Why the G-20 Summit in London April 2 Mattered

Most international summit meetings are long on photo-opportunities and short on substance. Last Thursday’s G-20 meeting in London did have genuine substance.

Nobody reads the communiques, or listens to the press conferences of leaders or finance ministers. But here it is:

Top of the list of accomplishments was expansion of IMF resources. The new SDR allocation was perhaps the most noteworthy and unexpected decision: those observers who have proposed such a step in the current international crisis, or in past international crises, have usually been dismissed as pipe-dreamers (John Williamson, Dani Rodrik, George Soros, Joe Stiglitz…). In addition, there seems to have been some forward movement on international regulation of the financial sector, as the Europeans wanted. Although President Obama acquitted himself well overall, the failure to achieve agreement for coordinated additional fiscal stimulus, as the Americans wanted, was probably the greatest shortcoming of the meeting.

I believe the G-20 meeting will be remembered historically, but not primarily for the above reasons. It will be remembered as the occasion on which primary emphasis shifted from the G-7, the global steering group that until now has had a monopoly on real economic decision-making power, to the G-20. Of the various substantive ways in which developing countries could and should have been given more representation in recent years, the shift to the G-20 is the first one to have actually taken place.

Originally published at Jeff Frankel’s Weblog and reproduced here with the author’s permission.

One Response to "Why the G-20 Summit in London April 2 Mattered"

  1. Guest   April 7, 2009 at 9:43 am

    It is time to seriously consider moving from the monetary system to a new one.The eternal growing debt is to be considered. You should be working in the bases for a new world trading system, instead of putting so much effort on the already proved uneven and far from reality system. Please stop justifying this “flat earth” system and face the roundness of the real world, made of real people with real needs.It is time to build a real economic system, far from the “air money” that sustains the present one. Please.