The Group of 20 leading economies was one of the main ways officials responded to the financial crisis that tipped the global economy into recession in 2008.
But now that the worst of the crisis has passed, officials at a gathering in Washington in recent days voiced doubts about the G-20′s mission.
“I think to some extent we have lost our way,” Canadian Finance Minister Jim Flaherty said Thursday in Washington. “There is a concern that we’re wandering a bit, and not focusing on the global economic issues that are pressing.”
After the banking meltdown and financial markets onslaught of 2008, governments used the G-20 to discuss and coordinate fiscal and monetary policies and hammer out a new framework for financial regulation.
Unlike the Group of Seven, the G-20 includes major emerging economies such as Brazil and India. But now the worst of the crisis has passed, officials are increasingly wondering what the G-20 is for. Where once those grumbles were heard privately, now they’re spilling out into the open.
Mr. Flaherty’s concerns were echoed on Saturday by Jörg Asmussen, a member of the European Central Bank’s executive board. The G-20 has “lost a bit of momentum,”Mr. Asmussen said at a meeting of the Institute of International Finance, also in Washington.
Mr. Asmussen said he would like the G-20 to focus on big macroeconomic and financial issues like taxation and regulation and ditch the dozens of other things that often make it onto the agenda.
“I’m not saying that food security and labor issues are not important, but maybe the G-20 is not the group to deal with them.” The central banker made a couple of suggestions to make the G-20 more effective, including setting up a dedicated secretariat to make it run more smoothly and efficiently, and banning overly long and vague communiques.
Australia’s Secretary to the Treasury Martin Parkinson agreed, saying the group needs to focus purely on driving economic growth and making the world economy resilient to future crises. He complained of a “G-20 industry” that has sprung up, with lobbyists pushing to get their pet crusades on the agenda.
And he said senior central bankers and finance ministers spend too much time getting bogged down by technicalities instead of making decisions. “If we really want to have success as a G-20, then we have to have discipline,” he said.
Australia is the G-20 host nation next year, following Russia’s leadership this year. Responding to a question about U.S. influence, Russian Finance Minister Anton Siluanov said Friday that the G-20 is more about sharing opinions among leaders than giving advice to each other, since the countries tend to make their own decisions on key issues.
Of course, not everyone agrees the G-20 should narrow its focus. Turkey’s deputy prime minister, Ali Babacan, told the IIF meeting that with economic growth returning, officials should discuss measures that improve the quality of that growth, such as social and environmental protections, as well as making banking and loan services available to the world’s poorer nations.
wsj.com
But now that the worst of the crisis has passed, officials at a gathering in Washington in recent days voiced doubts about the G-20′s mission.
“I think to some extent we have lost our way,” Canadian Finance Minister Jim Flaherty said Thursday in Washington. “There is a concern that we’re wandering a bit, and not focusing on the global economic issues that are pressing.”
After the banking meltdown and financial markets onslaught of 2008, governments used the G-20 to discuss and coordinate fiscal and monetary policies and hammer out a new framework for financial regulation.
Unlike the Group of Seven, the G-20 includes major emerging economies such as Brazil and India. But now the worst of the crisis has passed, officials are increasingly wondering what the G-20 is for. Where once those grumbles were heard privately, now they’re spilling out into the open.
Mr. Flaherty’s concerns were echoed on Saturday by Jörg Asmussen, a member of the European Central Bank’s executive board. The G-20 has “lost a bit of momentum,”Mr. Asmussen said at a meeting of the Institute of International Finance, also in Washington.
Mr. Asmussen said he would like the G-20 to focus on big macroeconomic and financial issues like taxation and regulation and ditch the dozens of other things that often make it onto the agenda.
“I’m not saying that food security and labor issues are not important, but maybe the G-20 is not the group to deal with them.” The central banker made a couple of suggestions to make the G-20 more effective, including setting up a dedicated secretariat to make it run more smoothly and efficiently, and banning overly long and vague communiques.
Australia’s Secretary to the Treasury Martin Parkinson agreed, saying the group needs to focus purely on driving economic growth and making the world economy resilient to future crises. He complained of a “G-20 industry” that has sprung up, with lobbyists pushing to get their pet crusades on the agenda.
And he said senior central bankers and finance ministers spend too much time getting bogged down by technicalities instead of making decisions. “If we really want to have success as a G-20, then we have to have discipline,” he said.
Australia is the G-20 host nation next year, following Russia’s leadership this year. Responding to a question about U.S. influence, Russian Finance Minister Anton Siluanov said Friday that the G-20 is more about sharing opinions among leaders than giving advice to each other, since the countries tend to make their own decisions on key issues.
Of course, not everyone agrees the G-20 should narrow its focus. Turkey’s deputy prime minister, Ali Babacan, told the IIF meeting that with economic growth returning, officials should discuss measures that improve the quality of that growth, such as social and environmental protections, as well as making banking and loan services available to the world’s poorer nations.
wsj.com
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