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Think 20: the role of think tanks in the G20 process

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In Brief

Think tanks from around the world convened on 27–28 February at the Think 20 meeting in Mexico City to discuss various issues for the upcoming G20 Summit in Los Cabos.

The Mexican G20 presidency and the Mexican Council on Foreign Relations jointly hosted the meeting, in which four broad topics were discussed: finance and economics, green growth, food security and commodity-price volatility, and the role that think tanks can play in making the G20 more effective.


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On the topic of finance and economics, there is a need to balance long- and short-term agenda items. Longer-term agenda items are likely to include continued financial regulatory reforms and other changes to international financial institutions as well as growth and employment, whereas the short-term agenda will focus on containing the European crisis. For the short-term agenda, four lessons can be learned from previous international crises. First, the ability to access foreign reserve currencies and the importance of regional and global safety nets must be emphasised. Second, aggregate demand must continue to be leveraged despite the much-deleveraged financial sector. ‘Expansionary contraction’ is a mistake and the Mexico summit should involve efforts to move away from this approach. Third, adjustments for debt restructuring must be made symmetrically, where creditors countries should adopt expansionary policies while debtor countries try to consolidate. Fourth, structural reforms and adjustments must be implemented in the medium and long term. At the same time, the upcoming summit agenda should not be hijacked by European crisis-management, as solving it is not within the control of all G20 member countries. The G20 needs to also focus its efforts on how to insulate non-European countries from spillover effects. Members may thus push the IMF to increase both its funding and its firepower to assist in containing the crisis. Although it was not much discussed at the Think 20 meeting, trade financing has also become an issue in Non-European countries affected by the European crisis.

In tackling green growth, the Cancun conference, the Durban conference and the upcoming Rio+20 meeting (to be held following the G20 Summit) are each building momentum for the green growth agenda. For Mexico, green growth cuts across other issues — such as food security, green jobs, financialising nature, phasing out fossil-fuel subsidies and energy savings. However, despite its ambitious green agenda, some G20 countries are more critical about the real contribution of this agenda to the framework of strong, sustainable and balanced growth (FSSBG). The key here is finding how to link green growth to FSSBG without adding a new agenda. Green growth must not mean constraining growth, introducing environmental regulations, nor imposing new norms or standards, but instead supporting growth with different perspectives. The issue of financialising nature through mechanisms such as carbon trading or carbon taxation is crucial. Green growth is also a people-centred and decentralised issue, which, although global, must start with local solutions.

Although a successful integration of green agenda into FSSBG will bring legacy to the Mexican Presidency, some countries are still concerned where this agenda is leading to. While green growth has multiple policy interpretation and relevance to different countries, it also has multi-layered domains, from United Nations Framework Convention on Climate Change (UNFCCC) to Rio+20 meetings. Hence, what the G20 can deliver effectively in this agenda must be clear.

On the issue of food security and food-price volatility, there is also a need to balance long- and short-term issues. Long-term issues include increasing agricultural productivity in increasingly stressed resources through research, and biofuels — which have increased world market prices of key agricultural products. Africa is seen as the key to the food security issue, but is often left out or underrepresented at the G20. Short-term issues include the financialisation of commodities, which has been linked to commodity-price volatility. Other issues include policy coherence (for example, between the UN and the G20), phasing out agricultural subsidies, transparency in disclosing how certain agreements (including the G20 Action Plan on Food and Price Volatility) are reached and empowering women farmers with insecure land tenure.

To increase the effectiveness of the process, the G20 should be made more informal, possibly with a one- or two-day retreat where leaders can ‘build chemistry’. There must also be effective consultation with non-G20 countries, rather than outreach that is little more than lip service. And it is equally unclear whether the Troika system, in which the immediate past and future G20 presidencies work with the incumbent, should be maintained, since it has not worked.

Think tanks have played an important role in the G20 process. They are an ‘ideas bank’, a source of accountability and a network of continuity. They are also able to deliver ‘buy-ins’ when leaders are not implementing the right policies despite their awareness of what the right policies are. The deep involvement of think tanks in the G20 process also helps distinguish it from the G8.

The G20 is at a crossroads and the world is watching it closely. Continuity is essential, although short-term and contingent agenda must be considered. G20 is also an extremely diverse global forum, which calls for a balance in the agenda between those issues that are more relevant to developed and developing/emerging countries. Hence, finding a balance is also essential. The role of think tanks has been contributive and must be preserved.

Maria Monica Wihardja is a researcher at the Centre for Strategic and International Studies, Jakarta, and a lecturer at the Department of Economics, University of Indonesia. She is currently on leave to work as a consultant at Bank Indonesia.

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