Leaked panel report tells G20 to stick to tight script to maintain credibility

Wednesday, April 21, 2010 , Posted by TJ at 5:22 PM

OTTAWA - Stick to a carefully crafted script if you don't want it to die.

That's the advice from an expert Canadian-Korean panel that met last month in Ottawa to advise the Harper government on how to keep the G20 alive beyond its seminal summit in Toronto this summer.

Their 115-page report, obtained by The Canadian Press, says the new international club - tasked with solving the global economic meltdown - will lose public trust and face a dubious future if it makes promises it can't keep.

Far-reaching and difficult negotiations such as global trade liberalization and climate change should be avoided, the rarefied group advises.

Instead, the summit should follow elements of the G20's New Beginning framework from its Pittsburgh summit last fall that focused on promoting sustainable and balanced economic growth.

"It is critically urgent, at this moment in the G20's development, to build on the G20's initial successes and advance its credibility and effectiveness. This can be best achieved by focusing on a small number of pressing priorities," says the 115-page report prepared for the government, and obtained by The Canadian Press.

"The G20, after all, remains something of an experiment in collective leadership and enhanced co-ordination. It will be properly judged not by the promises it makes, but by the progress it delivers."

Carleton University's Norman Paterson School of International Affairs and its counterpart with Seoul National University gathered 25 economists, diplomats, ex-politicos and academics to help the Conservative government craft an attainable agenda for the June 26-27 meeting in Toronto - the first summit of the G20 as a permanent body.

The group was led by veteran mandarin Derek Burney and leading Korean economic heavyweight Yung Chul Park. Burney is a former Canadian ambassador to Washington and served as the head of Prime Minister Stephen Harper's 2006 government transition team

Canada contributed 15 members to the panel - including two ex-finance ministers, Liberal John Manley and Tory Michael Wilson - former Bank of Canada governor Gordon Thiessen, former Privy Council clerk Kevin Lynch and one-time Finance Department official Wendy Dobson, who now heads the Rotman School of Management at the University of Toronto.

The group held a day-long seminar in Ottawa last month and addressed the G20 meeting of sherpas, the top organizers from each of the group's 20 countries who were also holding a planning session in Ottawa.

Its key message was that although economic recovery shows positive signs in some countries, it remains "fragile, unevenly shared, and vulnerable to reversal." The report cited imbalances between surplus and deficit countries and the continuing soaring deficits in some.

"Recovery cannot be sustained unless these acute imbalances are corrected and fiscal discipline is exercised," the report states.

"Specifically, surplus countries (notably China, but also Germany and Japan) must be encouraged to accelerate domestic consumption and public spending; deficit countries (notably the United States but also the United Kingdom) must adopt prudent fiscal policies in the medium term, restrain consumer demand, and generate more exports."

This won't be easy, the group says, and resorting to "naming and shaming" won't work either.

That is an apparent reference to the tension between the U.S. and China that many feared would leave the summit in tatters.

Economic tensions between Beijing and Washington have eased recently, but the group urges the G20 to carefully address the imbalances between the Chinese and U.S. economies.

The report urges the G20 to pursue international financial regulation and reform. Its suggestions include pushing for a "sensible level" of capital reserve for banks, perhaps as high as eight per cent. It also calls for reform of the International Monetary Fund, including the need for merit-based appointments to top management posts.

But the group appears less enthusiastic about the G20 getting behind energy security and climate change financing.

The group pans last year's global climate change conference in Copenhagen as a "failure of process" and says the G20 should "integrate green-economy thinking more fully into energy security and economic discussions."

But it says the G20 should assume only a "supplementary" role to the United Nations Framework Convention on Climate Change.

"Despite the commitments to energy security by the G20 leaders, it seems there has not yet been much progress in furthering the discussions," says the report, which cites as one reason "the lack of consensus within the G20 in addressing a wide range of energy security issues."

Though the group says the Doha Round of global trade negotiations needs to be completed, it doesn't think it would be a good idea for the G20 leaders to hitch their cart to that horse.

"In particular, G20 leaders should not affirm Doha deadlines they know will not be met. Unkept commitments only diminish confidence in open trade and weaken public trust in the G20 itself."

Currently have 0 comments:

Leave a Reply

Post a Comment

wibiya widget