To say that expectations are low for the annual summit – which will draw President Biden and Chinese President Xi Jinping, as well as leaders from Europe and emerging powers such as India and Brazil – would be an understatement.
The forum, which began at the invitation of President George W. Bush in 2008 and has helped to coordinate global action on economic crises since the 1930s, has become a forum without direction that can hardly even produce an official statement.
“The main purpose of the G-20 is to be able to force the leaders of the countries in one place and at the same time to act. The actual results of the G-20 may be unpleasant, if there is any agreement,” said Douglas Rediker, founder of International Capital Strategies, a financial advisory firm in Washington. , DC “It’s been going down slowly. trends for a long time.”
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The G-20’s current challenges differ from its original strengths.
At the second meeting of these leaders, in London in April 2009, they agreed to spend $5 trillion to boost global demand, provide $1.1 trillion to the International Monetary Fund and tighten financial regulations.
Five months later, when the leaders met for the third time in less than a year, President Barack Obama and his colleagues announced that the G-20 is “the largest forum for international economic cooperation.”
Since then, the team has wanted to do it again.
“The G-20 is not what it was in 2008, 2009. We need a sense of common purpose,” said Matthew Goodman, senior vice president for economics at the Center for Strategic and International Studies in Washington.
In 2009, the US, China and Russia worked together to prevent the financial crisis from bringing the world into crisis. In the memoir, Obama wrote that “perhaps the best news” he received at the London meeting was China’s commitment to a major economic stimulus package.
This year, any idea of sharing has become a problem of great division between the United States, on the one hand, and Russia and China, on the other. Russian President Vladimir Putin is staying at home; His foreign minister, Sergei Lavrov, will attend instead.
But there will be a meeting between the US president and Xi, who are due to meet in person on Monday for the first time since Biden was inaugurated. He is expected to deal with Taiwan and the US’s efforts to prevent China from acquiring high-quality semiconductors.
For their part, European Union officials have tried to temper their expectations, and have indicated in the run-up to the meeting that the leaders have failed to articulate a brief: a consensus statement.
This is what happened last month when G-20 finance ministers and central bankers met in Washington. The impasse over Russia’s invasion of Ukraine stymied efforts to produce an official document, which would have closed the talks. Instead, the Indonesian chairman presented his own “summary” which revealed several divisions among the members.
Organizations such as the G-20 are facing difficulties today because the global economic crisis stems from the war in Ukraine, rather than the economic crisis that made the world prosperous in 2009, according to Kristalina Georgieva, head of the International Monetary Fund. Money.
“You cannot solve the problem of geopolitics using economic policies,” he said. “It will be very difficult to bring economic cooperation to the level it should be. … Ending the war in Ukraine is the single most powerful thing to change the world economy.
However, the White House insisted this week that the G-20, whose members represent more than 80 percent of the world’s economy, is still working.
“The president strongly believes in the importance of the G-20,” a senior administration official told reporters at the meeting, speaking on condition of anonymity.
The conference is where “the world can come together to discuss the challenges we face,” he added.
Even if the whole group fails to accept the initiative boldly, the president hopes for a mutually beneficial dialogue with other leaders. In addition to Xi, he is scheduled to meet privately in Bali with the leaders of Indonesia, Italy and the United Kingdom. Major topics include plans for the previously announced global economic recovery, rising food and energy prices, and the need to strengthen the IMF and World Bank.
The G-20 is also expected to address its slow progress in tackling the debt crisis in developing countries.
In November 2020, the group agreed on a “common strategy” designed to provide financial support to the world’s poorest countries, which have borrowed heavily to fight the epidemic.
Two years later, only three countries participated. Officials are struggling to secure support from China, the world’s largest state creditor, and private sector financial institutions.
“The debt crisis is getting worse,” the United Nations Development Program warned last month, as it identified 54 countries with serious debt problems, including Somalia, Argentina and Laos.
The main focus of the conference, however, is likely to fall due to Russia’s invasion of Ukraine, especially the shocks in commodity prices that it has caused – issues on which cooperation between the Russian government and the rest of the world cannot be achieved.
The most important question is whether China will throw behind Russia in the negotiations or invite others to the Kremlin. Although Xi did not condemn Russia’s war in Ukraine, the Chinese leader spoke out against nuclear war – a statement that other diplomats have warned against Putin – during a recent meeting with German Chancellor Olaf Scholz.
European officials say they have seen no evidence that Beijing will stop supporting Moscow. The EU official, speaking on condition of anonymity to discuss confidential matters, said the Russian and Chinese sides appeared to be in agreement at the upcoming G-20 summit. This collaboration creates “some challenges in achieving the ability to have a single voice,” the official said.
Moreover, Ukraine’s policy makes international cooperation difficult even as it expands. Growth is slowing or expected to slow in the United States, Europe, the United Kingdom and China, while high food and energy costs stemming from the war in Ukraine are driving poor countries in Africa, the Middle East and Asia into greater debt.
Inflation is near a decade high in most advanced economies, and markets are struggling to adjust to a new economic climate, with the Federal Reserve and other central banks raising interest rates.
“These challenges make international financial cooperation as important now as it was after the global financial crisis,” wrote Dutch central banker Klaas Knot in a letter to leaders this week. Knot is the chairman of the Financial Stability Board, which was established by the G-20 in 2009 to issue warnings of systemic risks.
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The formation of the meeting of leaders was in response to the financial crisis. But it also recognized the economic realities of the 21st century. While the United States and a few allies represented the bulk of the world’s trade, developing countries, especially Brazil, Russia, India, China and South Africa, rose to prominence in the early 20th century. 2000’s.
These countries – which have about 40 percent of the world’s population – have been promised for years that they will be able to run international organizations. In the midst of a global crisis that many blame on Wall Street’s financial overreach, it seemed like the right time for the global torch to pass to the mainstream.
“When the G-20 was promoted to leadership, it was a realization that you can’t run the economy from the living room of the West,” said Stewart Patrick, head of the Carnegie Endowment for International Peace.
Ironically, the small, wealthy club of the G-7 was re-invigorated by Russia’s war in Ukraine after the launch of the Trump years. The US and its European allies led the attack on Russia, forcing others to isolate Moscow and support Ukraine.
“The Biden administration has done a great job of promoting a high-quality democracy in the marketplace,” Patrick said. “The problem has been trying to establish a larger partnership.”
Lynch reported from Bali; Rauhala reported from Brussels. Beatriz Rios in Brussels contributed to this story.