What happened in Pittsburgh?
Aside from a few pathetic protests? For those who may have missed it, the leaders of the G20 nations agreed, in mostly very general language, to continue to discuss and eventually agree on things like fighting protectionism, cleaner growth, tougher financial regulation, and so on.
But the most important outcome of the meeting was the agreement to replace the G8 with the G20. The G8 (or G7, or before that, G6) has been meeting periodically since 1975 to discuss coordinated response to global issues.
Why is this important? The G8 excludes China, India, Brazil, Indonesia, and other large, fast growing economies. Replacing the G8 with the G20 is seen in these countries as a major recognition of their place on the world stage, and is likely to have a significant impact on the willingness of these countries to cooperate on things like protectionism, climate change, and tax evasion.
The exclusion from these talks has been a major point of contention as these countries (particularly China) have felt left out of the world stage. Every time the G8 meet to decide the future of the world, it is seen as a snub, and in most of these countries face is important. Continued loss of face (or perceived loss of face) would likely have eventually manifested itself in non-cooperation or worse. Replacing the G8 with the G20 removes this pressure and increases the likelihood of real progress on things like protectionism, clean growth, and financial regulation.
Not surprisingly, this does not seem to have been picked up much in the US press, who focused more on the goal of increased bank regulation and then moved quickly on to Iran and the Pope’s spider. However in the press of the 12 new member countries, this is definitely front page stuff.
And yes, even Australia now has a seat at the expanded table.
