Affairs

Diplomacy

Summit or nothing— Washington

Preface

Last night, Finnish prime minister Matti Vanhanen’s arrival in Washington was celebrated at his country’s embassy with a party in his honour.

G-20, Obama, UN, United Nations, Economy, International affairs, Politics

22 September 2009

Last night, Finnish prime minister Matti Vanhanen’s arrival in Washington was celebrated at his country’s embassy with a party in his honour. Like many national leaders, Vanhanen is spending the week shuttling between Washington and New York, where he will participate in UN General Assembly meetings. But, unlike many of his peers, Vanhanen will not make it to Pittsburgh.

The G-20 was supposed to be the cuddly, broadminded upgrade to the exclusive clubs of five, six, seven and eight that gathered to plot policy for a generation. But when the world’s 20 largest economies convene on Thursday to negotiate banking reforms and climate financing, some countries are, perhaps inevitably, grousing that they’ve still been left out. “What I’ve noticed is everybody wants the smallest possible group, smallest possible organisation, that includes them,” Barack Obama observed, wryly, at a press conference at the G-8 this summer in L’Aquila, Italy. “So if they’re the 21st-largest nation in the world, then they want the G-21, and think it’s highly unfair if they’ve been cut out.”

Throughout the year, Vanhanen (of the 33rd largest economy in the world) and his regional neighbours have been trying to change the mathematics in their favour. This spring, he argued that the five Nordic countries – a cadre of first-world economies that, while individually too small to rank – deserve to share a seat since they would make the top 15 if counted together. (According to International Monetary Fund statistics, Sweden ranks 22, Norway 24, Denmark 29, and Iceland 101.) When the White House, which is hosting the Pittsburgh conclave, appeared cool to the proposal, the Norwegian government used a different adding machine: if the Nordic bloc banded together with the three Baltic nations, their economy would rank ninth.

The G-20 is the result of gradual expansion from an original group of six large democracies that met in the mid-1970s to address the oil crisis and the collapse of the Bretton Woods money management system. Canada joined in 1976 as the seventh, and in 1997 Russia made eight. But when the decade’s economic crises in developing countries sent shockwaves throughout the world, finance ministers brought in a dozen others. Twenty seemed to be a perfect number, satisfying leaders of developing nations such as Mexico, India and Indonesia who had griped about their exclusion. “We are talking about the G-20 because the G-8 doesn’t have any more reason to exist,” Brazilian president Luiz Inácio Lula da Silva said last autumn, when the G-20 first gathered heads of state in Washington to formulate a coordinated response to the credit crisis.

But now smaller, developing nations are arguing that even the new framework continues to leave their interests behind. “While 90 per cent of global gross domestic product [GDP] will be represented at the G-20 table in Pittsburgh in September, 90 per cent of the world’s countries and their voices will be missing,” Kamalesh Sharma, secretary general of the Commonwealth, wrote in a recent essay that (somewhat cheekily) floated the idea of establishing a G-200. “For the developing world, embodied in the G172 not at the summit, the current global downturn is devastating.”

But what Obama has called “the issue of the Gs” obscures that perhaps more than ever, the eyes are on only one attendee. It is Obama’s first chance to preside over an international meeting and already he seems to be disappointing European allies with how little credibility he has on the crucial issues before the G-20. Obama’s proposals to reduce greenhouse gases and to more aggressively regulate banks have floundered in Congress and the White House has made clear neither topic is a priority at the moment. This may be the year the largest economy in the world wishes it had just been left out.

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