Seoul Scorecard: A Gentleman's B
The G-20 summit concluded in Seoul without fireworks inside or outside the conference rooms. The Korean authorities must be relieved. But let's take stock of the process and grade the summiteers and their governments on their accomplishments. Let's remember as well that summits are largely about agenda setting and agenda completion; they are less about headline-grabbing agreements for journalists to write about. What agreements are reached normally are leaked or telegraphed weeks or months in advance.
My grading of the principal eight topics on the Seoul agenda is as follows:
- Sustaining the recovery. The commitment is there, but many observers, including the International Monetary Fund (IMF) staff in its report to the leaders, think that their forecasts are optimistic. Grade B-
- Achieving balanced growth, i.e., avoiding global imbalances: The leaders did not go significantly beyond the language of their finance ministers and central bank governors in their statement at Gyeongju, Korea, three weeks ago. They are committed to an ongoing process of mutual examination, aided by a range of indicative indicators against the background of a long-term commitment to move more generally toward market-determined exchange rates systems. To date there has been no meeting of minds. The US Federal Reserve's quantitative easing, known as QE2, may have been an environmental negative, but maybe QE2 will be a positive in the longer run if in the future it causes a broader discussion of policies that affect exchange rates and economic performance. Grade B
- IMF Governance Reform. As I wrote on November 8, the agreed actions on shares (voting power) and chairs (seats) is a pretty good step in the right direction, although less than what some observers were hoping for. Grade B+
- Global Financial Safety Net. The Korean effort to coax and cajole other members of the IMF and the international community to create better mechanisms to support countries that are side-swiped in international financial crises has borne positive results. The Korean government hoped for more, and more may come, but the government is right to declare victory. Grade A-
- Financial Regulatory Reform. The agenda that was teed up at the Washington summit in November 2008 has been substantially completed in record time. Many observers are disappointed with the results, but the leaders did not declare victory, which is good news. Grade B-
- Seoul Development Consensus. This was a Korean effort to bring new issues to the G-20 summit table. In my view, it violates the principle that the G-20 is about "our" economic cooperation (of the members), not about other countries' policies. That reservation aside, the six principles and nine-point action plan will be soon forgotten. Grade C
- Trade and Climate Change. When the leaders know they will not be able to accomplish anything, they shamelessly enhance their rhetoric about their intentions. For example, "We will spare no effort to reach a balanced and successful outcome in Cancun." Grade C
- Noncooperative Jurisdictions and Anticorruption. The issues of tax evasion, corruption, and other global public bads are important topics for international cooperation, but they are not central to cooperation among the G-20 nations. The blandishments of the G-20 have produced some positive results over the past 18 months on the tax-evasion front, but my purest view is that these issues do not belong on the agenda of a restricted group of countries that is primarily criticizing nonparticipants for their noncooperation. Grade C+
On balance, a solid, non-grade-inflated gentleman's B for the leaders both male and female.