The leading economic powers’ own stimulus plans are still more important in overcoming the consequences of the crisis than the decisions of the G20 summits, analysts say.
At the latest summit of the Group of Twenty countries in Toronto, the world leaders agreed to halve budget deficits by 2013 and stabilize their state debt by 2016. However, many decisions were postponed until the next forums. Russia, along with several other countries, opposed the idea of imposing a global tax on banks, arguing it may affect ordinary people.
Many analysts and politicians earlier argued that the G20 should replace the G8 format. Russian President Dmitry Medvedev said the G8 was still “comfortable for discussions on political issues, as well as on issues of global security and coordinating foreign policy.” The G8 has an obvious future, he added.
The first G20 summit was held in Washington in November 2008 where world leaders tried to find ways to fight the financial crisis. Then they gathered in London in April 2009 and Pittsburgh in the US in September 2009. The next summits will be held in South Korea and in Mexico.
There is a chance Russia will host the G20 summit in 2013. The decision may be made this fall, Russia’s presidential aide Arkady Dvorkovich said. At the summit in Toronto, leaders also agreed to fight protectionism and investment. The G20 will also try to help create about 30 million jobs worldwide in five years.
The Gulf of Mexico oil spill forced the world leaders to include a special statement in the final declaration about the need to “share best practices to protect the marine environment, prevent accidents related to offshore exploration and development.”
Another result of the summit was a promise to fight global drug trafficking. Anti-drug departments of G20 member states will work with the government of Afghanistan “to minimize threats coming from that country,” Medvedev told a news conference after the summit.
At the same time, different countries will continue to implement their own stimulus plans, which demonstrates the inability of the group to form a united policy, many analysts say.
“Disorder in Toronto staged by anti-globalists and the decision to discuss global economic problems with representatives of business are the main results of the G20 summit,” Kommersant daily wrote.
The summit of the twenty countries concentrated, as usual, on solving economic and financial problems, the paper said. The discussion, in particular, concerned imposing additional taxes on banks. According to estimates of several countries, “the banks are to be blamed for the crisis,” the paper said.
“Russia refused to introduce the tax because responsibility for the crisis is different in many countries,” the daily noted. Business people who participated in a separate discussion at the summit opposed the tax, arguing the decision is ineffective and may hinder economic growth.
The format of the both Group of Eight and the Group of Twenty countries have not been yet institutionalized, Vyacheslav Nikonov, Executive Director of the Russkiy Mir (Russian World) Foundation said.
If the G8 is more a Western club plus Russia, the G20 is obviously a “dialogue of civilizations that represent all the biggest economies of the world,” he told Actualcomment.ru.
“In any case, it is clear that fundamental decisions in anti-crisis policies and financial regulation are possible only within the G20,” Nikonov said. At the same time, developing countries, including Russia play a small voting role and it does not reflect the size of their economies, the analyst noted. However, now this situation is changing, he said.
Yet even the G8 as an organization is rather a platform for negotiations and lacks governing instruments, Nikonov noted. These instruments are in the hands of the G8 member states, he noted.
The countries representing the G20 solve not just their economic issues, believes Aleksandr Shatilov of the Center for Political Conjuncture. This world club is even more blurred than the G8, he told the same source.
Developing countries need the Group of Twenty to “overcome the dominance of the leading Western countries,” the analyst noted. Within the G8, Russia – which has seats in both clubs – solves issues with the greatest world economic powers.
The participation in the G20 makes it possible for Russia to deal with other leading economic players, the analyst noted. But since the economic crisis broke, the leading powers of the West suffered much, he stressed.
“The US showed that it overestimated its global economic dominance,” the analyst said. On the other hand, the European Union also has economic difficulties because of its enlargement policies, he noted. Now European donor countries have to support a number of states of Eastern and Central Europe, whose economies are still weak, Shatilov stressed.
The circle of world leaders is now being decreased and such powers as China, India and Brazil are gaining political weight, the analyst said. Russia joins them, but it was seriously affected by the economic crisis and “has to consolidate its resources now,’ he said.
Sergey Borisov,
Russian Opinion and Analysis Review, RT