One of the few bright spots in the aftermath of the collapse of Lehman Brothers was the emergence of the G20 as an effective forum for addressing the world’s economic problems. Yet since successful summits in Washington and London, the group’s reputation has slipped. The last meeting, in Toronto, was a failure. And the run-up to Thursday’s gathering in Seoul has been plagued by bickering over currencies and global imbalances. There have even been questions about the group’s relevance as a forum. The G20 must not allow this to derail it.
The switch from the G8 to the G20 as the world’s pre-eminent economic talking shop was largely driven by the sheer scale and urgency of the economic crisis. So it is perhaps not surprising that, without the prospect of imminent economic Armageddon to bind its members together, politicians are again pursuing unco-ordinated policies. Their appetite for international co-operation has waned.
This is a mistake. For the elevation of the G20 was also a tacit acknowledgment of two important facts, both of which remain true, even as the crisis ebbs. First, the world’s big economic problems can only be solved by co-ordinated action. Second, the days when the course of the global economy could be set by the G8 are gone: today any deal with global objectives is meaningless unless it includes the world’s emerging economies.