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April 1, 2009
Is G-20 the right institution to handle economic crisis?

Protesters in London erected a banner in advance of the G-20 meeting in the city.

President Barack Obama arrived in London on Tuesday in advance of Thursday’s G-20 gathering. There, the leaders of the world’s most powerful countries hope to devise a plan to end the most serious global economic downturn since the Great Depression.

On Wednesday, the president met with the British prime minister and offered assurances that the differences among world leaders attending the summit meeting have been exaggerated.

“I am absolutely confident that this meeting will reflect enormous consensus about the need to work in concert to deal with these problems,” he said. “I think that the separation between the various parties involved has been vastly overstated.”

Daniele Archibugi is director of the Italian National Research Council and professor of innovation, governance and public policy at Birkbeck College, University of London. He writes at OpenDemocracy to argue that members states’ interests are too divergent, and that the G-20 is not a representative international body.

The G20 ought to be increased to 6 Billion

The G20 is important in the eyes of the world. Its pronouncements could decide whether you can get a job, refinance a mortgage, get a loan if you are a small company and, in the poorer parts of the world, even put your kids to bed with a full stomach.

Is the G20 really the right institution to address so many hopes and fears? From the standpoint of legitimacy, not at all. It has no employees, no headquarters and not even a statute. Indeed the international relations handbooks cannot tell us how to handle it, as it is situated half way between an international organization and the more formalized practices of traditional diplomatic channels.

In spite of the name, it does not even have 20 member states: it has only 19, boosted by the addition of a European Union representative. The member governments are by no means featherweights; as they themselves often remind us, they represent 85 per cent of world production, 80 per cent of world trade and two thirds of the world population.

However, these are merely quantitative values and have little to do with legitimacy. For Bangladesh it is not enough to have a population six times greater than that of Saudi Arabia to become part of the group. The only representative from the continent of Africa is South Africa. The G20 is lacking in logic also as far as income is concerned: Spain, Iran, Taiwan, the Netherlands and Poland have a gross domestic product exceeding that of Saudi Arabia, Argentina and South Africa but have not been invited. Also other countries of crucial importance for world financial architecture, such as Switzerland with its banking system and the Arab Emirates with its Sovereign Wealth Fund assets, are absent.

How does that one third of the world population whose state representatives have not even been invited to the Summit feel about it? A good 173 countries in the world have been left out and can only wait and see what is decided in London. We are talking about one third of the world population which has all the problems of the other two thirds and often many more, but in this case have no voice.

However, it is still better than the G8, it might be objected, which groups the governments of only 14 per cent of the world population, all of which located in the North of the world. It might be argued that to enlarge the meeting and turn it into a G192, a kind of UN General Assembly on a school outing, would make it more representative but also inconclusive as there would be no possibility of taking effective decisions. The crisis that has hit the financial markets calls for strong messages to be transmitted, which can only come from those governments that have enough resources to guarantee them. But the countries that have fat wallets do not seem to be interested in sending these messages, perhaps because they have not been given a mandate to act on behalf of all countries.

Initially dreamed up to act as a clearing house to the G8 by providing a platform also for the countries of the South, it has become entangled in inter-governmental logic and represents interests that are too divergent to allow a consensus to be reached.

To read more, see the original post.

The views expressed by contributing bloggers do not reflect the views of Worldfocus or its partners.

Photo courtesy of Flickr user thehutch under a Creative Commons license.

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1 comment


I believe the G-20 is not the situation to the financial crisis because many nations are different in their economics system. United States will be outpaced by china in GDP(PPP) in about 20 years. China is a socialist country, which will rival United States capitalist’s system that will lead miss management of the world economy.

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