Russia Direct interviews experts to find out what factors will define the success of the G20 summit in Australia. While many participants expect an agenda focused on economic issues, tensions between Russia and other G20 members remain in the background.
Demonstrators wearing large caricature heads of World leaders, from left, U.S. President Barack Obama, German Chancellor Angela Merkel and British Prime Minister David Cameron pose for a photo dressed as life guards ahead of the G-20 summit in Brisbane, Australia, Friday, Nov. 14, 2014. Photo: AP
With the annual G20 Summit taking place in Australia on Nov. 15-16, Russian and foreign experts have been carefully analyzing the implications of the summit, especially within the context of increasing tensions between Russia and the West.
One of the key questions, they say, is whether the G20 is sustainable enough to meet current geopolitical and economic challenges as a global governance institution. Some experts have been raising questions about the G20’s efficiency, implying that the summit should be seen as nothing more than just diplomatic and political photo-ops.
Likewise, foreign economists and investors are increasingly doubtful of the impact of events such as the G20.
"Market participants probably expect little of substance out of the G20,” said Bernard Sucher, a member of the board of directors at Aton Group, who previously worked in the operations of financial institutions such as Bank of America-Merrill Lynch, Troika Dialog, Alfa Capital and Goldman Sachs.
At the same time, Sucher admits that, “Any continuing discussion of the broader agenda that preceded Russia's annexation of Crimea must be encouraging." This is especially true given the current plight of U.S.-Russia relations.
Meanwhile, the Kremlin sees the G20 summit as an opportunity for a dialogue to reach understanding on international issues. Before his visit to Australia, Russian President Vladimir Putin said in an interview with the TASS news agency that the G20 format “is in demand” today, because it is “the platform, where it is possible to meet, discuss bilateral relations and global problems as well as come up with common understanding on the problem and the ways of how to resolve it.” He sees such summits as a sort of road map for common initiative.
At the same time, other experts acknowledge that the G20 has been successful in dealing with the economic and financial downturns of the past fifteen years in both Europe and Asia.
“It is fairly commonly accepted that the G20 has been most successful as the ‘special ops’ task force in charge of managing financial crises,” argues Nikolay Murashkin, a researcher from Cambridge Central Asia Forum, in his brief for Russia Direct. “As a reminder, the Group first met in 1999, when the effects of the Asian crisis (1997) and Russian sovereign debt crisis (1998) were still poignant. The most recent crisis – the 2008 global financial crisis – required a coordinated international response that would be more efficient than that of financial institutions just acting alone.”
Keeping this in mind, Russia Direct interviewed Russian and foreign experts to figure out what factors will ultimately define the success of the G20 summit. What results will the G20 reach? To what extent have the Ukrainian crisis and confrontation between Russia and the West changed the role of this summit?
Katherine Magalif, Director of the Center for Democracy and International Affairs at Virginia International University
The Australians have been very careful to focus the agenda of the G20 in Brisbane specifically on economic growth, bypassing some of the geopolitical issues affecting that growth. There are two agenda items key to this summit. The first is the goal of increasing GDP by over two percent above current trajectory over the next five years. The other is to modernize the international tax system to minimize international tax avoidance by multinationals. The rest of the agenda basically follows the last few summits – strategies for growth, job creation, strengthening international institutions, etc.
The summit will be successful in that these modified goals and targets will be accepted and put into a new policy document. However, since there are no real legal ways to enforce the document, any discussions are left as just that – talk. It is up to the member nations’ governing bodies to actually implement any policies. Nevertheless, the summit is not a completely irrelevant photo-op, allowing the opportunity for leaders to engage in more intimate bilateral meetings. It is those meetings that end up being more important to individual member economies and the group as a whole, despite not being an official part of the G20 agenda.
Several key geopolitical issues are overshadowing the current talks – the situation in Ukraine and resulting economic sanctions, the Islamic State of Iraq and the Greater Syria (ISIS), and the unresolved downing of MH17. And yet these issues will not completely distract from the goals of the summit, despite any rhetoric to the contrary (think “shirt fronting”) or shows of naval force. In fact, most leaders have backed away from anything overly contentious, with Vladimir Putin promising to only bring up economic sanctions if asked and Australia's Prime Minster Tony Abbott stating that all he needs is an assurance of a dedicated investigation into the downed flight.
Mike Callaghan, Director of the G20 Studies Center at Lowy Institute for International Policy
It is important that the Brisbane G20 Summit is a success. An increasingly integrated global economy needs an effective forum to facilitate international economic cooperation, especially in areas such as international trade, tax, globally operating financial institutions, and climate change. However concerns have been raised about the effectiveness of the G20 in recent years with a growing agenda and the spirit of cooperation weakening as the immediacy of the global financial crisis has faded. While much of the criticism of the G20 is harsh, and it has achieved a great deal, the forum does have problems.
As chair of the G20 in 2014, Australia has sought to reinvigorate the forum by pursuing a focused agenda and achieving tangible outcomes. This is an ambitious goal in any year but it is more difficult by events in 2014 that have increased the challenges confronting the G20. The international organizations have revised down their forecasts for the global economy, downside risks are increasing as are geopolitical tensions and past international agreements are not being progressed, such as the WTO Bali trade agreement and the governance reforms in the International Monetary Fund (IMF). However these events highlight the importance to the global economy of achieving a successful outcome from the Brisbane Summit.
To succeed in re-energizing the G20, the Brisbane Summit requires a 'headline' outcome, engaged leaders, a focus on implementation, and clear evidence of cooperation between world countries in dealing with global issues. Achievements should include solid progress towards attaining the forum's growth target, a renewed effort to advance multilateral trade liberalization and provide strategic direction to the WTO, and a real attempt to modernize international tax arrangements and combat tax avoidance and evasion. Tangible progress on these issues would provide the world with a much-needed boost to confidence.
Andrey V. Shelepov, Junior Research Fellow at the International Organizations Research Institute (IORI) in the Higher School of Economics’ Global Governance Research Center:
The success of the Australian G20 presidency should be based on the combination of its own efforts to promote the G20 as a premier global forum, and its ability to draw lessons from the previous G20 experience.
As G20 chair, Australia has kept the most important priorities of the Russian presidency, such as financing for investment and combating tax base erosion and profit shifting, on its own agenda. And the G20 has been working in cooperation with international organizations to develop further policy measures addressing these issues. Job creation, increased labor force participation and social inclusion have also remained on the agenda.
Although Australia did not organize a joint labor and finance ministers’ meeting as in 2013, the labor and employment ministerial meeting held on Sept. 10-11 has produced meaningful results, including the proposal to establish an Employment working group within the G20, and to keep social issues within the G20 labor agenda.
The Australian presidency implements an outreach program similar to that of the previous presidency, with five groups of social partners holding their meetings several months prior to the Brisbane summit. At the same time, it is still up to Australia to develop its own institutional innovations that will position G20 as an international institution capable of finding both long-term responses to economic and financial challenges, and flexibly addressing issues that demand urgent solutions, and present these at the Brisbane summit.
If such initiatives are launched, they will further strengthen the G20’s institutional framework and its role as a major global leaders’ forum. In particular, the leaders could take steps to develop G20 accountability mechanisms, revitalize the Mutual Assessment process and institutionalize the G20 work on long-term infrastructure financing. At the moment, just prior to the summit, it is evident that at least some of these issues (for instance, infrastructure) will be definitely taken up by the leaders.
Tatyana Isachenko, a professor in the Department of International Economic Relations and Foreign Economic Relations at MGIMO University, and an expert at Russian International Affairs Council (RIAC)
What will define the success of the G20 summit and what results we should be expecting? The answer on this question depends on what do we consider to be a success or, putting it differently, what do we recognize as a success. In a certain sense during last half of the year Russia appeared to be in a political and economic isolation from the Western countries and the perspectives of the cooperation with Asian Latin American nations are not well defined yet. The participation of Russian President in such an event is a “good sign”, it means that there is still some room for negotiations and hope we wouldn’t be excluded from the global cooperation at all.
I wouldn’t expect something significant and any fundamental progress or improvement is hardly to be reached in terms of concrete decisions. The political environment prevents reaching important agreements, since our partners don’t want Russia to participate and negotiate, hence any important decision or measure in the global economy and politics couldn’t be accepted without Russia.
Taking into consideration the above mentioned development the role of the current summit has changed significantly and it is more diplomatic and protocol event, a kind of not breaking the rule. I believe that all G20 members still hope that in a certain time it would be possible to overcome the political conflict and the G20 will become the important world forum again. At the same time we have to admit that the future word would never be the same as it was before the escalation of the conflict and probably there is a need for G20 to define its perspectives for the future.
UPDATE: The article was updated on November 15 , 2014 to include comments from Tatyana Isachenko, a professor in the Department of International Economic Relations and Foreign Economic Relations at MGIMO University.
Russia Direct releases a brief – “Why the G20 Still Matters for Russia” – that provides important context for Russia’s participation in this year’s event. It also considers the future sustainability of the G20 as a multilateral institution for global governance. To what extent does the G20 meet the interests of its member states and, more specifically, those of Russia? What should the G20 do to become more relevant in the current geopolitical situation? Will the economic agenda be able to overshadow the geopolitical one? Subscribe and download the full version of the Brief to find out.