It's reassuring to know the world's 20 major economies are marching in step on the road to recovery. Or so they – the G20 in summit in Brisbane at the weekend – would have us believe. Committed to an 800-point action plan that ranges from pledges to assist stalled multilateral trade deal talks, combatting global warming, corruption, tax avoidance, and sexism in the workplace, boosting young people's skills and infrastructure spending . . . motherhood and apple pie.
“This year we set an ambitious goal to lift the G20’s GDP by at least an additional 2 per cent by 2018 . . . This will add more than $2 trillion to the global economy and create millions of jobs,” the summit declaration proclaimed. If only!
The problem is that behind the pious aspirations, the vast majority of which emerged in other fora like the OECD's campaign against tax base erosion, lies an organisation whose capacity to hold members to account on promises is minimal, and whose implementation record is thin. While the first three G20 leaders' summits in Washington, London and Pittsburgh helped co-ordinate fiscal and monetary stimulus and averted an even more severe economic crisis, Mike Callaghan, director of the G20 studies centre at the Lowy thinktank in Sydney, argues that the organisation now risks losing focus. Less leadership forum, more talking shop.
The inclusion, despite vigorous Australian foot-dragging, in the declaration of a vague commitment on global warming, for example, was upstaged by the far more specific and important bilateral agreement days before in Beijing between presidents Obama and Xi Jinping.
And in a promising agreement to introduce transparency on anonymous shell companies that facilitate billions in money laundering, tax evasion and corruption, G20 pulled its punches. Leaders refused to back public registers of beneficial ownership, a key demand of advocacy groups campaigning against the plundering of resources from developing countries.
The agreement to promote growth and jobs, moreover, conceals major differences in macroeconomic approaches as recovery, the leaders admitted, remains "slow, uneven and not delivering the jobs needed". The US which has decided to put growth ahead of deficit reduction as a priority has been growing at 3 per cent while the euro zone stagnates. Washington would like Germany to do more to stimulate demand . . . but G20 has no consensus , so no view.
Those of us outside the ranks of this club of economic heavyweights, pretenders to global economic leadership, can only look on in despair. Never was there a greater need for co-ordinated international action on a range of common issues from banking, to tax bases, to global warming, to trade . . . But expecting it of this economic League of Nations is to hope against hope.