G20 Summitry Delivers

The G20 group of systemically significant countries was born in Berlin in December 1999. Photo: Bundesregierung/Bergmann

As the Group of Twenty’s (G20) 12th summit approaches its due date of July 7-8, 2017 in Hamburg, citizens of its German host, its G20 partners and beyond increasingly ask if G20 summitry is really worth the time and trouble such events involve. After all, preparing and producing a summit requires much of the valuable time of the host leader and her colleagues, energy from the thousands involved in the preparatory process in the host country as well as the member countries, and expense to ensure a safe, successful, transparent event on site. Moreover, media commentators see summits are little more than “photo ops” where leaders try to show voters back home their importance on the world stage, or “hot tub parties” for informal, freewheeling discussions that produce only platitudes in the end. Even when leaders make clear, collective commitments, many observers wonder if they will actually deliver them once they leave the global sunny summit peak and return to dark, distracting valleys of domestic politics back home.

Such doubts while appropriate are largely misplaced. A careful look at the performance of the first 11 G20 summits confirms that G20 summitry delivers, for citizens in its member countries and in the global community as a whole. Indeed, through such summitry the G20 has gone a long way to fulfill its dual distinctive founding missions of promoting financial stability and making globalization work for the benefit if all.

The G20 group of systemically significant countries was born in Berlin in December 1999, when its members’ finance ministers and central bank governors first met. Its first leaders’ summit came in Washington DC on November 15-16, 2008. Since then leaders have met at for a total of 22 days, to produce 140,426 words of agreed public conclusions. These conclusions contain 361 affirmations of the need to promote financial stability and 299 of making globalizations work for all. They added 164 affirmations of open democracy and 16 of human rights. At last year’s Hangzhou Summit, the Chinese host joined its partners to publicly pledge their full respect for human rights. Few doubt that there are the right goals for global governors to set.

To secure such goals, leaders have made 1,926 precise, future-oriented politically binding commitments. These are these the most important kind of agreements in a world where the politicians make the laws rather than the other way around. Moreover, during the time between one summit and the next summit, leaders have complied with these commitments at an average level of 72%. Over the years their compliance has risen. Now, half way along the road from Hangzhou to Hamburg, compliance has already reached already 71%, with five months left for more implementation to occur. This performance compares favourably with the implementation of the promises the leaders make on the campaign trail at home, or in their regular national policy addresses, such as the State of the Union Address by the president of the United States or the Speech from the Throne by the prime minister of the United Kingdom.

To help deliver these decisions and fill the great gaps in global governance, G20 leaders have created an ever expanding network of flexible, informed G20-centred international institutions at the ministerial, official and civil society levels, and de facto issue-specific “secretariats,” starting with the Financial Stability Board. They have supported and guided a proliferating array of multilateral institutions, above all the International Monetary Fund (IMF), the World Bank, the World Trade Organization, the Organisation for Economic Co-operation and Development (OECD), and the United Nations galaxy too.

The G20 has performed particularly well on several of the German government’s priorities for Hamburg arranged under the three pillars of “Building Resilience,” “Improving Sustainability” and “Assuming Responsibility.”

Building Resilience

Under resilience, on the first priority of the world economy, with macroeconomic policy at its core, G20 summits have made 402 commitments, and complied with them at an average of 80%. Six months after Hangzhou compliance with its macroeconomic commitments has risen to 83%.

On trade and investment, G20 leaders have made 133 commitments and complied with them at an average of 63%. This performance, while disappointing, is still well in the positive range, above 50%. Moreover, six months after Hangzhou, compliance with trade and investment commitments has risen to 83%, despite the proliferation of protectionism in some key members. After the great global financial crisis erupted in September 2008 and the financial system froze, the G20 prevented a poisonous spiral of protectionism, of the dangerous 1930s kind.

On employment and labour, G20 leaders have made 100 commitments and complied with them at an average of 78%. In doing so, the G20 helps the unemployed, and the young, get jobs.

On financial markets and international finance architecture, G20 summits have made 271 commitments on financial regulation and supervision and 120 on reforming international financial institutions (IFIs). With compliance respectively at 75% and 68%. Leaders have thus delivered on their imperative in 2008 to “fix the banks first” and their subsequent 2009 pledge to give the rising emerging countries a fairer share of the IFIs created back in 1944. Six months after Hangzhou, their compliance averages 78%. Every time a person withdraws money from the bank, as some could not amidst the financial crisis in 2008, they know that the G20 works for them.

On international tax cooperation, the number of G20 commitments has recently spiked. Six months after Hangzhou, compliance averages 75%.

Improving Sustainability

Under the second Hamburg pillar of sustainability, the first priority is climate and energy, arguably the central, even existential, issue of our time. On climate, G20 leaders have made 53 commitments and complied at 69%. On energy, they have done better, with 105 commitments and compliance of 73%. Six months after Hangzhou, compliance on climate is 68% and on energy 35%. Within these numbers lies the G20’s greatest compliance failure — the implementation of its September 2009 at Pittsburg promise to phase out inefficient fossil fuel subsidies in the medium term, a phrase widely understood to mean about five years. The IMF has estimated the cost of this compliance failure to be $5.3 trillion.

On the 2030 Agenda for Sustainable Development, G20 leaders have made 193 commitments on their constant concern with development. They have complied at only 66%. Six months after Hangzhou, however, compliance has risen to 78%.

In regard to digitalization, G20 leaders have made 49 commitments on information and communication technologies, but complied at only 55%. Six months after Hangzhou, where innovation was the top priority, interim compliance has soared to 84%.

On global health, a subject arriving on the G20 agenda only in 2014, leaders have made 38 commitment and complied with them at 77%. There are thus good grounds for going beyond their initial concern with the infectious disease of Ebola to address more chronic challenges. These include the global health architecture and antimicrobial resistance, but also the prevention and control of non-communicable diseases, which are the greatest killers of economic wealth and human life in the world.

On empowering women, the G20 has made only six commitments and complied with them at 71%. Six months after Hangzhou, compliance is only 45%. The committed G20 leaders have much to do for Hamburg on the gender equality front.

Assuming Responsibility

Under the third pillar of responsibility, the first priority is tackling the causes of displacement. On migration and refugees, G20 leaders have made only seven commitments but complied with them at a high level of 80%. Six months after Hangzhou, compliance is already at 73%. G20 leaders and their citizens seem to understand that such expatriates are good for the economic growth and social enrichment of those that welcome them.

In regard to partnership with Africa, G20 leaders have made 34 commitments on Africa across 11 issue areas, led by 16 commitments on development alone. But they have complied with them at a level of only 53%, the lowest of any subject they have addressed. With only one of the 19 G20 leaders coming from Africa, leaders must find other ways for their 2017 summit to produce the real partnership they want.

On fighting terrorism G20 leaders have made 16 commitments and complied with them at a very high level of 87%. Six months after Hangzhou, compliance is already at 85%. This is good news for citizens of Berlin, London, Paris, Nice, Orlando, Ottawa and all G20 members, almost all of which have suffered from deadly terrorism at home.

On anticorruption, a subject of much more recent concern to the G20, leaders have done less well. Their 78 commitments have secured compliance of only 57%. However, six months after Hangzhou it is already at 65%.

On agriculture and food security, leaders have made 64 commitments and complied with them at a normal rate of 71%.

Conclusions, Causes and Cures

G20 summits deliver. At 71% compliance they are a glass well over half full and rising fast, rather than stuck at the 50% halfway mark. They have done best on the priorities for resilience and sustainability but still struggle on responsibility, apart from the terrorism domain.

But the world needs the G20 to do better, everywhere. So citizens should ask: what are the causes of this cadence of G20 compliance and the potential cures for the remaining gaps? Above all, which causes and cures are under the direct control of the leaders have worked to raise compliance before, and can probably do so again if used in the right way. Here several central answers stand out.

First, in complying with commitments, every member can inspire all the others to follow. Don’t just look to the most powerful members to take the lead.

Second, belonging to the smaller Group of Seven (G7) and especially the larger OECD helps a country comply. So the Hamburg Summit should work in synergy with the Italian-hosted G7 Taormina Summit taking place six weeks earlier on May 26–27. And the G20 should rely more on the analytically based, consensus-oriented OECD to support its work.

Third, hosting a summit helps raise a country’s compliance with its commitments. So the world will expect Germany to lead in delivering, during and after the Hamburg Summit ends.

Fourth, having a G20 commitment refer to the UN lowers compliance. So the G20 should count on itself rather than pass the buck to the overburdened and under-resourced UN.

Fifth, treating a subject as a macroeconomic policy one raises compliance. So G20 leaders should consider development, climate change and migration as components of and contributors to macroeconomic growth, rather than consigning them to siloes or ghettoes of their own. Mainstreaming, not marginalization, is the message here.

Sixth, when ministers responsible for the same subject meet after the summit makes commitments, compliance improves, so Germany and next year’s host of Argentina should add more ministerials to the repertoire.

Seventh, iteration raises compliance, probably because G20 leaders tackle the world’s toughest problems that take more than a single summit to solve, so leaders should keep making the same commitment, for example on ending fossil fuel subsidies or taking the anti-protectionist pledge, until they finally keep the promises they have made and that their citizens count upon.

as of Spring 2017

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