Friday, October 29, 2010

Smart inclusion: South Korea's role in the G20 outreach initiative


By Vadim Piatov
Seoul National University

The Republic of Korea will be hosting the G20 Leaders Summit at a critical juncture. This forum gained legitimacy when member states came together during turbulent and uncertain times, successfully preventing another global depression. 

The G20 is first and foremost a process: it is new, dynamic, and ever changing. As the dust begins to settle from the Financial Crisis fall out, both members and non-members must now decide how to evolve this process to the next phase. For the G2o to perpetuate, it must evolve beyond a multinational crisis management group. It is crucial for Korea, as the host nation, to institutionalize its effectiveness and legitimacy by evolving the G20 process.

The change in the balance of power brought in by the evolution of the G7 into the G20 has made the process more inclusive. However, despite these changes, the G20 still suffers from democratic deficit and legitimacy. It is still an exclusive grouping of powerful countries, who has self-designated itself as the “premier forum for our international economic cooperation,” while excluding the majority of countries of the world. Therefore, it is likely that the G20 will continue to focus on financial matters. Issues like poverty reduction and sustainable developments are likely to stay off the agenda, acting as a source of friction with non-members.

Non-member outreach is important in order to include their interests and gain their support for the specific policy initiatives. The credibility and, thus, the legitimacy of the G20 is embedded with its ability to execute and coordinate relevant polices preventing future crises. Korea must ensure that the political will remains well behind previous agreements, while constantly evaluating their effectiveness and presenting alternatives. Perhaps this is the best strategy for credible outreach: effectiveness.

Given its own recent transformation, Korea is well placed to bring the concerns of emerging markets and developing countries to the G20 Agenda. It has shown this through emphasizing the financial safety nets to help safeguard emerging markets from systemic instability and actions focusing on closing the development gap, especially among the poorest nations. Korea has also hosted the Korea-FSB Financial Reform Conference with views from developing markets and has already institutionalized the G20 Business Summit and the Civil G20 to get their perspective and cooperation. However, this is not enough.

Korea needs to further strengthen the institutional foundations of the G20 process by drawing on the wealth of experience gained from not only the last decade of Finance Ministers meetings but also other multi-national organizations such as ASEAN, APEC, OPEC, and even NATO. Korea must institutionalize “Smart Inclusion”: enhancing the voice and support of non-members whilst not increasing membership.

To achieve this aim, Korea should introduce and institutionalize the “G20 Outreach Framework” shown in Figure 1.
The central part of this framework is to hold a series of Regional Forums (7 dark Blue rectangles) before setting the Agenda. The end of the crisis atmosphere will result in fewer annual Summits, thereby placing the emphasis on the quality and inclusiveness of the Communiqes. This means that the G20 should have a more systematic and comprehensive approach to prioritizing the Agenda with a focus on long term sustainability, balanced growth and development. The Regional Forums as well as the G20 Business Forum and the Civil G20, should be included during this crucial time in the process so they can influence the Agenda and its content.

The Regional Forums should extend an invitation to all the nations in that region and chaired by the G20 Hosting Nation (in this case Korea). Key concerns and proposals should be tabled and then amalgamated from the other forums to then be turned into a document that will be considered by the G20 members when determining the Agenda and later, the working groups. By following this framework, the G20 process has systematically listened to the concerns of a wider pool of nations and in doing so will be viewed as more legitimate and relevant.

Another problem facing the G20 process is the apprehension that this group would sooner or later try to upstage the United Nations and its key decision-making role. The United Nations is the only global body with universal participation and unquestioned legitimacy. 

The G20 should not only recognize and reflect this reality, but should also ensure that its actions and decisions complement and strengthen the United Nations. Korea, as the host, should accept the Global Governance Group (3G’s) proposal to deepen its relations with the UN and institutionalize the UN secretary-general at summits and preparatory meetings in the same way that IMF, World Bank and WTO are currently present. The G20 should concern itself with building consensus around the broad principles that would constitute workable multinational agreements, to support the overall effectiveness of the UN.

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