As host of this year’s Group of Twenty (G20) summit, the Mexican government is diligently finalizing the agenda that world leaders will consider in Los Cabos (June 18-19). Earlier this week I was in sunny Mexico City, helping advise Mexico’s G20 sherpa, Deputy Foreign Minister Lourdes Aranda, on summit priorities. I did so as part of a new “Think20” network of think tank experts from around the world—the brainchild of the Canadian Center for International Governance Innovation (CIGI). The consultation, cohosted by the Mexican Foreign Ministry and the Mexican Council on Foreign Relations (COMEXI), offered a rare chance to weigh in on the future of the world’s “premier forum for global economic coordination.” The G20 has a tall task ahead of it, and needs to focus its agenda. Here’s the Internationalist’s take on its priorities for Los Cabos:
Stabilize and Reform the Global Economic and Financial System
- Insulate the world economy from the eurozone crisis. This is job one, and it involves two complementary steps. First, the G20 must continue—as it did at the Cannes summit last November and more recently at the finance ministers’ meeting in late February—to press the Europeans to increase the war chest of the European Financial Stability Facility so that they can prevent sovereign default in Greece and other eurozone countries. In parallel, G20 members must create a firewall around the eurozone—by increasing the resources of the International Monetary Fund (IMF) to provide emergency assistance to protect countries from spillovers from Europe. Many of the big emerging economies are prepared to increase the IMF’s coffers. Whether the United States is willing to do its part, particularly in an election year, remains unclear.
- Deliver on global financial regulation. The biggest objective here is to strengthen the capabilities and authority of the Financial Stability Board (FSB), so that it can harmonize regulations across sovereign jurisdictions, as well as exercise a stronger surveillance function over systemically important financial institutions. Bolstering the FSB now is critical, at a time when the powerful financial services industry is pushing back against sensible regulation in multiple G20 countries. With the credit crisis still fresh in politicians’ minds, Mexico can help deliver a stronger FSB in Los Cabos.
- Accelerate governance reforms within the international financial institutions. The system of weighted voting within the IMF, World Bank, and regional development banks, as well as their governance structures, must be adjusted to reflect ongoing shifts in global economic power. Of course, any such shifts must be linked to tangible financial contributions by major emerging economies. Since this reapportionment will create losers (notably in Europe), it is likely to take several years. But the Los Cabos summit should move the ball forward.
Promote “Green Growth” and Food Security
- Forge consensus on the meaning of “green growth.” Although it’s a nice phrase, “green growth” remains a nebulous concept. Depending on one’s perspective, it can mean environmental protection, development cooperation, people-centered growth, or energy security. Right now different interest groups and policy communities are talking past one another—and G20 nations themselves are divided on the meaning and desirability of the concept. In the run-up to Los Cabos, the Mexican government must embed the vision of “green growth” firmly within the Pittsburgh framework for Strong, Sustainable, and Balanced Growth.
- Build coherence between the G20 summit and the Rio+20 conference. The G20 leaders’ summit in Los Cabos will occur immediately before the UN Conference on Sustainable Development in Rio. This so-called “Earth Summit” has such a massive agenda, with so many voices, that it could be a real train wreck. The G20 can serve as a valuable “pre-negotiation” forum to forge common positions on critical questions, to ensure that expectations for Rio are realistic, and that its action plan is practical.
- Take the long view on food security. The G20’s attention to food security has focused on mitigating short-term volatility, including steps to reduce speculation, eliminate agricultural subsidies, and introduce transparency into food commodity markets. The G20 needs to complement these steps with longer-term structural efforts to increase agricultural productivity. This is critical, because the world faces dire long-term trends. Given population growth and changing dietary preferences of surging middle classes, the demand for food will double over the next forty years. But doubling agricultural production will wreak extraordinary ecological havoc unless we change patterns of production and consumption. In feeding ourselves, we risk killing the planet. G20 vice-ministers of agriculture plan to meet in April and May, but this item merits higher-level attention. It must be placed on leaders’ agenda in June.
Improve the G20’s Performance
- Keep the summit itself as informal as possible. To make the transition from a crisis management committee to an enduring steering group for the global economy, the G20 will need to develop a robust network of multilateral working groups, at the ministerial and deputies level. The summits themselves, however, should remain as informal as possible, with maximum opportunity for open and candid dialogue rather than the reading of scripted remarks. Although some have called for creation of a formal G20 secretariat, most member states have wisely resisted this step, fearing that such a body could take on a life of its own. The United States government, for example, opposes a secretariat, not because it seeks to downgrade the G20 but precisely because it treasures the G20 as a flexible, leader-driven framework of international cooperation.
- Expand the G20 Agenda. The recent informal meeting of G20 foreign ministers—and their decision to continue meeting along a separate track—is an important step forward in global governance. To date, the G20 has been dominated by finance ministers and central bank chiefs. With the engagement of foreign ministers, the G20 is likely to evolve into a more general purpose global coordinating body. After all, the very logic that applies to financial issues—the need to have the world’s most important developed and developing countries at the table—also applies to a wider array of political and security matters, from climate change to governance to nuclear proliferation.
- Recognize the value that think tanks bring to the G20 process. Such a recommendation is admittedly self-serving, coming from a think tank “expert” himself. But the “Think20” experience underscores how useful outside expertise can be to overwhelmed policymakers. At their best, think tanks can provide independent analytical capabilities, fresh insights, and practical policy ideas. Unlike government officials, who confront the “tyranny of the in-box,” think tanks can call attention not only to the “urgent” but also the “important” items that would otherwise be neglected. They can also speak truth to power, since they are less hampered by diplomatic niceties and political sensitivities. Here’s hoping that Russia, which takes over the reins of the G20 on December 1,2012 will be as receptive as Mexico to what the Think20 has to offer.