The G-8 Failed; Will the G-20 Succeed?

During the Pittsburgh summit, G-20 leaders decided that the G-20 will officially replace the G-8 and become the main framework for global economic discussion. As the framework for the topic on global economy expands, the G-20 promises to contribute more to the global economy. However, the increase in scale does not mean that the difficulties we are facing will decrease.

A New Way to Harmonize the Global Economy?

The leaders of the G-20 have held three summits within one year, claiming that a new way to harmonize the global economy is necessary for the 21st century, and suggest replacing the narrow G-7 or G-8 group, which has controlled economic policies for the last 30 years. Moving forward, the G-20 group will issue orders. Some media sources say that the old economies of the United States, Japan, Germany, France, Britain, Italy, Canada and Russia, which only recently joined, will be replaced by rapidly growing economies like China, Brazil and India.

The leaders of these old economies highly praise the expansion of the group. The British Prime Minister says that the new group will “become the main economic organization in charge of global economic management.” U.S. President Obama has always been in charge of the relay and harmony between the old and new groups, saying that “we can no longer use the way of the 20th century to deal with the challenges of the 21st century.”

However, the U.S. media thinks that the G-20’s achievement during the Pittsburgh summit is not much different than those mixed proposals, which lacked details, of the G-8 in past years.

Pittsburgh’s Pity

During this meeting, France and Germany called for legislature to punish greedy bankers, but the U.S. objected to this. The result of the meeting is that although there are proposals calling for the supervisory side of banks to do their duties and link the business’ performance to salaries and rewards, this has no restraining force at all. Many people are disappointed by this.

The Pittsburgh summit also has many deficiencies. On one hand, we can at least say that these countries agree to negotiate on difficult problems, but they have been arguing about these problems for many years. For example, the G-20 agrees to balance voting rights between developed countries and developing countries, but to also leave the tough decisions to be made at a later time.

“It Makes No Sense to Exclude China”

In addition, some diplomatic language does not match the facts. During this meeting, the countries that compose the G-20 promised to resist any behavior of trade protectionism during this difficult time. They also hoped to avoid opposing trade revenge like the Great Depression in the 1930s. However, last week the Obama administration declared a punitive tariff on tires imported from China.

However, U.S. media believe that G-20 can give more than the G-7 was able to in the past even though all efforts have, so far, failed. This is because the right people sit at a negotiation table and negotiate strategic decisions together. It makes no sense to exclude China during the process of make strategic decisions. Now, China is the world’s third largest economy and, moreover, Brazil and India’s economic development is rapid.

It took Russia many years to overcome the obstacles to joining the exclusive G-7 group. President Medvedev has a philosophical opinion about the expansion of the group. He says that no matter how big this administrative group becomes, every country must be alert of its exclusion. “In this world, there are not only 20 countries and 20 economies. Therefore, we all have to think about how the G-20 can collaborate with those countries that do not belong to this club,” Medvedev told journalists during the summit in Pittsburgh.