Talking heads

The utility of G20 meets is an open question

If the joint communique released by the G20 heads of government at the Hangzhou Summit is anything to go by, questions can legitimately be asked about the utility of this elaborately choreographed annual exercise. Beyond reiterating pledges to stand by various previous agreements, a broad commitment to coordinate macro-policies and oppose protectionism, the 24-page statement provided little guidance on the future course of multilateral action by the 20-plus economies that account for over 80 per cent of global GDP. The G20 meets started in 2008 after the sub-prime crisis that precipitated a prolonged global slowdown. It was conceived of as a means for the world's largest economies, especially the emerging nations, to foster closer coordination of economic policy. Between the first meet in Washington DC and the second, a year later, in London (in parallel with finance ministers' meets), there was some progress in terms of putting black money upfront on the global agenda and facilitating information-sharing on international banking and currency flows (such as the French government sharing details of 600-odd bank accounts with Indian authorities). But since then, the pace of reform has noticeably slowed.

Tax havens continue to flourish around the world, with close links to the major global financial centres in London, New York and Hong Kong. The far bigger revelations that caused global ructions in the financial world have come not from G20 initiatives but from data leaks by whistle-blowers coordinated by an international journalists' consortium - first by an IT worker in HSBC's Swiss arm in 2015 and then the massive Panama Papers earlier this year. The scant progress in this respect after six years and 11 meetings was evident from Prime Minister Narendra Modi's unequivocal call for the G20 to act decisively to end tax havens, unconditionally extradite money launderers and end excessive banking secrecy.

It appears the impulses of self-interest and the desire for policy flexibility have reasserted themselves. The four-point "Hangzhou Consensus" spelt out broad, unexceptionable statements but the proceedings in this city, south of Shanghai, suggested little evidence of harmony. On the Paris Agreement on Climate Change, the world's two largest emitters, US and China, ratified the agreement, and India and other developing nations decided to delay the process. The Paris Agreement, which raises challenges for India and other emerging nations in terms of fossil fuel emissions and ending fuel subsidies, may well become the next litmus test of genuine global cooperation. On Nuclear Suppliers' Group membership, India did not receive the unequivocal backing it hoped from the US - the kind that may have encouraged China to follow suit. On the South China Sea encroachments, China seems untroubled by an international ruling against it. Europe struggles with problems of growth and, increasingly, political unity, and the US has been focusing on mammoth free-trade agreements that militate against the spirit of a global trading regime.

Overall this G20 meeting may be better remembered for President Barack Obama's chaotic arrival and Philippine President Rodrigo Duterte's use of vulgar language. On the assumption that it is better for global leaders to talk in these troubled times, these forums retain a certain utility. As an opportunity for genuine global economic and political cooperation, however, the G20 needs to get more purposive.