Russian Government
Protesters and critics view the G20 as a failure and as an outdated body in need of replacement.
“The G20 is irrelevant!” says Emma Burgisser of the Bretton Woods Project, which critiques international financial institutions. She is discussing the recent 2017 summit in Hamburg, Germany, where representatives of twenty economic powerhouse nations gathered to discuss the future of global trade.
In its coverage of the summit, the U.S. media focused on Donald Trump’s meeting with Vladimir Putin and violent protests from a few extreme anarchists. Yet others were asking whether the G20 organization deserved to survive. Some are calling for it to be replaced with a more broad-based, transparent international body.
At the same time as the G20 summit, an alternative Global Solidarity Summit took place elsewhere in Hamburg. It discussed such crucial issues as economic inequality, austerity, international finances, privatization, militarization, and border closure—all from a radically different perspective than the G20.
That there is a need for new approaches was underscored by the lack of accomplishments at the 2017 summit, which failed to deliver on an array of core issues related to its economic mission. Burgisser cites “the looming global debt crisis, tax avoidance and evasion, trade, investment, financial sector reform” as among the big issues on which the meeting failed to yield new conclusions or agreements.
And Jesse Griffiths, director of Eurodad, an alternative debt and development network, called the group’s final statements on the global commerce and investment “masterpieces of bureaucratic obfuscation, offering something for everyone, while saying very little, and presenting no new initiatives.”
In the wake of what it considers a failed summit, Eurodad has called for the G20 to be replaced “by an Economic Coordination Council elected by all U.N. member states.” This idea traces back to a 2009 United Nations Report of the Commission of Experts chaired by Nobel-prize winning economist Joseph Stiglitz.
Unlike the G20, the Economic Coordination Council would have a permanent secretariat, enhancing its influence. It would also have a more democratic election process than either the G20 or current United Nations bodies, giving it a broader mandate than either in pursuing economic policy.
The council “would be a way of matching the need for the major economies to be round the table when dealing with the issues that the G20 covers, matched by an election process allowing all other states to select additional representatives,” Griffiths said via email. It would likely resist the kind of austerity measures recently pursued against Greece and long inflicted on developing countries unable to pay their debts, notably by the International Monetary Fund.
“The G20 as a body doesn’t really have an interest in solving” issues related to the looming global debt crisis, says Burgisser. This illustrates the dangers of having a small group of affluent nations make decisions that affect the entire globe.
“The G20 as a body doesn’t really have an interest in solving” issues related to the looming global debt crisis, says Burgisser. This illustrates the dangers of having a small group of affluent nations make decisions that affect the entire globe.
Despite such problems, the G20—or at least 19 or its 20 members—does have one important new point of agreement: That Trump and the United States are wrong on the critical issue of climate change.
All of the summit participants except the United States signed a pledge to work together on “the Paris Agreement’s aim to strengthen the global response to the threat of climate change . . . by holding the increase in the global average temperature to well below 2 degrees celsius above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees celsius.”
This constitutes a strong statement of defiance and is an indication of the Trump Administration’s lack of credibility and leadership.
If fidelity to the Paris agreement shows at least rhetorical support for action on climate change, in other areas the G20 has failed to listen to its critics.
Burgisser took part in one meeting between civil society organizations and key G20 players representing the German government, the European Union, and the International Monetary Fund. Outside were protesters and loud sirens and the area around the building was cordoned off.
Yet inside, she says, “officials from the G20 did not give an inch of space to civil society on any issue.” G20 officials refused to seriously consider alternative voices regarding the path to sustainable, equitable societies. “The city around you is literally burning,” exclaims Burgisser, and you are “closing the window and ignoring it all.”
G20 officials refused to seriously consider alternative voices regarding the path to sustainable, equitable societies. “The city around you is literally burning,” exclaims Burgisser, and you are “closing the window and ignoring it all.”
Austerity remains a contested issue, demanded of Germany by Greece and, for much longer, by international financial institutions of developing countries. Burgisser critiques the IMF, which pursues neoliberal policies similar to the G20. Under its controversial “structural adjustment program,” the group has long demanded that countries in debt trim government spending—even when that hurts people, slows the economy, and ultimately impedes the ability to repay debt.
When Trump won the election, she says, some within the IMF were “panicking” at the advance of populism. In response, they took seriously the need to deal with income inequality, and stepped up its research. But the initiative “started lagging really fast,” Burgisser says, with the IMF returning to its default position that growth is good for all. Officials “started saying, actually there is no such thing as winners and losers, only big winners and little winners,” defaulting to the neoliberal position that growth works for all.
The critique of neoliberalism—that it fosters inequity and discourages investment in deeper social values—may receive lip service from institutions such as the IMF and the G20, but entrenched resistance and backsliding prevent deeper change. For that to occur, we need new approaches.