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Analysis

A Summit of Very Substantial Success:
G20 Governance of the Global Economy and Security
at St. Petersburg

John Kirton, Co-director, G20 Research Group
September 6, 2013

The G20 leaders at St. Petersburg have produced a summit of very substantial success, marked by many advances on a broad pre-planned economic agenda and by a historic innovation in addressing the burning security crisis of the day — the shock from Syria where chemical weapons were used on a significant scale. On stimulating growth for a slowing world economy, the summit moved toward coherent growth strategies backed by credible medium-term fiscal consolidation and gave a new emphasis to jobs, as well as inclusion and the contribution of small and medium-sized enterprises, young entrepreneurs and business start-ups. It also forwarded key financial regulatory reforms, resisted protectionism and started innovative work on financing for investment with the private sector integrally involved. On Syria it showed that the G20 leaders and the St. Petersburg Summit were the proper people and place to deal with central security shocks, rather than leaving it to officials from the five permanent members that still dominate a deadlocked United Nations. The summit also took a substantive step toward a solution to the escalating conflict in Syria, as all 20 leaders now agreed that chemical weapons had been used on August 21st and a fundamental international norm had thus been breached.

The Security Agenda

Syria dominated the St. Petersburg Summit, both in the discussions among the leaders and their delegations on the first day, and in the attention of the media and citizens around the world for a longer time. The leaders showed that the G20 summit, initially designed as an economic institution, was now a full-strength centre of global governance, able and willing to address not just newer security threats such as corruption and terrorism but also more classic ones such as the use of chemical weapons by a government against its own people. Following the August chemical weapons attack in Syria, and the denials and divisions among major powers in the following two weeks, Russia's Vladimir Putin as summit host suddenly invited G20 foreign ministers to St. Petersburg and then added to the leaders' opening dinner at the summit a three-hour discussion dedicated to Syria where every leader had a say. This allowed about half the leaders an opportunity to express strong support for the approach of "deter and deny" through limited missile strikes led by the presidents of the United States and France. Support came from the leaders of a domestically constrained United Kingdom, an instinctively reticent Japan, a long cautious Germany facing an election on September 22, a long reluctant Canada and an initially doubtful Italy, as well as Turkey as an ally in the North Atlantic Treaty Organization and a front-line state, and Saudi Arabia as a leading regional power. There seemed to be slight accommodating shifts in Putin's behaviour and position, as he suspended deliveries of Russia's sophisticated S-300 missile to Syria and did not deny that chemical weapons had been used there. There further emerged a common condemnation of the use of chemical weapons and consensus that they should not be used again by anyone, and not become a regular weapon of war. Should these advances politically deter and degrade Assad regime even before U.S. missiles fly or speed a transition to a less violent Syria, the St. Petersburg Summit will prove to be a striking substantive as well as institution-strengthening success.

The Economic and Social Agenda

On its broad pre-planned, the summit generated its well-planned and thus readily predicted substantial success. To stimulate a slowing global economy, it offered a credible growth approach, backed by low-cost, structural stimulus in the short term and credible if country-specific plans for fiscal consolidation in the medium term. The latter were rendered more credible by the tax revenues that would flow from the G20's agreement on tax fairness, to ensure rich individuals and firms pay the taxes they owe in a globalized world, and that automatic information exchange, adherence to a multilateral convention and new rules on multinationals' transfer pricing would arrive in a few years. Further reinforcement came from the growth-generating agreement to extend the G20's anti-protectionist pledge until 2016 and spur a trade facilitation deal at the World Trade Organization's Bali ministerial meeting in December.