As Brazil’s ambassador to the European Union once put it, “there are new kids on the block” in world politics and trade. That's evident at the G20, where Brazil and other “new kids” Russia, India, and China, collectively known as the BRICs, expect to have an equal voice at the table during this weekend’s summit.
“No one asks anymore: ‘What are you doing here?’ Because it’s obvious what Brazil is doing there. It has the weight,” says Ernesto Araujo, deputy head of mission at the Brazilian embassy in the Canadian capital, Ottawa.
But as their stars have risen, other less-developed countries in the G20 and worldwide have been left wayside. G20 members South Africa, Mexico, Argentina, and Indonesia – along with the world's least developed countries, which aren't even at the table in Toronto – remain overshadowed.
With developed countries focusing on – and arguing about – stimulus spending vs. austerity measures and whether to impose a global bank tax, the summit is unlikely to meaningfully address the priorities of least-developed countries: reforming the governance of international financial institutions like the International Monetary Fund to give them more of a say; loosening requirements for IMF loans; ensuring predictable aid flows; and open trade access to developed markets.
Still, the meeting gives leaders of developing countries the rare opportunity to rub shoulders and develop personal relationships with those of more developed states. The G20 has become a fixture on the global scene in which “major developed and developing players meet in formal equality at the highest level of government,” as Stewart Patrick of the Council on Foreign Relations think tank puts it.
Poorest countries struggle for influence
Mr. Araujo says the growing clout of BRIC countries is simply a sign that they are now serious actors. “The influence comes naturally – not only to Brazil, but to China, India and others," he says. "It’s not a question of radically redesigning world governance. It’s a question of finding concrete answers to the real crisis we face in a more participatory way.”
But apart from permanent member South Africa, and invitees Malawi and Ethiopia, the responsibility to represent many of the world’s poorest at the G20 will lie on the shoulders of United Nations Security General Ban Ki-Moon and representatives of the IMF and World Bank. And there are signs that the G20 will continue its history of shrugging aside the agenda of less-developed nations.
A leaked draft (pdf) of the final declaration of the summit, dated June 11, renews the G20’s commitment to “refrain from raising new barriers to investment or trade” until 2013. But it fails to set a strict deadline for the conclusion of the World Trade Organization’s Doha Development Round of negotiations. This has been a sticking point between developed and developing countries, mostly over agricultural exports and subsidies. Last year, countries promised to reach an agreement on the protracted talks by the end of 2010. That deadline seems elusive and the G20 summit draft declaration says only to conclude the talks “as soon as possible.”
Some analysts and organizations point to bailouts and state subsidies as examples that protectionism continues. A report (pdf) measuring compliance with commitments from the last G20 summit found that compliance “dropped significantly” because, in part, of national demands in the face of the economic crisis.
Merely putting development on the agenda has also been a point of contention. The draft declaration acknowledges 2010 as an “important year for development issues” and recognizes poverty reduction as an “integral part” of a resilient global economy. But many still doubt the G20 summit will achieve anything meaningful for the poorest of the poor. Issues like debt relief are simply not on the agenda.
A 2007 study (pdf) by Leonardo Martinez-Diaz, then a fellow at the Brookings Institution in Washington, found that in its first eight years of existence, the G20 served primarily as a vehicle to mobilize support for the policies of developed countries. “At the same time,” the study said, “positions favored by developing countries – especially those that would have imposed large costs on G7 firms and governments – have made little headway in the group.”
Small improvements for poorer nations
The situation has improved, experts say, as the G20 has shifted from a forum for finance ministers to one for heads of states. In Pittsburgh in 2009, G20 members agreed to increase emerging-market representation in the IMF by 5 percent. Though the quota shift has not happened yet, analysts say the G20 overall has helped close the division of interests between the global North and South, or rich and poor, hemispheres.
“You don’t see the deep North-South type of gulf,” says Alan Alexandroff, co-director of the University of Toronto-based G20 Research Group, a global network of thinkers following G20 developments. In today’s globalized economy, many of the main concerns of developing countries overlap with those of the developed. “There are differences, but a lot of the contentious issues in this lead-up have been between Europe and Canada or Europe and the United States.”
As host nation of the G20, Canada says it is prioritizing the implementation of previous G20 and G8 donor commitments. In a recent speech, Canadian Minister of International Trade Peter Van Loan offered hopeful words for developing countries, signaling that Ottawa would push back against any protectionist measures. “Canada believes that lasting economic recovery – not just in North America, but around the world – depends on free trade, not protectionism," he said.
For developing nations, the most realistic expectation will be that developed countries focus on their own agendas, but that they do so in a “development-friendly” manner, says Dirk Willem te Velde of the Overseas Development Institute in London.
“All in all, it’s important that the G20 have their own house in order, but that they do so and rebalance their economies in a way that is helpful for poorest countries as well.”