After the G-20 – Who, What, Why, and How?

SHIFT magazine treats you to an analysis of the G-20 you won’t see in the mainstream media!

The weekend of 15th – 16th November saw the G-20 descend on the sub-tropical metropolis of Brisbane, capital of the quintessentially Australian state of Queensland. At a cost of AU$400 million, the ninth meeting of the Group of Twenty attracted around 4,000 delegates to knock heads together over their shared goal of furthering economic growth.

Global economic forums aren’t really aimed at informing the general public, much less engaging us in the conversations that dictate our futures – and you could be forgiven for thinking global economic governance is a rather dry topic that you have little chance of understanding. Although we may not be able to make it sound all that exciting, we can put it all in a nutshell so you’ll at least be able to reel off a few facts when asked what you think of it all. After all, it’s our economic future the leaders of the world’s major economies have just been deciding behind closed doors…

1. WHAT IS THE G-20, AND WHAT DOES IT ACTUALLY DO?

The G-20 is a forum for international coordination of economic policy. It is the latest initiative for global economic governance in a string of such initiatives since World War II that includes the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). The G-20 heads of government or heads of state have convened at nine summits since the Group’s first meeting in 2008.

And if you’re a little confused by all the G-numbers out there, you can relax, as the G-20 has replaced the G-8 as the main economic council of wealthy nations since 2009, so this is the one you need to know about.

One important fact to keep in mind regarding the G-20 is that its parameters for development are very narrow – economic growth is the key goal, and one school of thought dominates the Group: neo-liberal ‘free’ trade as the means by which perpetual growth is to be achieved. It is a faith-based notion that the invisible hand will provide, and the exclusion of economically poor countries from the Group casts suspicion on who the invisible hand is supposed to provide for.

2. WHO ARE THE G20 COUNTRIES ANYWAY?

It wouldn’t be entirely unreasonable to expect that the G-20 is simply a collection of the world’s wealthiest 20 nations, as it certainly seems clear that wealth is the clique’s main concern. The Group of Twenty in fact comprises strategically selected governments and central bank governors of twenty major economies – 19 individual countries, and the European Union (EU), all of which are among the top 34 ranking economies in GDP terms. The G-20 economies collectively account for 85% of gross world product (GWP), 80% of world trade, and two thirds of the global population.

G-20 membership policy has been heavily criticized since the Group’s inception. In addition to the 20 member states, the CEOs of several other international forums and institutions participate in G-20 meetings – including the managing director and chair of the IMF, the President of the World Bank, the International Monetary and Financial Committee, and the chair of the Development Assistance Committee.

Regarding membership, the G-20 states that:

“In a forum such as the G-20, it is particularly important for the number of countries involved to be restricted and fixed to ensure the effectiveness and continuity of its activity. There are no formal criteria for G-20 membership, and the composition of the group has remained unchanged since it was established. In view of the objectives of the G-20, it was considered important that countries and regions of systemic significance for the international financial system be included. Aspects such as geographical balance and population representation also played a major part.”

The list of G-20 member states, ranked according to GDP, is as follows (data according to the IMF, 2014):

G-20 member GDP rank Participating leader at Brisbane Summit % of global GDP
EU – represented by the European Commission and the European Central Bank Herman Van Rompuy, President of the European Council & Jean-Claude Juncker, President of the European Commission 23.7%
USA 1 Barack Obama, President 22.4%
China 2 Xi Jinping, President 13.3%
Japan 3 Shinzō Abe, Prime Minister 6.1%
Germany 4 Angela Merkel, Chancellor 4.9%
France 5 François Hollande, President 3.7%
UK 6 David Cameron, Prime Minister 3.7%
Brazil 7 Dilma Rousseff, President 2.9%
Italy 8 Matteo Renzi, Prime Minister 2.7%
Russia 9 Vladimir Putin, President 2.7%
India 10 Narendra Modi, Prime Minister 2.6%
Canada 11 Stephen Harper, Prime Minister
Australia 12 Tony Abbott, Prime Minister
South Korea 14 Park Guen-Hye, President
Mexico 15 Enrique Peña Nieto, President
Indonesia 16 Joko Widodo, President
Turkey 18 Ahmet Davutoğlu, Prime Minister
Argentina 21 Axel Kicillof, Minister of Economy
Saudi Arabia 19 Salman, Crown Prince of Saudi Arabia
South Africa 33 Jacob Zuma, President

Controversy over the attendance of Russian President Vladimir Putin divided NATO alliance members, and a July 2014 poll found that 49% of Australians did not think Putin should be allowed to attend, following the eruption of the Ukraine crisis and the crash of Malaysia Airlines Flight 17, despite the dearth of evidence regarding Russia’s involvement.

3. WHAT ABOUT THE COUNTRIES NOT INCLUDED?

Not represented by membership in the G-20, despite ranking higher in GDP terms than some members, are:

  • Switzerland – 20
  • Nigeria – 21
  • Norway – 26
  • Taiwan – 27
  • United Arab Emirates (UAE) – 29
  • Iran – 30
  • Colombia – 31
  • Thailand – 32

With respect to having a more equal representation of nations from various global regions, it would, perhaps, make sense to include Nigeria and either Iran or the UAE in the Group of Twenty, as both Africa and the Middle East are barely represented. As the selection criteria for G-20 membership is not transparent, the reasons for their exclusion are open to speculation.

The following countries are not included independently, but are represented by the EU:

  • Spain – 13
  • Netherlands – 16
  • Sweden – 22
  • Poland – 23
  • Belgium – 25
  • Austria – 28
  • Denmark – 33

Spain, although not an official G-20 member, has been involved as a “permanent guest” of the organization, and the Spanish government’s policy is not to request official membership.

The under-representation of the African continent has been at the forefront of criticisms leveled at the G-20’s exclusivity. It is of particular interest to note that the European Union is included in the G-20, but the African Union and the Association of Southeast Asian Nations (ASEAN) are not. Hard questions need to be asked regarding the exclusion of the developing economies of the Global South from the world’s foremost coalition for global economic governance. What does their absence imply, if not a higher priority given to the growth of already wealthy nations?

4. WHO ARE THE GUEST COUNTRIES?

In the spirit of fairness, or at least lip-service to fairness, each G-20 meeting generously throws its doors open to a number of guest countries. Typically invitees include the Chair of the Association of Southeast Asian Nations (ASEAN) – currently Myanmar, the Chair of the African Union – currently Mauritania, and a representative of the New Partnership for Africa’s Development are invited – in this case Senegal, as well as leaders of the Financial Stability Board, the International Labour Organization, the International Monetary Fund (IMF), the Organization for Economic Co-operation and Development (OECD), the United Nations (UN), the World Bank Group, and the World Trade Organization (WTO).

Other invitees are chosen by the host country, and usually include one or two countries from its own geographic region. Australia invited New Zealand and Singapore, benign neighbours with whom it has no cause for quarrel. In light of Australia’s outsourcing of its refugee quota to its poorer neighbours, it would have been an interesting exercise in international economic governance had Papua New Guinea and Nauru been invited instead.

The 2014 G-20 invitees included the following 6 countries:

G-20 member GDP rank Participating leader at Brisbane Summit
Mauritania 152 Mohamed Ould Abdel Aziz, President
Myanmar 75 Thein Sein, President
New Zealand 54 John Key, Prime Minister
Senegal 116 Macky Sall, President
Singapore 36 Lee Hsien Loong, Prime Minister
Spain 13 Mariano Rajoy, Prime Minister

5. DRACONIAN SECURITY MEASURES

Amid heightened security, legislation introduced specifically for the G-20 suspended civil liberties, enabling police to:

  • make arrests without warrants
  • detain people without charge
  • predispose courts to refuse bail to arrestees
  • conduct extensive personal searches without warrant – including strip searches

A number of household items – including eggs and flour – were banned from being carried in public, and anyone caught with one of these objects subjected to penalties. Penalties also applied to anyone carrying, for whatever reason the creative mind might imagine, whips, bows and arrows, and lizards.

The Peaceful Assembly act was also suspended during the G-20 meeting dates. Permission to protest was strictly regulated and restricted to certain locations; even the size of protestors’ placards was restricted to within certain parameters.

The G-20 security legislation made heavy fines enforceable, with penalty units of $110, and most offenses carrying between 50 and 100 penalty units’ worth of fines. The weight of the penalties combined with the draconian restrictions on freedoms rendered protest against the Summit all but impotent. A handful of demonstrations carried out by creative activists – such as the staged ‘arrest’ of a Tony Abbott impersonator by a group of children for his ‘crimes against the climate’ – succeeded in highlighting the absence of matters of critical importance from the G-20 agenda.

Independent Legal Observers were also on hand to observe and document any police brutality, but were prohibited from intervening, with the clarification that intervention could compromise their evidence, rendering it legally void.

If the security measures employed by the Brisbane G-20 Summit are built upon for future Summits, activists are going to need to rise to the challenge by employing ever more creative measures to get their messages of protest across. The likelihood of success in delaying or closing down the Summit’s proceedings is small, but would lead to opportunities to demand transparent and accountable global economic governance.

6. WHAT DID THE G-20 ACHIEVE?

The joint communiqué of the G-20 leaders summarized the points of agreement of the summit. None of these agreements are binding, but the G-20 intends to oversee development in the directions specified.

For the first time in G-20 history, climate change was not included on the agenda for discussion, with the Australian Prime Minister stating that he did not want the agenda “cluttered” by subjects that would distract from economic growth. EU and US officials are reported to have been unhappy with this decision.

Although the main focus of the Summit, as agreed in advance, was economic growth, other topics of global concern that did not feature in the resulting communiqué – including climate change, energy supply, and the West African Ebola epidemic – were discussed, thanks to pressures both internal and external.

Key points of agreement featured in the communiqué are as follows:

  • Economic growth
    • Plans to increase global economic growth by an extra 2%
    • Job creation
    • Increased trade – via multilateral trading systems
    • Poverty reduction
    • Economic recovery post global financial crisis
    • Resilience to future shocks such as another global financial crisis
  • Infrastructure spending
    • Investment through the creation of a four-year infrastructure hub (to be based in Sydney, Australia), linking government, private sector, development banks and interested international organizations.
    • Investment in infrastructure is to be facilitated by better information sharing and the collaboration between the private sector, governments, development banks and international organizations.
    • The hub intends to assist construction globally by helping countries “improve their general investment climates, reduce barriers to investment, grow their ‘project pipelines’, and help match investors with projects.”
  • Stability of global systems
    • Measures to reduce risk in financial systems
    • Improvements to the stability of banks
    • Measures to make international taxation arrangements fairer and more transparent (the topic of tax avoidance was fueled by disclosure of confidential tax agreements between 340 multinational corporations and Luxembourg).
    • Reduction in corruption
    • Strengthening of global institutions

The extent to which any of these goals can be achieved is debatable. Economic recovery since the Global Financial Crisis has not been reassuring, and many analysts now predict another global recession is looming, with UK Prime Minister David Cameron prominent among them.

With the absence of alternative schools of thought to neo-liberalism, the supremacy of the economic growth imperative, and the exclusion of developing economies from the discussion, the G-20 is a force for maintenance of the status quo, not a force for positive change.

The economic future of our global community demands fair representation, consideration of alternative schools of thought informed by evidence, and a set of realistic, tangible and achievable goals. If the G-20 cannot provide, then it is an illegitimate structure for economic governance.

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