G20 Summits Distinguish Themselves By Getting Things Done

It’s a familiar pre-summit scene.

The metal barricades have been clamped down around Steel City and the police are on every street corner, in the air, and in the water. The protesters are taking crash courses on how to disrupt global talks without getting arrested, while the hotel staff bustle to make everything just so, for the throngs of international officials and media flooding in.

But the two-day G20 summit that starts today is not your run-of-the-mill leaders’ meeting. The photo-ops and relatively empty rhetoric about global co-operation have been ditched at G20 meetings so far.

The Pittsburgh summit is just the third such meeting of this group of rich and emerging-market economies and the preceding G20 gatherings have made key decisions that mitigated the global recession and may well have set the stage for recovery.

The test for Pittsburgh is to see if the G20 can keep the ball rolling. Can the leaders agree to how to make sure the delicate recovery takes hold and doesn’t disintegrate into another downturn? And can they adopt a framework that will prevent such financial crises from happening again?

“The G20, as a crisis committee, it looks good,” said Andrew Cooper, associate director at the Centre for International Governance and Innovation, based in Waterloo, Ont.

“The question now is whether G20 declares victory or not,” he said in an interview en route to Pittsburgh.

The first G20 summit led by former U.S. president George Bush in Washington during the last days of his tenure last November, and the follow-up summit in April in London, forged an unprecedented agreement among countries to buoy up their flailing banks. Leaders promised and delivered low interest rates and stimulus packages worth two per cent of their gross domestic products.

The co-operation helped restore global confidence that was eroding so quickly that it was compounding the problems caused by the global financial crisis, Cooper said. And the stimulus measures are now supporting a tenuous recovery in many countries.

Indeed, Toronto-Dominion Bank raised its forecast for global growth on Wednesday, saying the world economy will expand by 3.8 per cent next year – a full percentage point more than the bank’s last forecast just three months ago.

But the TD forecast also predicts that the stimulus-fuelled growth in the last half of 2009 won’t last into 2010. While the bank’s economists don’t predict a so-called “double-dip,” the fear of a second bout of recession is hanging over the heads of the leaders as they meet in Pittsburgh.

“The world does have to be wary of a double dip,” TD’s chief economist, Don Drummond, said in an e-mail interview. “There isn’t much driving growth in the world yet other than the extraordinary monetary and fiscal programs.”

Labour leader Ken Georgetti will be meeting Prime Minister Stephen Harper on Thursday to make that point, reflecting conclusions reached by a parallel G20 labour summit in Pittsburgh on Wednesday.

“This crisis is far from over,” Georgetti said. “I think there’s another one coming.”

Harper has made it clear he wants countries to discuss how to wind down their stimulus packages, but that any withdrawal of stimulus right now is premature given the precarious nature of the economic recovery.

The prime minister said a lasting recovery requires countries to keep their borders open to trade, reform oversight of financial institutions and keep the stimulus money flowing.

“We are seeing some recovery but it’s very fragile, so it’s important that we stay the course,” he said Wednesday in Oakville, Ont.

The prime minister arrives in Pittsburgh on Thursday afternoon after a brief meeting with a small group of leaders in New York on the future of Pakistan.

He’ll have dinner with the other G20 leaders at the Phipps Conservatory and Botanical Gardens in Pittsburgh, a site chosen to highlight the transition of the city from steel town to green hub. On Friday, he’ll spend the day negotiating with the other leaders at a downtown conference centre.

Most of the G20 leaders are coming to Pittsburgh straight from climate meetings in New York, where China startled the word by committing to a reduction in the growth of greenhouse gas emissions. The Chinese move may prompt U.S. President Barack Obama to respond with a significant gesture in Pittsburgh on financing climate change in developing countries, John Kirton, director of the G20 Research Group at the University of Toronto, said in an interview.

Harper, however, will be coming from Oakville, where he was welcoming the Tim Hortons head office back to Canada and engaging in a spat with the Liberals over what he should be focusing his time on.

The Liberals say Harper should have been in New York.

“I love my double-double as much as the next guy,” said Liberal David McGuinty. “But examining the latest in doughnut technology while the rest of the world’s leaders gather to confront the challenge of climate change is like Nero’s fiddling while Rome burns”.