G20 must put actions to its words if it is to deliver on its consensus

Acomparison of the outcome documents from the G20 summit in Hamburg that concluded on Saturday and those produced at the Washington gathering, the first such meeting between the leaders of the 20 major economies held two months after the fall of financial giant Lehman Brothers in 2008, leads to both encouraging and worrisome observations.

After intensive diplomatic efforts from the team of German Chancellor Angela Merkel, possibly the only leader who has participated in all 12 summits, the topics put on the agenda have gone far beyond risk management, financial market regulation, financial liquidity guarantees and the urgency of reviving economic growth, which were heavily debated at the first summit.

At that time, the major task of the international community was to avoid a dysfunctional global market by engaging with emerging economies such as China to ensure the global financial system remained workable.

During the global economic recession, the most damaging one after the Great Depression in 192933, China contributed half of the global economic growth and even now the share of its contribution, according to the International Monetary Fund, stands at around 30 percent.

In return, China has gained some of its due say in international economic governance, and the renminbi has been included in the global currency basket, increasingly swapped at bilateral level and recently even bought by European Central Bank as a reserve currency.

China has taken lead in setting up new multilateral financing platforms such as the Asian Infrastructure Investment Bank based in Beijing and the BRICS bank, or New Development Bank, based in Shanghai. And it proposed and is advancing the Belt and Road Initiative as a way to stimulate global economic growth and make it more inclusive.

China’s contribution is shown in the Hamburg documents, and the 15-page declaration and several annexes show consensus was reached on pursuing greater economic openness, free trade, energy and sustainable development, the digital economy, partnership with Africa, health and the empowerment of women.

It gives the impression agreements were reached on everything except climate change, on which the US is at odds with the other members.

Despite this, the outcomes are encouraging. Compared with their vision shown at G20 summit in Washington, it is a big step forward.

However, it is clear there is still a lack of collective global leadership and political trust.

For instance, India is provoking China by sending troops across their border, the US is aggressively displaying its military might in the Asia-Pacific region, the differences between Europe and the US are expanding and also the relations between Russia and the West are unfriendly.

If political trust cannot be forged, the spirit of making compromises will not be sustained, and the G20 consensus will be only on paper.

In the documents for the G20 summit in Washington and even those held in London and Pittsburgh in 2009, phrases such as “refrain from” were frequently included and most of the G20 members delivered on their words with actions.

Now, it is obvious that such a shared political will is fading. Some members are turning to domestic market protection, geopolitical calculation and a military buildup, instead of finding ways to offer more global public goods to really turn their consensus into reality.

And it is harder for the major powers to reach compromises now. The US once again, similar to its trick with the Kyoto Protocol, confirmed its withdrawal from the Paris climate change agreement. That is damaging to international cooperation as every other country believes the biggest economy should be a trustworthy partner and therefore should implement the deal as agreed.

The situation is worrying. If political trust cannot be forged, the spirit of making compromises will not be sustained, and the G20 consensus will be only on paper.