This year, the US president may not even show up.
Less than 48 hours before the planned start of the global summit, the White House will not say whether President Trump will attend the event, which hosts Saudi Arabia but is practically being held due to the coronavirus pandemic.
It’s just the latest reminder that world leaders have struggled to develop a common response during this once-a-century health and economic emergency. The president originally wanted to hold this year̵
The G-20 is now moving in the spotlight with expectations remarkably low given the efforts. On Saturday and Sunday, the G-20’s annual conclave is expected to complete a framework to give poor nations debt relief and little else.
“I do not imagine that much progress will be made,” said Douglas Rediker, president of International Capital Strategies, a financial advisory firm.
With signs that the global economic recovery is stalling, some influential voices are calling for intensified cross-border cooperation.
The head of the International Monetary Fund, Kristalina Georgieva, warned the G-20 that uncoordinated crisis spending would cost two-thirds more than a common approach. And she urged them to prepare an ambitious list of synchronized infrastructure investments to help complete the recovery once the pandemic is tamed.
Business leaders and prominent Democrats, meanwhile, want President-elect Joe Biden to convene world leaders early in his administration to work out a common response to the pandemic’s intertwined health and economic dangers. Lack of coordination of global distribution of a coronavirus vaccine, some say, can prevent any global rebound when richer nations force ahead of poorer ones.
“Sustainable economic recovery can not be achieved anywhere unless we defeat the pandemic everywhere,” Georgieva wrote on Thursday on the IMF blog, adding: “We can create growth, jobs and tackle climate change, far more effectively if we work together. . ”
The G-20 was launched in 1999 to bring together finance and central bank officials from traditional and emerging powers. But in late 2008, as the global economy rolled out, Bush called for an emergency leadership summit.
The first time the forum quickly emerged as the crisis management cockpit for presidents and prime ministers. After the second summit in April 2009, Obama announced that leaders had achieved “a level of tangible, global economic cooperation that we have never seen before.”
Today, that head of state harmony is only a memory. And Trump’s well-known aversion to multilateral negotiations is only part of the reason. Even before Trump took office, the G-20 had in recent years gained a reputation as an inefficient snake shop rather than an organization that had genuine heft.
The acidification between the United States and China, the world’s two largest economies, has further complicated global cooperation, while the pandemic has prevented the personal contact that symbolized the activism of leaders in the recent crisis.
“The G-20 lost its way many years ago. But it has certainly been worse in the Trump era, ”said Matthew Goodman of the Center for Strategic and International Studies, who helped coordinate the Obama Summit. “There is no sense now about the common purpose that was there in 2008-2009.”
In fact, Trump – whose official schedule has been almost empty since losing the November 3 election – skipped two virtual summits with Asian leaders last weekend. (He is expected to appear briefly on Friday at another rally in Asia and the Pacific.) On Wednesday, the White House declined to comment when asked if the president would attend the G-20.
The group’s eclipse may end when Biden is inaugurated in January. Already, prominent Democrats like former Treasury Secretary Larry Summers have called on the president-elect to convene an early G-20 summit.
Biden, who promised during the presidential campaign to “unite the world” to fight common challenges, is likely to do so, several analysts said.
“I would expect that to happen,” said Tim Adams, president of the Institute of International Finance, an industry group. “This is the first time in the modern era that we did not have a highly visible coordinating head of state response.”
A spokesman for the Biden crossing did not respond to a request for comment.
The elements of business are eager for the United States to resume with a number of international bodies, such as the World Trade Organization, and will welcome a more active fight against crisis.
“There is an important role for the United States in leading the world in a coordinated economic response, as the United States did in 2008-09. All indications are that President-elect Biden and his team understand this well, ”said Josh Bolten, President of Business Roundtable, which represents CEOs of the nation’s largest companies.
Talk of an intensified US effort comes as the outlook for the global economy remains uneasy. The IMF said last month that it expects global output to shrink by 4.4 percent this year and only make “a partial and uneven recovery next year.”
In just a few months, the pandemic could drive up to 150 million people into extreme poverty, turning two decades of steady progress in alleviating the suffering of the world’s poorest people, according to the World Bank.
While global coordination has been delayed, individual countries have this year spent freely compensating for the damage caused by the pandemic. The United States moved within a few weeks of shutting down in March for non-essential companies to approve approx. $ 3 trillion in support for individuals and businesses.
European nations, both individually and through their common union, have spent a comparable sum. The Japanese government is planning more spending on top of the more than $ 200 trillion it has already committed to.
Officials from the Treasury and the Federal Reserve have this year also worked with their counterparts in Europe, Japan and elsewhere to ensure the smooth functioning of financial markets. In March, the Fed resumed a tool it had used extensively in 2008, agreeing to give central banks in countries such as Australia, Brazil and Mexico up to $ 60 billion per year. PCS. In return for foreign currency.
“Finance and central bank officials, including from the United States, have done a great deal of work to mitigate the economic downturn from the pandemic and ensure that the financial system is moderated rather than intensified shock,” said Dan Price, CEO of Rock Creek Global. Advisors.
What is lacking is consistent coordination of heads of state. The $ 11.5 trillion allocated by G-20 nations – even more than during the 2008-09 crisis – is not part of a single roadmap. As individual governments mapped their own course, the resulting imbalances threaten to ignite political sensitivity. A sharp rise in U.S. government spending drove an economic rebound that sucked in imported goods, while some U.S. trading partners spent less. Every month since April, the United States has had a larger trade deficit than in the same month in 2019.
A weakened G-20 has given hope of rebuilding the IMF’s financial war chest, long-term debt relief and global plans to distribute vaccines uncertain, said Josh Lipsky, director of programs and policy for the Atlantic Council’s GeoEconomics Center.
The United States this year blocked the creation of $ 1 trillion in new crisis financing capacity for the IMF and feared that some of the money would flow to countries like China or Iran. And an initiative by the World Bank to suspend debt payments to the poorest countries initially failed to include lenders in China or private sectors. So far, the debt service suspension initiative has saved 43 poor nations $ 5 billion, which Summers has ridiculed by using a “spray gun” to put out a raging fire.
“Unfortunately, the G-20 has been much more of a spectator in this crisis,” said Lipsky, a former IMF official. “This is it for the G-20. If it will not act now, what’s the point? ” he said.
This weekend’s summit is expected to approve a new framework for debt relief, which for the first time will include both China and the world’s banks.
But as was the case 12 years ago, the summit takes place when leaders expect the arrival of a new US president.
Trump’s departure – the most protectionist US president since the 1930s – could facilitate intensified cooperation, including a renewed G-20 pledge to avoid new trade barriers.
But there will remain points of friction. The city’s plan to limit public contracts to goods “Made in the USA” has e.g. Already triggered objections from US trading partners.
“There is a certain tension between domestic industrial policies and cooperation with allies,” said Kelly Ann Shaw, a former Trump White House official who is now a partner at Hogan Lovells. “But we face so many challenges that international coordination becomes the key,” she said.