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It is pretty common these days, at least in Washington, to pour scorn—or at least cold water—on the idea that a global summit could have much impact on the crisis. I would count myself among the skeptics with regard to a mega-meeting with 100+ countries around the table, and it does seem like at least one of those meetings is scheduled for December or thereabouts.
But, in addition, President Bush has invited G-20 heads of government to meet at one of his places (exact location TBA) on November 15. The G-20 convenes the ministries of finance and central banks of 19 countries, and sensibly adds the European Union (represented by both the European Commission and the European Central Bank.)
The countries are the G-7 (club of large rich countries), plus another industrialized country (Australia), plus 11 leading emerging markets, representing all continents: 3 from Latin America, 1 from Africa, 1 from the Middle East, 4 from Asia, and 2 that span continents (Turkey and Russia). The G-20 claims 2/3 of the world's population and 90 percent of world GDP, so it has plenty of economic and intellectual firepower. In terms of financial centrality needed to address the current crisis, I would prefer to have at the table also Switzerland (but they don't like to join things), Hong Kong and Singapore. However, these three countries are included in one or more "G-7 and friends" regular meetings at the OECD and the Bank for International Settlements, so they are in regular conversation with some key members of the G-20.
And it's the regular conversation that matters. The principals (ministers and governors) meet once a year, ordinarily. But their deputies meet twice a year, and it’s at—and in the run up to—these technical meetings that most of the work gets done. These deputies know each other well and can work together. Constructive proposals can be hammered out, starting with the next ministerial meeting in Sao Paolo on November 8–9. And the fact that G-20 heads of government will now start meeting (dinner is on November 14; mark your calendars) is most significant. Almost always, once a group like this meets, it can agree on its own importance and the need for another meeting.
The chair of the G-20 rotates between "regional grouping" and has a great deal of agenda-setting power. The chair for 2009 is … the United Kingdom. This is a great forum for Gordon Brown to advance his Bretton Woods II ideas, and for others to put more immediate recession fighting ideas on the table.
Still, the G-20 definitely needs to rework its website. The current version shows no sense of dynamism, global reform or even having read the newspapers recently. May I suggest a weekly podcast?
This essay is part of the Baseline Scenario blog by Simon Johnson.
