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July 14, 2013

The G-20 Agenda -- A View From the White House Sherpa
Posted by David Shorr

20130712094420002_hdThe other day I moderated a discussion of the G-20's agenda for St. Petersburg in September at a CSIS summit preview event organized by Matt Goodman's political economy program at the center. But the key point about the scope of the G-20's remit came from Caroline Atkinson, President Obama's top international economic policy adviser and his personal representative (or Sherpa) in the preparations for the G-20 and other summits. (You can watch my panel session on C-SPAN here and Atkinson's keynote presentation here.)

Fellow G-20 wonks familiar with the running debate regarding the breadth of topics on the docket -- and my own view of the matter -- will understand why I was so pleased to hear Caroline Atkinson say this:

So there are other issues that over the years have been added to the agenda, and I was just having a debate yesterday with one of my other Sherpa colleagues who was saying we should do a ‘back to basics’ and only worry about the global economy debate.  And I don’t agree with that because I think that part of the power of the G-20 also is that these countries—if we make policy commitments—they can have an important role in setting a global agenda and in affecting the global economy in a larger sense, not just the current and fiscal account deficits but other important areas.

And one of the important steps the G20 has taken in recent years--which might seem not central to the global macro debate but is of enormous importance in the world—was to agree not to put on export bans for food products in times of shortage. That helped a lot of countries to explain to their domestic audiences why they would not, in times of shortage, think of resorting to an export food ban. And we know from the work that IMF and others have done that these export bans worsened the global food crisis. Just an example of how in a global world what any country does can really have a quick and immediate impact.

The idea of the G-20 going back to basics has many proponents. They argue that the process must stay focused on its core responsibilities for macroeconomic policy and financial regulation. From this vantage, other ancillary issues distract and detract from the really important work. But like Atkinson, I take the opposite view. Far from being distractions, topics like food security, climate change, and anti-corruption are opportunities for the G-20 to do some good.

As I argued at length in an earlier post, there's some scapegoating going on here:

I've seen this many times in discourse regarding multilateral bodies; in the rush to criticize the collective entity, the policy and political divisions among member governments get overlooked. So we can debate the wisdom of tight fiscal and monetary policy, but the G-20 has clearly given its leaders ample opportunity for, as they say, a full and frank exchange of views. The November 2011 Cannes summit, for example, was pretty much consumed by the Greek political crisis.

So let's not forget that the leaders sharply disagreed on the central question of how to promote economic growth and recovery from the Great Recession. Then there is Atkinson's point about "the power of the G-20" and its unique combination of influential global players fom the developed and developing world. The G-20 actually has two identities within the broader multilateral system. Its more prominent role is collective stewardship of the global economy. The other has to do with shifts in the global power distribution and the rise of emerging economies such as China, India, and Brazil. The G-20 summits are a multilateral innovation that bring together the emerging and established powers as peer equals, and macroeconomic policy is hardly the sole sphere needing their collective attention and action. (For a fuller exposition and proposal, see Barry Carin and my "G-20 as a Lever for Progress.")

The example of food commodity markets cited by the US Sherpa is apt indeed. Besides the historic financial meltdown, 2008 also saw a food crisis and spike in prices with an even more direct impact on the world's poorest households. The underlying issue for what Atkinson described is, just like with financial regulatory reform, whether enough has been done to prevent a recurrence. And as it happens, my organization recently published a paper on this question by food security expert Sophia Murphy.

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