The November 2011 Group of Twenty (G-20) meeting in Cannes has unfortunately acquired a sense of drama similar to that of the first two G-20 meetings: the Washington November 2008 meeting and the London April 2009 meeting. At that time, the world economy and the global financial sector were facing a real emergency. For the next meetings, the sense of urgency had diminished, as the massive Keynesian support policies prevented a global depression and allowed the beginnings of a recovery. It is that recovery that now is in danger by the mounting sovereign debt worries in the advanced economies, the persistent high unemployment, and the threatening dimensions assumed by the debt crisis in Europe. As has become tradition, the Brookings Global Economy and Development Program has asked some of our scholars to provide their thoughts on the challenges faced by world leaders as they gather in Cannes on November 3–4.

As usual, the essays are brief and tackle different aspects of the overall challenge facing the G-20. I hope they will provide useful input into the debate that will take place and on what the summit can achieve.

      

 

 

On November 11-12, heads of state and government of the Group of Twenty (G-20) will meet for the fifth time since they started convening two years ago to deal with the global financial crisis and the ongoing recovery. This time around, G-20 leaders will meet in Seoul, Korea. It will be the first time that a non-G8 and newly-industrialized country hosts a G-20 summit, demonstrating the increased representation of new political and economic actors in international policy coordination and global governance.

Yet, the recent policy debates and media reports have focused on concerns over impending currency wars in the form of competitive devaluations and unilateral policies. Many of these debates and reports seemed to cast pessimism and cynicism over the G-20’s ability to effectively pursue international policy coordination and economic cooperation. However, the recent agreements made by G-20 finance ministers during their late-October meeting in Gyeongju seem to have brought back some optimism and hope for progress. Nevertheless, it still remains to be seen how the outcomes of the upcoming Seoul Summit will impact the future of the G-20 to effectively continue as the “premier forum for international economic cooperation.”

Joining the debate on the challenges and expectations for the G-20 Seoul Summit, experts from the Brookings Global Economy and Development program explore a range of critical issues and offer policy recommendations for G-20 leaders to consider in order to strengthen the global economic recovery.

      

 

 

On June 26, heads of state and government of the Group of 20 (G-20) will meet in Toronto, which is the fourth time they will convene since the start of the global economic crisis. At last September’s G-20 Summit in Pittsburgh, leaders seemed cautious yet fairly optimistic and confident that the worst of the crisis was behind them and that the world economy was on the path toward recovery. During Pittsburgh, leaders focused on the global coordinated actions needed to ensure a full economic recovery that would deliver sustainable, long-term and balanced global growth.

However, before the economic recovery could be fully entrenched, the global economy was hit with yet another setback in the form of the European debt crisis. Therefore, almost a year later, the question still remains: is the world economy really recovering? Or are we beginning to see a relapse?

Experts from the Brookings Global Economy and Development program examine this question, analyze the current economic climate, and provide recommendations on how the G-20 should continue to serve as the “premier forum for international economic cooperation.”

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Articles

Back From the Brink, but a Tough Road Still Ahead for the G-20 » (PDF)
Eswar Prasad takes the pulse of the world economy and tracks the recovery in G-20 economies by looking at a set of real economy, financial and confidence indicators. He discusses the critical policies and reforms that G-20 leaders must take into consideration in Toronto in order to put the world economy back on track toward balanced, robust and sustainable growth.

The G-20 Summit Assesses the European Crisis: Finding the Way From Toronto »  (PDF)
Domenico Lombardi assesses how the ongoing European debt crisis will impact the agenda and discussions in Toronto. He argues that the European Union—the largest economy in the world—lacks the institutional framework needed to manage the first serious crisis since its post-World War II establishment. Lombardi also discusses what the G-20 can and cannot do to help Europe deal with its debt crisis.

It’s Time to Drop the G8 »  (PDF)
Colin Bradford and Johannes Linn analyze the changing role of the G8 with the rise of the G-20. They argue that the G8 has lost its legitimacy and effectiveness due to its reduced relative weight in the world economy and the growing set of complex global challenges that require greater coordination from a diverse group of countries. They advise allowing the G-20 to break the pre-formed, traditional alliances in order to engage in a more fluid and flexible process of discussion, negotiation and bargaining.

Passing the Development Football From the G8 to the G-20 »  (PDF)
Homi Kharas examines what role the G-20 should play in international development vis-à-vis the G8. He argues that while the G8 deserves credit for achieving some positive impacts on development aid and debt relief, the G-20 can and should provide a more comprehensive view of development; one that includes issues like growth, employment, investment and private sector development and that affects a more diverse group of emerging and developing economies.

It’s Time for Africa’s Voice in the G-20 »  (PDF)
Ezra Suruma discusses Africa’s lack of representation in the G-20 despite having Ethiopian and South African leaders participate in the meetings in Toronto. Suruma urges the G-20 and other international forums and institutions to respond to Africa’s quest for inclusion and to increase Africa’s voice of nearly one billion people in the global discussions of world economic affairs, which certainly impact the future of Africa’s growth and development.

G-20 Leadership Lacking on the Doha Round »  (PDF)
Paul Blustein evaluates how the G-20 has delivered so far on the Doha Round of global trade negotiations. He argues that although G-20 leaders have continued to pledge to refrain from using protectionist measures such as raising new barriers to international trade and investment, they have done little to seek an ambitious and balanced conclusion to the Doha Development Round in 2010.

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As the outlook for the world economy has improved since the London Summit last April, the G-20 leaders will meet again in Pittsburgh on September 24. There is the prospect of financial and economic recovery—albeit fragile—and the question is how to ensure that it is sustainable. While it is too early to withdraw the substantial fiscal stimulus and monetary easing, the task that G-20 leaders have to confront now is one of coordinating the composition and timing of their policies so that the world economy progressively gains in strength while the long-run health of public finances does not threaten the recovery process.

To enhance global coordination and to implement effective financial recovery policies, Brookings experts provide recommendations on how the G-20 can overcome current global governance and economic challenges.

Introduction » (PDF)
by Kemal Derviş, Vice President and Director, Global Economy and Development

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Articles

The G-20 and the World Economy: Sink or Swim » (PDF)
Eswar Prasad recommends that the G-20 maintain momentum on reforming the international institutions and advance international regulatory reform for the betterment of the overall global economy.

Confronting the Protectionism Spawned by the Crisis » (PDF)
Chad P. Bown makes the case for re-affirming the G-20 economies’ commitment to the World Trade Organization and curbing trade-restricting policies created by the crisis.

The G-20 and IMF: Their Future Roles in the International Monetary System » (PDF)
Domenico Lombardi proposes that the G-20 should focus on supporting effective measures to reform the International Monetary Fund.

To the G-20: Don’t Overlook Africa During the Recovery » (PDF)
Ernest Aryeetey, Mwangi Kimenyi and John Page assess the impact of the financial crisis on Africa and urge the G-20 leaders to support African economic recovery and growth.

Welcome to the New Era of G-20 Global Leadership » (PDF)
Colin Bradford and Johannes Linn assess the effectiveness of the G-20 summits and how to move the G-20 forward as the global steering body.

International Financial Redesign: A Latin American Perspective » (PDF)
Mauricio Cárdenas calls for international financial regulatory reform in order to address Latin America’s need for greater financial development and to prevent future crises.

The G-20 and Climate Change: Achieving Comparable Effort Through a Carbon Price Collar » (PDF)
Warwick McKibbin, Adele Morris and Peter Wilcoxen propose G-20 leaders to focus on the challenges associated with climate change negotiations leading up to the United Nations climate conference in December.

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Leaders of the Group of 20 (G-20), representing 85 percent of the global economy’s output, face a long list of agenda items when they gather on April 2 in London for their second summit. As the world combats a “great recession,” the leaders must address how to help stabilize financial markets and re-start economic growth, reform the global financial system, and aid developing and emerging economies.

Amidst this background of critical issues, Brookings’ global economic and development experts explore a range of recommendations for global policy coordination in advance of the summit and note which issues the leaders should address at the table—and beyond—in order to stem the crisis and avoid future ones.

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Articles 

Stimulate, Reform, Coordinate: A Macroeconomic Agenda for the G-20 » (PDF)
Eswar Prasad proposes a set of policy responses, including macroeconomic stimulus, regulatory reform, global policy coordination and reform of the international financial architecture, that should receive immediate attention and action by G-20 leaders.

Tame Protectionism and Revitalize Trade » (PDF)
Paul Blustein discusses the threat of global economic protectionism and how leaders can realistically address the trend and tackle through next steps with the World Trade Organization.

Speed the Flow of Money to Poor Countries » (PDF)
Homi Kharas addresses the impact of the financial crisis on poor countries, and proposes that the focus of the G-20 should shift from calls for new money to speeding the flow of money already committed.

Mobilize the G-20 to Respond to the Global Economic Crisis » (PDF)
Colin Bradford and Johannes Linn discuss the nature of the G-20 summit and propose seven specific measures that the leaders should act on in order fight the current economic and financial crisis.

Empower the Regional Development Banks » (PDF)
Mauricio Cárdenas makes the case for increasing funding to the regional development banks while mobilizing additional resources for the IMF in order to leverage immediate solutions.

Aid Africa » (PDF)
Ernest Aryeetey and John Page address Africa’s economic landscape and how policymakers in Africa can respond to the crisis as well as how the international community can support Africa through aid and trade.

Good Governance: Learn from the Missing Countries » (PDF)
Daniel Kaufmann explores the fundamental issue of governance and how governance weaknesses contributed to the financial crisis, what can be learned from countries with good governance models and how the G-20 should utilize these lessons to implement reforms.

Focus on What Asia Wants » (PDF)
Lex Rieffel looks at Asia’s perspective on the summit meeting and the global financial crisis, noting the core issues surrounding agreement on increasing resources for the IMF.

Understanding and Addressing Political Instability » (PDF)
Raj Desai examines the issue of political instability in the wake of the financial crisis and proposes a set of action items to help governments ease economic challenges for their citizens.

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Leaders from G-20 countries will gather in Washington this weekend for the first time to address a financial crisis whose evolution highlights a dramatic shift in the global economy. In a new report, Brookings Global experts examine seven key issues at stake and make recommendations for next steps.

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Introduction » (PDF)

1. Financial Regulation and Supervision » (PDF)
   Eswar Prasad outlines the critical issues facing the leaders, including the need to redesign regulatory structures for increasingly complex financial systems and to increase transparency in the operation of specific markets and financial institutions.
   
   
2. Stabilize Emerging Economies » (PDF)
   Mauricio Cárdenas notes the need for emerging market policymakers to deploy countercyclical policies in the face of depressed global demand and falling commodity prices and lays out several measures in support.
   
   
3. Reform the Aid System to Fix the Slow-Burning Global Poverty Crisis » (PDF)
   Homi Kharas argues that leaders must look to maintain aid flows now more than ever at this critical financial inflection point, particularly as developing nations may be hit hardest and long-term global stability depends as much on reducing poverty as it does on fixing the regulations governing global private capital.
   
   
4. Beyond the G-20: Why the WTO Is More Important than Ever » (PDF)
   Paul Blustein argues that the financial crisis proves the World Trade Organization is more relevant than ever for avoiding the beggar-thy-neighbor trade wars that deepened the Great Depression, and recommends that leaders use the summit as an opportunity to reinvigorate the multilateral trading system and refrain from any actions that would undercut the vitally critical contribution of trade to restarting growth.
   
   
5. Now Is the Time for Permanent Governance Changes » (PDF)
   Colin Bradford and Johannes Linn applaud this first-ever meeting at the heads of state level of the G-20 countries and call for a permanent shift to the G-20 from the G-8 in order to make the governance of the global financial order more representative and more effective.
   
   
6. Keep the IMF at the Center » (PDF)
   Lex Rieffel argues that the IMF must stay at the center of the international financial architecture but can do so only if its responsibilities, funding, and governance are reformed to reflect the growing importance of emerging powers and to apply its powers of surveillance to all members including the United States.
   
   
7. What the U.S. and Asia Should Do: Establish a Global Financial Crisis Secretariat and an Asian Financial Facility » (PDF)
   Wing Thye Woo argues that Asia should adopt a regional financial swap facility to complement the IMF, much as the regional development banks complement the World Bank.

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