A noble mission of far-sighted global cooperation to avoid a looming economic crisis brought together a doughty group of nations, representing 85 per cent of the world’s GDP and two-thirds of its population, under the banner of the G20. However, after the dark days of the 2008 crisis inspired then-freshly-elected U.S. President Barack Obama to take over the reins of financial regulatory reform, the annual gathering of the group has, it would appear, degenerated into a publicity opportunity for divergent national concerns. As Hangzhou played host to the G20 meeting, there were reports that the Chinese government had emptied the city of its original inhabitants for the duration of the summit — an act that seemed symbolic of the final communiqué of the G20 itself, pretty on the outside but lacking in substance. Among the major issues that found mention in the summit was the question of excess steel capacity in China resulting in a flood of cheap imports into India, the U.K. and other economies. Despite reports of resistance from China to any mention of steel policy coordination in the 7,000-word communiqué, the document had a “call for increased information sharing and cooperation through the formation of a Global Forum on steel excess capacity”.
Climate change was the other major agenda point. Notwithstanding Mr. Obama’s disappearing dream of securing full global support for the Paris Agreement before his second term ends, a symbolic show of solidarity towards this goal in the form of the U.S. and China ratifying the Agreement last week failed to produce any dramatic commitments in Hangzhou. Contrarily in India, media reports struck a note of relief that Prime Minister Narendra Modi’s negotiators had fobbed off any attempts to insist that the deal be done before a December 2016 deadline. Numerous low-key objectives shared by multiple G20 members, such as strengthening enforcement against international tax avoidance and advancing cooperation on Base Erosion and Profit Shifting, certainly got a shot in the arm from this G20 gathering. Yet, there is no comparison to the patchy and vague nature of progress in these smaller goals to the collaboratively evolved financial regulation architecture that emerged from the ashes of the 2008 meltdown and put the brakes on excessive risk-taking by banks. This only begs the question: has the G20 lost its way, outlived its usefulness? Would it be more institutionally efficient to revert to other regional groupings that have overlapping conversations on these very subjects? It may well be time to re-examine the G20’s purpose and, if necessary, recast its vision and mission entirely.
