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G20: Rising Above the G8

Analysis by Sanjay Suri

PITTSBURGH, Sep 25 2009 (IPS) - Something that was perhaps only half-expected has happened in Pittsburgh: the G20 has moved on from being an event to becoming an institution.

Protesters have also descended on Pittsburgh demanding solutions to environmental and economic crises they say were created by the G20.  Credit: whatleydude/flickr

Protesters have also descended on Pittsburgh demanding solutions to environmental and economic crises they say were created by the G20. Credit: whatleydude/flickr

And, certainly less expected, it has supplanted the G8 as the prime organisation for setting economic policies around the world. Implying, inevitably, that there will be a great deal more consultation, and wider consultation, on economic policy not as the answer to a crisis, but as a continuing engagement – if only because everyone can count on a crisis of some kind all the time.

A draft communiqué says the G20 will have "responsibility to the community of nations to assure the overall health of the global economy".

U.S. President Barack Obama is believed to have taken the lead in bringing more solidity to the G20. And in a symbolic indication of its new inclusiveness, the next G20 will be held in Seoul, Korea next year, following on from the summits in Washington, London and Pittsburgh.

The moves from the so-called emerging economies have delivered much of what they sought. And these have been firm moves – pressure as seen by some, but at the least, firm persuasion.

The emerging formed a group of five, the G5 (Brazil, China, India, Mexico and South Africa) that took a collective stand to speak to the rich at the last G8 summit in L'Aquila in Italy. And earlier this month, the BRIC nations (Brazil, Russia, India and China) made a collective presentation at the G20 finance ministers meeting in London for more representation within the International Monetary Fund (IMF) than the rich were bargaining for.

It was perhaps a matter of time before someone ended an arrangement of a sub-group contesting the bigger group within a coalition. Obama has.

Simultaneously, the G8 fizzles out as a group claiming clout. It has not been officially disbanded, but will be a security grouping now. What that role will imply has not been clarified as yet. But the focus is clearly the G20 now.

The end, practically, of the G8 is not necessarily a concession offered by the developed world. "The G8 faced a credibility crisis," John Samuel, international director of ActionAid tells IPS. "It produced a record of broken promises, made statements it did not follow up."

"And secondly, it celebrated the liberal new market which collapsed. It has become redundant, and it really has now only an ornamental position," he notes. The G8 has agreed to give way to the G20 "not out of choice but out of the compulsions of the economic crisis."

A step forward, an undoubtedly historic one at that, but not perhaps occasion for uncritical celebration.

"The question is whether we will now have a super-8 within the G20," says Samuel. "What matters is whether countries such as India and Brazil will be able to change the discourse within the G20. If the G20 becomes a handmaid of the G8, then it does not carry much possibility."

And a new success for major developing countries that a stronger G20 represents may be less romantic than it first seems. "A lot of the countries with G8 are less democratic than the G8 countries," says Samuel.

Saudi Arabia is an obvious instance. But even with India, says Samuel, there is insufficient consultation within parliament and with civil society. "It cannot be left to bureaucrats to negotiate the future of the world."

But few can deny that the change has brought to the major developing countries a historic opportunity to influence the way the world goes. And potentially, to speak also for the poor in nations outside of the G20 – a reminder, surely, is the fact that there may be more poor people within just India than in the rest of the world.

The G20 is believed to account for 90 percent of the world's economic output, and has two-thirds of the world population. There is a telling mismatch in those figures, high as they both seem, and the legitimacy of the G20 will depend substantially on how it addresses that gap.

A telling test will come early enough, as early as November, at a meeting of trade ministers in Geneva. The meeting follows a history of one set of G20 countries like India, China and Brazil at war with the G8 part of the G20 over subsidies and market access. The 20 will no doubt be considering, as will the rest outside of the 20, who will surrender what claims in this as yet fragile new alliance.

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