Kleinmond, South Africa - Global economic power relations, financial stability and commodity cycles led the agenda at the annual Group of 20 (G-20) meeting Nov. 16–18.
The meeting of finance ministers and central bank governors from 20 of the world’s industrialized and developing countries aimed at enhancing international cooperation on cross-border financial and economic matters.
The event, hosted by South Africa, the only African country represented in the G20, took place at a secluded country estate on the Cape coast that afforded delegates an opportunity to focus on policy issues and engage in concentrated dialogue.
While G-20 leaders described the global economic outlook as unclear, partly due to commodity price volatility threatening price stability in many countries, World Bank President Robert B. Zoellick, in attendance along with International Monetary Fund President Dominique Strauss-Kahn, specifically noted the impact on the poor.
“While for some developing countries this can create benefits, I tried to identify that some 17 of the poorest countries are really hard hit by this,” Zoellick said in a post-meeting interview. “I suggested that we have to pay particular attention to try to buffer them from some of the stresses.”
In the session on commodity cycles, Zoellick emphasized some of the tools, in particular a strong replenishment of International Development Agency funds, to assist the poor countries.
“I also talked about the possibilities of our development policy loans to try to reform energy sectors to have better efficiency, to try to draw on private capital to deal with low carbon growth strategies and I tried to connect it to the upcoming agenda of the Bali conference and the Tokyo summit where we can try to build international support to help some of the poorer countries with energy efficiency, thereby cutting their costs and at the same time benefiting the global climate change agenda,” he said.
In addition to global economic matters, delegates took the opportunity to urge reform at the Bank and the Fund, two organizations that impact the global economy. The group reiterated its commitment to strengthening the credibility and legitimacy of the Bank and IMF. Referring to recent selection of the Bank and IMF leadership, the group said senior management should be selected on merit and represent all members.
A statement at the end of the meeting noted “the reforms should enhance the representation of dynamic economies, many of which are emerging market economies."
Zoellick welcomed the ongoing interest in strengthening the voice of representation for developing countries.
“Some of that is focused in the near term on the IMF, but it’s also an important part of the bank’s agenda,” he said. “I also deeply appreciated the good sense of support for the directions that we set out at the time of the [World Bank and IMF] Annual Meetings and encouragement as we try to execute those.”
During a brief address, South African President Thabo Mbeki focused on substantial changes needed in the governance structures of the IMF and World Bank.
“I welcome the six-point framework set out by Bob Zoellick, to transform the World Bank and to contribute to shared and inclusive globalization, and wish Dominique Strauss-Kahn success in facing the challenges that lie ahead at the International Monetary Fund,” he said.
Zoellick in recent weeks laid out a new vision for the Bank to increase its response to poverty. The vision includes six strategic themes:
Helping to overcome poverty and spur sustainable growth in the poorest countries, especially in Africa.
Addressing the special challenges of states coming out of conflict.
Developing a competitive menu of “development solutions” for middle income countries, involving customized services as well as finance.
Playing a more active role with regional and global “public goods” on issues crossing national borders, including climate change, HIV/AIDS, malaria, and aid for trade.
Supporting those advancing development and opportunity in the Arab world.
Fostering a “knowledge and learning” agenda across the World Bank Group to support its role as a “brain trust” of applied experience.
“We are all agreed that the changes that are taking place within these important institutions will help the global community in the critical fight against poverty and underdevelopment,” Mbeki added.
The November meeting was the first G-20 meeting to take place in an African country. Next year the venue switches to Brazil. In 2009, the United Kingdom will play host. The forum brings together important industrial and emerging-market countries from all regions of the world. Together, member countries represent around 90 percent of global gross national product, 80 percent of world trade and two-thirds of the world's population.
The G-20’s economic weight and broad membership gives it a high degree of legitimacy and influence over the management of the global economy and financial system.
“I think the G-20 is a wonderful creation because it brings together the major developing and developed countries,” Zoellick said. “It doesn’t have the poorest countries but it has many of the rising developing countries. When you get that group of ministers and central bankers around the table--you get excellent assessments of what the major issues of the day are,” he said.
SIDEBAR
G-20 Mandate
The G-20 is an informal forum that promotes open and constructive dialogue between industrial and emerging-market countries on key issues related to global economic stability. It came about as a response both to the financial crises of the late 1990s and a growing recognition that key emerging-market countries were not adequately included in the core of global economic discussion and governance. The forum aims to support global growth and development by contributing to the strengthening of the international financial architecture. It achieves this by providing opportunities for dialogue on national policies, international co-operation, and international economic and financial institutions.
Membership
The members of the G-20 are the finance ministers and central bank governors of the wealthy G-7 nations -- the United States, Germany, Japan, France, Italy, Britain and Canada -- as well as Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey.The European Union is also a member, represented by the rotating Council presidency and the European Central Bank. To ensure global economic organizations and institutions work together, the Managing Director of the International Monetary Fund (IMF) and the President of the World Bank, plus the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank, also participate in G-20 meetings on an ex-officio basis.
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