Last week’s gathering of finance ministers and central bankers representing 85 percent of global GDP received precious little attention in the American press. Small wonder. The ostensible purpose of the G20 is to promote and expand economic growth and opportunity around the world through coordinated efforts of the member countries. Yet with all that high-powered economic brain power gathered together, little of consequence was accomplished in terms of specific actions to jump-start global expansion. The summit wrapped up last Saturday with one more in a series of jejune communiques obliquely supporting unspecified pro-growth policies and looking forward to the next meeting.
Chris HopkinsThe Group of Twenty was formed in 1999 following the Asian financial crisis and consists of representatives from 19 nations plus the European Union. The finance ministers (other countries’ equivalent of our Treasury secretary) gather together with members of the respective central banks several times each year. Humility was not one of their organizing principles; according to the G20 fact sheet “its decisive and coordinated actions boosted consumer and business confidence and supported the first stages of economic recovery.”
Additionally the leaders of the G20 nations, including the U.S. president, gather annually for high-level consultations. The last such meeting in Brisbane Australia in November yielded a “comprehensive plan of action” to increase global growth by 2 percentage points. Since then, the world has slowed by about half that measure and IMF estimates of future activity are being reduced further. Needless to say it was less than comprehensive and has yet to see action.
The ministerial attendees at last weekend’s confab discussed climate change, the refugee crisis in Europe, competitive currency devaluations, and even created a new “official engagement group” on the status of women; all laudable and worthwhile subjects but hardly the central drivers in the global economic malaise since the financial crisis. The new women’s group, called the W20, will join the other working groups B20, C20, L20, T20 and Y20 overseeing issues related to business, civil society, organized labor, academia and youth (no kidding). Space remains for 19 more (in the English alphabet anyway).
Other than a brief acknowledgement that central banks cannot carry the whole load, the summiteers again missed the chance to tackle two of the most formidable barriers to growth: the retarding effect of government intervention and regulation, and the constricting impact of global demographic trends.