As a crisis response entity, the Group of 20 was superb. In 2009 at the nadir of the global financial crisis, leaders from lands accounting for 85% of global output agreed to flood their stumbling economies with cash—demonstrating to a benumbed public that competent leadership was in charge, that confidence would be restored—and most importantly–there would not be a worldwide depression.
We forget how dire things were in 2009. Global growth had shrunk by half to 1.5%. The US economy was declining by 2.6%, Europe by 4%, Japan by 5.5%. When leaders from China and India, oil exporter Saudi Arabia, Indonesia, Turkey, South Africa and others flew to London to join their European, American and Japanese counterparts they agreed to pump $5 trillion into the global economy.
And they did more than coordinated stimulus. They committed to resisting trade protectionism and currency devaluations, aware that “beggar-thy-neighbor” policies had disastrously worsened the great depression of the 1930s. They pledged an additional $1trillion to the International Monetary Fund so that the emergency lender would have adequate resources to help countries in distress.
Jim O’Neil, a former top official at Goldman Sachs and inventor of the BRICS acronym, says “the creation of the G-20 was one of the few positive consequences of the financial crisis.” Larry Summers, a former US Treasury secretary, calls the London G20 summit “the most important economic meeting in twenty years.” Paul Martin, the former Canadian prime minister who with Summers created the G20 as a financial ministers’ forum in 1999, says “the coordinated stimulus and other measures prevented the financial crisis from becoming a global depression.”
When it was elevated to the leaders’ level in 2008 the G20 was envisaged as a steering committee for the global economy. Some policy makers expected the more inclusive G20 to supersede an outmoded G7– the collection of four European countries plus the United States, Canada and Japan. That hasn’t happened.
Fred Bergsten, the former head of Washington’s Peterson Institute for International Economics, said after the London summit that the real test of the G20 would be how it functioned when there wasn’t a crisis. To avoid decaying and fading, said Bergsten, “the G20 had to shift from crisis response to systemic management.” By that metric the G20 gets low marks.
The G20 is not a club. It has no secretariat or permanent staff. It’s an ad hoc forum where the chairmanship rotates among participants. When the Australians hosted the summit in 2014, they were shocked to learn that previous meetings had created 73 working groups. Australia’s efforts to streamline the summits were unsuccessful.
Which brings us to the present. President Trump says the December 14, 15 G20 summit he will host in Miami will be a “back to basics” meeting, its focus being making the global economy grow faster. His treasury secretary Scott Bessent complains of “mission creep,” the G20 tries to do too much, its agenda including matters as diverse as debt relief, resource mobilization, clean energy, female empowerment and inequality. Bessent says the G20 has gotten too big, so many people have been invited to previous summits, he says, that they may as well be called G100s.
As to inclusion, President Trump is a disrupter. He pointedly refused to attend the 2025 summit in Johannesburg, citing his opposition to South Africa’s racial policies. South Africa, an original G20 member, is being excluded from Miami while Russia, suspended after its 2022 invasion of Ukraine, is being included. At the recent G20 finance meeting in Asheville, North Carolina, the presence of the Russian finance minister infuriated European participants. For the leaders meeting in Miami, Trump has invited Poland in place of South Africa.
French president Emmanuel Macron observed after the Johannesburg summit that the G20 “may be nearing the end of a cycle.” He suggested that the G20 is failing because of geo-political differences and its failure to resolve global conflicts.
Johannesburg may have been a low point for multilateralism and the G20. It was not only President Trump who was a no-show. China’s Xi Jinping didn’t come. And the leaders of Russia, Mexico and Argentina were absent.
We’ll see what happens in Miami. Optimists believe the G20 remains a vital forum that will regain its former clout with the next financial crisis.
[Image: Donald Trump]
Barry D. Wood has reported from G20 summits in Washington, Brisbane, Antalya, Hamburg, and Osaka.
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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