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Analysis

The Shortcomings of the G20 Los Cabos Summit

John Kirton and Julia Kulik, G20 Research Group
June 27, 2012

Despite its significant success in general, and its important advances on many key fronts, there were several shortcomings at the Los Cabos Summit, some of which could be serious in the medium and longer terms.

Fossil Fuel Subsidy Phase-Out

The first shortcoming was the failure to take significant steps to implement the G20’s promise at the September 2009 Pittsburgh Summit to reduce and phase out inefficient fossil fuel subsidies in the medium term. The Los Cabos Summit, in paragraph 74 of the G20 Leaders Declaration, did recall and reaffirm the promise and mandate some small steps to encourage implementation, which hitherto had been slow. It asked the G20 finance ministers to report on progress at the next summit and to “explore options for a voluntary peer review process for G20 members by their next meeting,” while welcoming “a dialogue on fossil fuel subsidies with other groups already engaged in this work.” Still, it specified neither a deadline nor interim benchmarks for the phase-out, even though the G20 was more than halfway to the “medium term,” generally understood to be five years, arriving in 2014 or fast approaching the medium term in this specific context, understood to be 2017. Nor did the Los Cabos leaders specify what subsidies should be included — consumer, producer or regulatory ones, including those embedded in state-owned monopolies of the sort that Los Cabos host Mexico had with Pemex.

The probable key cause of this shortcoming was the absence of an oil shock. With world oil prices dropping about 25% in the months leading up to the summit, there was no acute pressure to reduce the strain on government budgets brought by such soaring prices and thus subsidy costs, especially for key G20 members such as India. The argument that when prices are low is the best time to reduce subsidies without angering voting consumers and creating inflationary effects took second place.

A second possible cause was the absence of the International Energy Agency at the summit table and of a G20 energy ministers meeting or forum, despite the many multilateral organizations attending Los Cabos and the many ministerial meetings hosted by Mexico during its G20 presidency leading up to the summit. A third possible cause was the absence from the U.S. government of Lawrence Summers, who had been an important promoter of the Pittsburgh pledge.

Whatever the precise process-tracing causes, this shortcoming had serious costs in several ways. The first was on fiscal consolidation, as fossil fuel subsidies cost hard-pressed government treasuries and tax payers almost half a trillion dollars. A second was the cost to controlling climate change, as such subsidies cause an estimated 10% of carbon emissions to be released into the atmosphere each year. A third was the cost to human health, especially of poor mothers and children who are sickened and killed by the pollutants from such overused fuels in inefficient cooking stoves. The fourth was the cost to combating corruption, which such subsidies routinely create, as the case of Nigeria shows. The fifth was the cost to reducing incoming inequality, as such subsidies transfer income from the poor to the rich. Other costs came for development and green growth.

The Contribution of Academic Community

The second shortcoming, once again in the realm of noncompliance with a previous G20 summit commitment, was not moving to recognize or mobilize the contribution of the academic community in G20 governance. At the conclusion of the communiqué issued at the Seoul Summit in November 2010, G20 leaders explicitly committed to working more closely with the business, labour and academic communities. Subsequently, at Cannes in 2011 and especially at Los Cabos, they did so with business and its B20 a great deal (paragraphs 24, 56, 73, 78, 83) and with labour (paragraphs 24, 83) but not with academics (although education, in paragraphs 12, 20 and 52, and science, in paragraph 60, were mentioned). At Los Cabos, all the approval that academics got from G20 leaders came in a statement by British prime minister David Cameron, highlighting the value of a study by the University of Toronto in monitoring G20 members’ compliance with their summit commitments. Beyond that, academics appeared only among the multi-stakeholder participants at “Rethinking the G20” conference sponsored by the Mexican government on the eve of the summit on June 17, as an unspecified part of “civil society” in general in the declaration and in the “Task Force Conclusion of the G20 Strategies on Youth Employment” released at Los Cabos in association with the leaders’ declaration.

The virtual absence of academics reflects the absence of shocks appropriate for academics and their fellow scientists in the broader epistemic community distinctively to solve, such as climate change in the early years. It also reflects the absence of multilateral organizations such as UNESCO. The references to the inherited B20 and L20 and Mexican-created Think 20 and Youth 20 in paragraph 83 may have crowded out those to academics. And, with notable exceptions such as Italy’s Mario Monti, few G20 leaders at Los Cabos had a history as academics, as university professors or administrators.

The costs of abandoning the academic community were many. As a professional community, academics can contribute to G20 governance in the three major ways: first, by autonomously exploring how well and why the G20 works; second, by continuously and transparently informing and educating all about its work; and third, by assessing its members’ compliance with, and the results of, the commitments it makes (Kirton 2012a). Beyond these contributions in analysis, transparency and accountability, academics can assist in such G20-specified areas as youth employment and entrepreneurship, and in addressing newly recognized or salient “wicked problems” where epistemic communities are required to define the problem and policy options before effective action can take place.

Health

The third shortcoming was the virtual absence of attention in the main declaration to human health. This was a sharp drop from the slender treatment this subject had been given at G20 summits in the recent past (see Appendix). At Los Cabos the only reference to health was a single word on “malnutrition” as part of the food security section. Beyond that, health was embedded in an unspecified form in one general reference to the Millennium Development Goals (MDGs).

The key cause of this lack of attention was the absence of any severe global health shocks in the seven months prior to the summit. The deadly “swine influenza” that had struck Mexico and its North American neighbours of the United States and Canada, hit too long before the summit to have an effect on it (Kirton and Guebert 2010). The memory of the swine flu shock did lead President Felipe Calderon to invite Margaret Chan, director general of the World Health Organization, to Los Cabos to participate in the panel he chaired at the Rethinking conference and to present her with Mexico’s Aztec Eagle award that evening for her service during that epidemic. But in Chan’s intervention at the conference, she did not emphasize the need for the G20 to take up health. Nor did she seem to do so in private — in sharp contrast to her predecessor Gro Harlem Brundtland at the G8 Okinawa Summit in 2000, where the Global Fund to Fight AIDS, Tuberculosis and Malaria was conceived. Moreover, Chan was not present at the G20 summit table, unlike Brundtland at the G8 summit in Genoa in 2001, where the Global Fund was born.

Among the G20 leaders, none had previously served as a minister of health. Only Brazil’s Dilma Rousseff — a cancer survivor — had attended the United Nations high-level meeting on the prevention and control of non-communicable diseases (NCDs) in September 2011.

A further cause was the absence of any civil society actors at the summit table, beyond three representatives of the B20 at breakfast on Tuesday morning, the second day of the G20 summit. This was a downgrade from Cannes, where Bill Gates had presented his report on innovative financing. The report contained a call for sharply higher cigarette taxes, which the summit did not endorse.

The omission of health at Los Cabos was costly in several ways. The first was fiscal consolidation, as soaring public healthcare costs — especially from NCDs among aging populations and in a United States that had just expanded public health care — threatened to overwhelm any measures of austerity elsewhere. Yet the Los Cabos G20 dealt with pensions only and not their costly companion social protection programs of health care. The second cost came in human life, as NCDs alone kill 36 million people each year. The third cost came in development, as NCDs are rapidly becoming the number-one killer not only in advanced and emerging countries but also in developing ones. It was thus understandable that NCDs had come onto the G20 summit agenda, however briefly, as part of the Seoul Development Consensus appended to the declaration at the Seoul summit in November 2010. A fourth cost came in the broader acceptability and legitimacy of the G20 summit, as it missed this opportunity to endorse the UN’s high level meeting on NCDs or the three (of eight) health-related MDGs whose due date for delivery was rapidly approaching in 2015.

Young Entrepreneurship

The fourth shortcoming concerned young entrepreneurship as a concept and issue and of the Young Entrepreneurs Summit (YES) and Young Entrepreneurs Alliance (YEA) as an institutionalized component of civil society that could contribute to G20 governance, alongside the established big business in the B20 and other civil society communities recognized in the communiqué (Kirton 2012b). “Young entrepreneurship” was entirely absent. “Youth” received only three references, in paragraphs 20 and 21. “Entrepreneurship” received one, despite the declaration’s strong emphasis on jobs. More broadly, “innovation” received five references and small and medium-sized enterprises received three.

This omission can be attributed once again to the absence of substantively similar shocks. Youth unemployment, recognized as a serious problem in the declaration and spiking to historic highs in Greece and Spain, had not yet led to serious, spreading, escalating deadly civil strife. British cities had not been set ablaze by disaffected youth since August 2011, and the Occupy movement in the United States was small and fading. No multilateral organizations were dedicated either to youth or entrepreneurship, and the approach of the International Labour Organization to employment was a classic 1919-like one. Virtually none of the G20 leaders at Los Cabos had ever been a young entrepreneur. And at the level of civil society, both the B20 and the L20 took place at the same time and place as the G20 summit, while YES took place in Mexico City two weeks before. The B20 was sufficiently influential on its own in Calderon’s summit not to need YES or advance the specific cause at the summit and in its communiqué.

The costs here were high. Economically, young entrepreneurship was the best way to create short-term jobs and longer-term innovation, productivity and competitiveness, at a time when deficit-ridden governments could not, and uncertain big business would not. The benefits for social and political cohesion and stability were also great. These benefits, as well as the value of young entrepreneurship were well and directly recognized in the G20 Labour and Employment Ministers’ Conclusions from their meeting in Guadalajara on May 17-18 and Task Force Conclusions of the G20 Strategies on Youth Employment, which were both released at the Los Cabos Summit. But despite their equal attention to jobs alongside growth and their focus on youth unemployment in particular, the leaders at Los Cabos did not upgrade young entrepreneurship to the top level by including it in their own declaration.

Women in the Mainstream

The fifth shortcoming was the absence of women, girls and gender in the majority mainstream of the G20 Leaders Declaration, agenda and actions. Beyond a brief appearance in two sections, in regard to employment and financial inclusion, women and girls were missing in attention and action, even on issues such as food security and nutrition, where their relevance was central, direct and well known. This last point was confirmed, in the context of Los Cabos, by the direct reference to mothers, women and gender inequality in regard to food security in paragraphs 25 and 29 of the 2012 Progress Report of the Development Working Group, which the Los Cabos leaders’ Declaration explicitly endorsed.

The absence of women in the mainstream majority was due to the lack of any obvious gender shocks in the lead-up to the Los Cabos Summit. It also flowed from the absence of any multilateral organizations dedicated to gender issues or any such smaller UN components, such as UN Women, at Los Cabos in any capacity at all. Nor were any of the leaders at Los Cabos identified in previous stages of their careers as committed to the cause of women, in the way that, for example, U.S. secretary of state Hillary Clinton had been before she became a presidential candidate and foreign minister. The Los Cabos leaders lacked not just commitment but also comprehension, in the sense of sensitivity to the contribution of and impact on women to and from most issues they addressed. The civil society components endorsed by the leaders and their declaration — namely the B20, the L20, the Think 20 and the Youth 20 — were largely male-dominated and -led. As an independent initiative, the G(irls)20 was somewhat of a ghetto, unable to advance the cause of women and gender equality at the leaders’ table in their relevant relationships and roles. A civil society effort to rank G20 countries according to their gender equality received some attention, especially in Canada, which came in at the top.

A deeper look into the G20 system reveals that the Los Cabos host’s foreign minister, sherpa and foreign affairs sous sherpa were all women, and skilled and influential ones. But the G20 finance ministers, central bank governors and other ministerial forums had few women among their ranks. The women leaders from G20 countries at Los Cabos (Germany’s Angela Merkel, Argentina’s Cristina Kirchner, Australia’s Julia Gillard and Brazil’s Dilma Rousseff) and the one from an international organization (the International Monetary Fund’s Christine Lagarde) could only do so much.

More broadly, if one considers the G8 and G20 summits as synergistic twins operating according to an agreed upon division of labour in global governance since 2009, then the G20 Los Cabos leaders appropriately put the women into its finance and economics core but nowhere else, while the G8 Camp David leaders a month earlier had appropriately put them into almost everything else in its development and security domains, but not in finance and economics (Kulik and Kirton 2012). However, since each summit in practice governed global economics, development and security — especially as the Los Cabos G20 added proliferation of weapons of mass destruction to its longstanding concern with terrorist finance — women still have a long way to go to get their full-strength place in each.

References

Kirton, John (2012a), “Academics, Analysis and Accountability: Contributions to G20 Governance,” paper presented at an international conference on “Global Governance for the Next Generation: Building on the Los Cabos G20 Summit,” sponsored by the Instituto Technologico Autonomo de Mexico (ITAM), the Institut d’Etudes Politiques de Paris (Sciences Po), the National Research University Higher School of Economics of Russia, the G20 Research Group of the University of Toronto, the Centre for International Governance Innovation, and Newsdesk Publications, ITAM, Mexico City, April 26, 2012.

Kirton, John (2012b), “Connecting Young Entrepreneurship with G20 Governance: Innovations in Policy and Process,” paper prepared for a conference on “Young Entrepreneurs: Building Dynamic Businesses that Foster Growth and Job Creation,” G20 Young Entrepreneur Summit Mexico 2012, Mexico City, June 2-5, 2012.

Kirton, John and Jenilee Guebert (2010), “North American Health Governance: Shocks, Summitry and Societal Support,” NorteAmerica 5(1): 221-224 (January-June).

Kulik, Julia and John Kirton (2012), “At the G8 Camp David Summit, Where Are the Women? Everywhere!” G8 Research Group, May 20, https://www.g8.utoronto.ca/evaluations/2012campdavid/kulik-kirton-women.html.

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Appendix: G20 Summit Conclusions on Health, 2008-2012

Zaria Shaw and Sarah Jane Vassallo G20 Research Group, June 25, 2012

Notes:

Data are drawn from all official English-language documents released by the G20 leaders as a group. Charts are excluded.

“# of Words” is the number of health-related subjects for the year specified, excluding document titles and references. Words are calculated by paragraph because the paragraph is the unit of analysis.

“% of Total Words” refers to the total number of words in all documents for the year specified.

“# of Paragraphs” is the number of paragraphs containing references to health for the year specified. Each point is recorded as a separate paragraph.

“% of Total Paragraphs” refers to the total number of paragraphs in all documents for the year specified.

“# of Documents” is the number of documents that contain health subjects and excludes dedicated documents.

“% of Total Documents” refers to the total number of documents for the year specified.

“# of Dedicated Documents” is the number of documents for the year that contain a health-related subject in the title.

This report catalogues all G20 final statements, referred to as “conclusions”, related to the issue area of health. It refers to all official statements and annexes released by the leaders, as a group, at each G20 leaders’ summit since their beginning in 2008 to the present. Health is defined as the human condition of being sound in mind, body and spirit, and being free from physical disease or pain. This definition becomes more complex when health is considered in terms of its economic effect, as is the case with the heavy burden of HIV/AIDS in sub-Saharan Africa. The G20 are working to support the health-related Millennium Development Goals and to ensure more equitable, affordable and available healthcare for populations worldwide. The following keywords were used for this report: Antiretroviral treatment, avian influenza (flu), biological pathogen, bird influenza (flu), cholera, communicable diseases, disease, DNA, drugs (medical), Ebola, epidemic, famine, guinea worm, health, healthcare, HIV/AIDS, human influenza (flu), hunger, infectious disease, malaria, malnutrition, measles, Millennium Development Goals (MDGs), nutrition, pandemic, pneumonia, polio, river blindness, severe acute respiratory syndrome (SARS), tuberculosis, vaccine, virus, World Health Assembly (WHA), World Health Organization (WHO). Exclusions: Bioterrorism

n (WHO). Excluded is bioterrorism.

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