Institute of Development Studies

Why the G20 meeting marks an historic occasion – or ought to!

Richard Jolly

The G20 meeting on Thursday, though far from perfect, is a vital occasion. With the world economy in global crisis, the need for a meeting to explore coordinated measures of stimulus and longer term economic restructuring ought to be obvious to all. Cynics and pessimists should work for change, not stay on the sidelines nay-saying.

There’s an element of truth in all the criticisms that have been levelled at the G20 – but none of them add up to adequate reasons for not getting richer-country leaders together to explore common positions, critical differences and the politics of international action to help the way forward.

Few international meetings begin without a group of sherpas having mapped out much of the territory beforehand – including drafting anodyne communiqués. Unusually in this case, Gordon Brown – by common consent, the political leader with the most international economic and financial experience – has been his own sherpa, personally visiting many of the leaders and countries before the formal G-20 meeting opens. Many of us on the sidelines should hope that it will succeed, especially in two respects:

• Getting agreement on some immediate actions, to be taken internationally and by as many individual countries as possible
• Further measures of stimulus and recovery, with global monitoring of their effectiveness
• Measures to improve international financial regulation
• Steps towards combining actions for recovery with those for control of or adaptation to climate change and poverty reduction
• Measures to provide greater support to poorer developing countries, if possible by the creation of SDRs by the IMF allocated entirely or mostly to developing countries

Equally important will be the decision to meet again and in the meantime explore more fundamental issues of global economic governance:

• Reform of the voting structure and mode of operations of the IMF and the World Bank. The Managing Director of the World Bank has already spoken of the need for a shift in paradigm. Gordon Brown has been more explicit in talking of the need to leave behind the Washington Consensus.
• How to bring objectives of diminishing instabilities and national and international inequalities into the operations of global economic and financial institutions
• More concrete actions on climate change
• Strengthening the poorest countries in trade and investment negotiations and activities
• Fortifying the UN and the working relationships between the UN and the Bretton Wood Institutions
• Working to bring coherence into global governance, especially by making support of human development and human rights explicit parts of the governance of international trade

This would not be the first time that the international community has looked at these issues. International action to tackle employment, global instabilities and global inequalities were mainstream UN issues when the UN was first set up. Today, however, there is recent experience which shows the all enveloping costs of neglecting instabilities and inequalities and trusting to the market with minimal controls. The time is ripe to explore new approaches, in actions and in research about possible actions. This is the long-run challenge and hopefully, the optimists at the G20 and those on the ‘outside’ will press for serious action – realising that it will take much more than a single meeting.

Sir Richard Jolly is a Research Associate at the Institute of Development Studies

Related News

IDS Research Reveals the Impact of the Global Financial Crisis on the Developing World: What the G20 need to know

Published: 27 Mar 2009

Related Publications

• (2009) 'Policy Responses to the Global Financial Crises', IDS In Focus Policy Briefing 7, IDS