay focused on key economic and financial issues and to avoid introducing other extraneous issues of a political nature that divert attention, expose differences of opinion or outlook, or simply clutter an already crowded agenda.
Maintain policy cohesion and unity of purpose. Related to the need to keep agendas tightly focused is the importance of maintaining policy cohesion and unity of purpose, especially among key countries that are participating in the summit. Within the G20, this presents an enormous challenge, especially in the face of mounting differences over regulatory frameworks for financial institutions, banking reform, taxation, exit strategies to unwind the massive stimulus measures many countries recently introduced, currency reform and how to deal with the costs of climate change. The sense of crisis and desire for concerted global action has receded in some countries, while new crises (and new divisions) have emerged elsewhere, notably in the European Union (EU), which is wrestling with the continued fallout of the financial and economic meltdown in Greece that risks spreading to other euro zone members. The nearly $1-trillion rescue package, announced by the EU and the International Monetary Fund after the precipitous decline of global markets in early May, is the equivalent of Washington’s $700-billion bailout of Wall Street in October 2008. As the incentives for cooperation weaken, it will require clear and consistent leadership to move ahead.
The history of the G8 is instructive in this regard. When the first summit of world leaders took place in Rambouillet, France, in November 1975, it was a summit of six — France, Britain, US, Japan and Germany with Italy added at the last minute — that dealt with a narrow range of economic concerns. The summit was convened at the initiative of French President Valéry Giscard d’Estaing to break the deadlock between the United States and Europe and Japan over reform of the international monetary system. The summit also discussed international trade issues and generated a political commitment to resist protectionism and complete the Tokyo Round of trade talks.
The Rambouillet summit, known as “the walk in the woods,” and those that immediately succeeded it had three core objectives: (1) to generate political leadership to resolve pressing economic problems that could not be addressed at the national bureaucratic level; (2) to reconcile the growing tensions of globalization, which were creating frictions at the boundaries of domestic policy and the external environment; and (3) to develop a system of collective management of the international system, recognizing that the United States no longer had the capacity or policy reach to deal with a wide range of global challenges.
These objectives are just as relevant today to the enlarged forum of the G20 as they were more than 30 years ago. The existing machinery of formal international institutions is not well equipped to deal with many of the new and emerging global economic issues where new solutions are required, and it needs reform itself. Political leadership is needed on pressing global economic and financial issues within this enlarged forum of world leaders because there are a wide range of problems that cannot be dealt with at the bureaucratic or national level.
Anticipate the unexpected. Summits are sometimes diverted at the 11th hour by a crisis or a sudden turn of events, which throws months of planning off course and diverts leaders’ attentions. The 2005 Gleneagles summit of G8 leaders was overshadowed by terrorist bombing attacks in London, which occurred early in the morning of the second day of the meeting, forcing the summit’s chair, British Prime Minister Tony Blair, to return to London to deal with the crisis. The 2008 Hokkaido Toyako summit in Japan took place against a backdrop of rapidly rising oil prices and the looming spectre of a global recession. When Italy hosted G8 leaders in 2009, the summit was initially supposed to take place in the Sardinian seaside city of La Maddalena. But it was moved at the last minute to L’Aquila in Abruzzo province by the summit’s host, Prime Minister Silvio Berlusconi, in an effort to redistribute disaster funds after a devastating earthquake had levelled much of the city, leaving many of its victims homeless. The shift in venue created a logistical nightmare and the ensuing political circus diverted much of the media’s and public’s attention from the actual meeting itself.
Those organizing summits of world leaders have to anticipate the unexpected. Or to quote Donald Rumsfeld, former secretary of defence in the Bush administration, “There are known knowns; there are things we know. We know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know.” Good summit planning anticipates the risks and uncertainties associated with all three of these unexpected elements.
This summit will followed in November by another summit of the 20 in Seoul. It is critical for Canada and Korea to work closely together to ensure that summit agendas are complementary and mutually reinforcing and, above all, that there is continued momentum from one summit to the next. Fortunately, Canada and Korea enjoy close and strong political and diplomatic relations and have been working closely together.
Ensure that there is proper follow-up and follow-through. The recent history of G8 summitry has been largely one of unfulfilled promises and commitments. As John Kirton, a careful academic scrutinizer of summits, has noted, the degree of follow-through on summit declarations and commitments over the years is patchy and the overall track record of generating “collective commitments” that are both honoured and implemented is not particularly stellar. However, there are exceptions: the 2000 Okinawa summit in Japan is a remarkable success story of collective G8 action. During the months that followed that summit, G8 countries took action on virtually all of their total negotiated commitments. Compliance was especially high in the areas of health (notably infectious disease), information technology and trade. Some of this is explained by the fact that key lead countries (Canada, France, Germany and the US) adopted specific issues and took responsibility for moving the policy agenda forward on them. In the past two decades, however, G8 compliance has weakened as summit agendas have become overcrowded, although thematic agenda items — such as development assistance for Africa, which was a priority at the 2002 Kananaskis summit and again at Evian in 2003 and Gleneagles in 2005, has witnessed delivery on some important issues while also seeing the emergence of an important synergistic relationship among some specific economic, political and social agendas.
At the Pittsburgh summit in November 2009, G20 leaders made a series of critical decisions and also put forward an ambitious cooperative agenda that was contained in their Framework for Strong, Sustainable, and Balanced Growth. In that compact, G20 leaders set out a series of medium-term policy objectives and a cooperative process of mutual assessment of these policy frameworks. At the June summit, G20 leaders will have to demonstrate that they are delivering on their earlier commitments. Not only does the credibility of the summit process depend on the delivery of these commitments, but the public will be looking for coordinated action and early, specific and beneficial results. There is always a temptation, as the sometimes sorry history of the G8 attests, for leaders to wiggle out of their previous commitments and previous lofty declarations by developing new and ever more ambitious agendas and building up expectations by promising even more. For the Toronto meeting, however, “less is more” and the entire credibility of the G20 Summit process will hinge on its ability to produce some early wins that demonstrate that international cooperation in this new forum is working and producing concrete results.
Ensure a smooth handoff. Canada is the co-host with Korea of the Toronto summit in June. This summit will be followed in November by another summit of the 20 in Seoul. It is critical for Canada and Korea to work closely together to ensure that summit agendas are complementary and mutually reinforcing, and, above all, that there is continued momentum from one summit to the next. Fortunately, Canada and Korea enjoy close and strong political and diplomatic relations and have been working closely together. These ties will be crucial to ensuring the continued and future success of the G20.
The year 2010 will be make-or-break for the G20 and a critical year for global economic recovery. Canada has a key role to play as host of the G8/G20 summits. It will have to navigate the shoals of summitry especially carefully.