By Kyle Ferrier
Five years have passed since South Korea served as the G-20 host in 2010, yet contributions from its presidency of the multilateral economic forum are crucial to this year’s talks. This week’s G-20 summit in Antalya, Turkey is underpinned by months of dialogue between a range of government officials from all parties involved, including invited countries and international organizations. Moreover, it is also built on the contribution of agenda items added by rotating host countries at each previous G-20 meeting since Seoul. This year the Turkish government has included what it deems as the three “I’s” of its presidency: inclusiveness, implementation, and investment for growth. In 2010 the Lee Myung-bak administration chose to concentrate on development and global financial safety nets. The continued importance of the former will be examined below, while the latter will be separately analyzed in my next blog post.
Development may have been officially added to the G-20 agenda in Seoul, but its origins within the forum can be traced to the Toronto summit that took place during South Korea’s chairmanship of the G-20. The inclusion of development on the agenda symbolized the organization’s shift from primarily managing the global financial crisis to global economic governance. At the Toronto summit in June 2010 the G-20 Development Working group was formed, chaired by South Korea and South Africa. Through this leadership role Korea proposed ideas such as a nine-pillar development agenda to address the areas most vital for sustainable growth and a multi-year action plan to implement these ideas, which would form the framework for the Seoul Development Consensus for Shared Growth adopted that November.
Despite some early difficulties, G-20 work on development has played a key role in addressing core issues that have proven too divisive in other multilateral economic institutions. The precarious sovereign debt crisis in Europe overshadowed all other agenda items at the next meeting of leaders in Cannes, yet an agreement on increasing food security and reducing volatility in food prices were the most prominent initial successes for the G-20 development agenda. These issues were brought more to the forefront in Los Cabos in 2012 as the market downturn in Europe was increasingly under control and as Mexico’s chairmanship focused the agenda on food security, infrastructure and inclusive green growth. The 2013 St. Petersburg summit highlighted the work of the multi-year action plan for the original nine pillars outlined in Seoul Development Consensus and inclusive green growth. Out of the 67 original commitments made in 2010, roughly half were assessed as completed, half ongoing, with only one area concerning environmental safeguards considered as stalled. Also issued was the St. Petersburg Development Outlook delineating the course of the development agenda to focus on five core issues, building on the work advanced in Seoul. Last year in Brisbane a Food Security and Nutrition Framework was adopted, leaders committed to reducing the costs of remittances, and developing countries were more engaged in Base Erosion and Profit Sharing (BEPS) talks intended to close gaps in international tax rules benefiting multinational corporations at the expense of local government revenues.
Addressing challenges facing low income developing countries and a monitoring mechanism to ensure accountability were at the core of this year’s agenda. As part of Turkey’s priority for inclusiveness, youth unemployment has featured prominently . Countries hoped to reduce youth unemployment through encouraging growth of SMEs and their integration into global value chains. The remaining “I”, investment, saw the development of country-specific investment strategies to attract private sector funds, including reforms to improve the investment climate. Talks this year have further advanced past initiatives such as BEPS and food security, with the first meeting of G-20 Ministers of Agriculture since 2011.
On its own merits South Korea’s addition of development to the G20 agenda has clearly been crucial to talks since, yet its importance may be best demonstrated in relation to the steep challenges faced by other institutions when attempting to resolve development concerns. The continued inability of the WTO to close the Doha Development Round (DDA), originally intended to be finished by January 2005, is directly attributable to the divide between advanced and emerging economies on development issues such as the special and differential treatment for developing countries and agriculture, both of which are being progressed in the G-20. The split on these issues and the organization of WTO rounds defined by a singular undertaking, in which nothing is agreed until everything is agreed, along with the sovereign equality in voting for its large, diverse membership has made any agreement quite elusive. This has catalyzed a shift in the shaping of trade norms away from the multilateral level to bilateral and plurilateral agreements.
The last attempt to create a comprehensive multilateral agreement on investment was conducted in the OECD in the late 1990s. Despite being a selective plurilateral institution, the OECD attempted to multilateralize its own liberal investment norms by reaching an agreement between a critical mass of countries, constituted by its own membership, which would then result in a cascade of adoption of these policies among other countries. However, the intentional omission of developing countries from the talks to engender a more ambitious agreement was ultimately its undoing in 1998. Though there are some investment-related multilateral agreements, such as the agreements on Trade-Related Aspects of Intellectual Property Rights and Trade-Related Investment Measures, much like trade, the momentum has shifted away from multilateralism. Sustained work on investment in the G-20, especially as it relates to infrastructure, plays a significant role in fostering global cooperation on this issue, which also poses a challenge in the WTO.
Although institutions such as the WTO and OECD continue to be vital to global economic governance and norms, the structure of the G-20 allows it to make headway on development issues where other institutions cannot. The G-20 not only represents the vast majority of OECD states, with a number of states falling under EU membership, but also key emerging economies whose leadership of developing country coalitions in the WTO, such as the G-20 developing countries and G-33, has contributed to the deadlock in the DDA. By presenting the leaders of the largest emerging markets the opportunity to voice their concerns and addressing the issues piecemeal, the G-20 has been an ideal forum for pushing through work on economic norms as they relate to development. In this regard, the addition of development to the agenda at the Seoul summit should be regarded as one of the most significant legacies of the G-20.
Kyle Ferrier is the Director of Academic Affairs and Research at the Korea Economic Institute of America. The views expressed here are the author’s alone.
Photo from the U.S. Mission to the United Nations Agencies in Rome’s photostream on flickr Creative Commons.
 The nine issue areas are infrastructure, private investment and job creation, human resource development, trade, financial inclusion, growth with resilience, food security, domestic resource mobilization and knowledge sharing.
 These are food security, financial inclusion and remittances, infrastructure, human resource development, domestic resource mobilization