BY PERRIN BEATTY, THE OTTAWA CITIZEN
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The G20 welcome signs proclaiming “History is being written in Cannes” now seem ironically correct. History was indeed made, but more for what the summit didn’t accomplish than for anything it did.
The French government hoped the leaders could develop policies on issues like green growth and youth unemployment. Instead, the summit became a sideshow while Greece sorted out its on-again, off-again commitment to a referendum that would almost certainly have forced it from the eurozone. It lurched away at the last minute, but the country faces hard times, economically and politically, for years to come. And there is no certainty that this small economy won’t drag the world back into recession.
The G20’s most important message isn’t in the final communiqué; there is very little to be found there. The real lesson is the impotence of international gatherings and institutions in solving important issues.
The Copenhagen climate change conference collapsed in disorder in 2009. The WTO’s Doha Development Round is stalled, with participants now trying to salvage progress on less divisive areas such as trade facilitation. And eurozone countries struggle to contain the debt
contagion threatening their governments and banks.
The G20 offered hope for concerted, coherent responses, bringing the 20 most important economies together to head off crises and promote global confidence and growth. It worked that way in Washington, when the world was headed for recession or possibly worse. Heads of
government promised to stimulate their economies and forswore new trade barriers. The package helped moderate the recession by showing world leaders both could and would act together.
That was just three years ago. As the recession slowed, G20 members lost interest in their commitments and new undertakings became less substantial.
Cannes lowered the standard further. No leader denied that developments in Greece and growing concerns about Italy could revive the recession, but they left without agreeing on who had the responsibility to act, let alone developing a plan. The patchwork Greek bailout had calmed markets for less than a week. Its authors received little support from Britain, the United States or the BRIC countries (Brazil, Russia, India and China), all of whom urged euro member countries to fix their problems themselves.
It is not surprising that the United States was more evident in the photo ops than in the debates. U.S. President Barack Obama carries the burdens of war, lagging economic growth and deep political division. It’s hard to assert global leadership when you can’t get Congress to pass a bill on jobs.
The risk of a renewed recession is at least as much political as economic. It’s about leadership and trust. As long as our problems seem larger than our leaders, markets will be driven by the daily headlines, business will withhold investments needed to restore economic growth, and voters will remain angry and divided.
What are the lessons, already evident before Cannes, but confirmed by its failure?
First, forget about “delinkage.” Despite our inability to develop global responses, we are interconnected as never before.
Second, antiglobalization protesters have it exactly wrong. Instead of being controlled by a cabal of nations and companies, world affairs are remarkably uncoordinated, with countries imposing beggar-thy-neighbour national responses to global issues.
Third, the billions of people in the world’s fastest-growing economies will no longer sit outside the room while others decide their fate. But they see the problems through a very different lens, making consensus infinitely more complex just when it is most urgently needed.
Fourth, the most important issues, whether avoiding recession, fighting terrorism or protecting the environment, won’t solve themselves. They require energetic, visionary responses before confidence can be rebuilt.
Canada is a small player in the unfolding drama, but our impact can outstrip the size of our population or our economy. We helped create the G20 and performed relatively well during the recession. Prime Minister Stephen Harper is one of the most long-standing leaders around the table, with a recent mandate and parliamentary majority that allow him to focus on international affairs.
At some point, the world will move beyond the present impasse. The question is when, and how high the price will climb before we see the leadership needed. If there is good news here, it is that few still deny the crisis is growing.
That may be the spur Europe needs to make its federal structure more functional, and it may cause politicians who are more focused today on short-term political survival to recognize that the approaching storms threaten all of us and we need to find shelter together.
Perrin Beatty is president and CEO of the Canadian Chamber of Commerce. He represented Canada at the B20 meetings of business leaders held alongside the G20 summit.
