Commenting on the G20 Final Communiqué

 I share the frustration expressed by many regarding the outcome of the G20 just held.

The final statement reiterates many of the commitments made elsewhere. Particularly, in many United Nations meetings. As I said in the Portuguese media, the main issue is that promises are made but their implementation lacks far behind or never happens. That is the best way to undermine the leadership, be it at the county level or in the global arena. It explains why the credibility of the international leaders is so low.  

This said, it was important to bring back to the final communiqué all those points that are being discussed in the key international conferences. That includes the SDG, the climate discussions, the gender issues, the inequality problems, the respect for the UN Charter and for people’s rights. And the matters of peace and war. 

The point on the reform of the World Bank is also a wise play.  

Words and statement most be seen as significant, even when we know that human rights or any other key issues are not respected in the country whose leader has pledged to. It gives those who care and who fight for those rights a leverage point. Strength, I would say.

 

Regarding the African Union, I agree it is a crucial move. It is also a smart move for South Africa, that has now a reason to say no to Nigeria or Egypt in the G20.  

In the end, I think we should see India and others encouraging multilateral approaches and multilateralism but planning to play in small groupings and betting as much as possible in bilateral relations and pure and tough national interests.  

The ladies are in charge

Harvard professor Carmen Reinhart has just been appointed as the new Chief Economist at the World Bank. The Chief Economist at the IMF, Gita Gopinath, has also come from Harvard University. Both ladies have collaborated with Professor Ken Rogoff, from the same university. They might all think alike which is not the best approach in times of crisis. Diversity and contradictory opinions are much more creative, at a time when we have to imagine a new economic order. But they are all for debt forgiveness when the challenge is too big to be managed, which is not a bad approach. And they have studied financial crashes and deep national crisis extensively.

People say that when two economists discuss there are at least three divergent opinions. In this case, let us see if both ladies can bring fresh ideas to their institutions. The IMF and the WB will be very much in demand in many countries in the post-Covid situation. They must propose an approach that goes beyond austerity and keeps investments flowing across the globe, particularly in the direction of poorer countries.

IMF and the EU's ambivalence

The best people that could compete for the leadership of the IMF, following Christine Lagarde's departure, are not from Europe. They are from Mexico – Agustin Carsten, who is currently the General Manager of the International Bank of Settlements –, from Singapore –Tharman Shanmugaratnam, Chairman of the Singapore Monetary Authority and Senior Minister –, and from India – Raghuram Rajan, former Governor of the Indian Central Bank.  These three are head and shoulders above the names the European are putting forward as their candidates. In a better system of global governance, one of them should be the next Managing Director of the IMF.

But, again, it will be a European. This has been the game for the last seven decades. The US gets the top job at the World Bank and Europe goes for the IMF. The European will be chosen because of EU’s political considerations – the balance between the different regions of the Union – and that will be it. It might end up by being someone competent. But certainly, if we give credence to the short list that is under consideration, an intellectual pygmy compared with the names I mention above, from other parts of the globe.

This would have been an opportunity for the EU to show to the world that it means business when it talks about the reform and the strengthening of the institutions of global governance. But the EU leaders do not want to walk the talk. They prefer a narrower view and respond to their EU internal politics first.

It is a bit of a shame, isn’t it?