High-level finance ministers and officials from some of the most economically powerful countries in the world will convene when the G-20 meets June 28-29 in Osaka, Japan.
The G-20 is made up of 19 advanced and developing countries plus the European Union. The group meets each year to discuss global economic policy, trade and international relations. The G-20 held its first leadership summit in 2008 in Washington, D.C. While in Osaka, President Donald Trump and Chinese President Xi Jinping plan to meet to discuss the ongoing U.S.-China trade war, so the stakes could be high.
The global economy has improved since the G-20 summit first convened during the height of the Great Recession. Over the past 10 years, China has also become an economic powerhouse. Imports and exports from emerging economies have risen from about a quarter to more than a third of all trade in G-20 economies since the recession. This increase was driven by trade growth in China, according to an analysis in late 2018 from economist Suman Bery, a non-resident fellow at the Brussels-based Bruegel think tank. Real income — income adjusted for inflation — has also risen quickly in Asian economies during that time, Bery finds.
With the backdrop of a global economy still adjusting to new competing power structures, we decided to take a look at recent academic research that sheds light on how one of the most economically influential groups in the world functions. Below, we highlight 6 studies to know before the G-20 kicks off.
The research we found shows how G-20 discussions have sought to promote economic inclusivity — which broadly means everyone should have the opportunity to be economically successful — but still lack a concrete strategy for reducing economic inequality. The research also explores relations between China and Japan, and how Trump’s verbal attacks have affected international institutions such as the North Atlantic Treaty Organization and the World Trade Organization. We offer a study that examines the varying success G-20 nations have had in addressing existential climate change concerns — and even one on how citizens navigate the cities where G-20 representatives gather.
As much as ever, global forums like the G-20 are framed by countries at the top of the economic pecking order, and that pecking order is starting to shift. Here’s the research:
Trade, Inclusive Development, and the Global Order
Draper, Peter; Freytag, Andreas; Dörffel, Christoph; Schuhmann, Sebastian. Global Summitry, April 2019.
G-20 countries are improving economic inclusiveness at a faster rate than non-G-20 countries, this analysis finds. The authors adapt a definition of inclusiveness from Nobel Prize-winning economist Amartya Sen — that “every person must be provided with the capabilities to lead the life he or she has reason to live,” they write.
Wages have increased globally since the 1980s and some countries are becoming more inclusive, the authors find based on data from the World Economic Forum’s Inclusive Development Index. The IDI is a yearly analysis of economic performance in 103 countries. Over the past five years, IDI scores improved in 64% of countries analyzed.
Among G-20 and non-G-20 countries, the results are stark. The authors find that G-20 IDI scores have increased 1.63% compared to 0.47% among non-G-20 countries — a more than threefold difference.
“We found that G-20 countries perform better than non-G-20 countries and concluded that G-20 countries should celebrate their relatively positive achievements and assist non-G-20 countries to follow suit,” the authors write.
They chalk up positive but broadly uneven changes in IDI to an interplay between economic growth, technological innovation, workforce shifts away from manufacturing, open international trade and the economic consequences of political decisions. More research is needed to understand exactly how these forces interact to affect economic inclusiveness, according to the authors.
And Yet it Moves: The Agenda Against Inequalities in the G-7 and G-20
Martelli, Simone; Bartolomucci, Lawrence. Global Policy, February 2019.
Economic inequality has “climbed to the top of the political agenda” in advanced economies, the authors write. The G-7 — formerly the G-8 until Russia was expelled in 2014 after it annexed Crimea — have agreed on the causes of inequality and developed a framework of policies to address it. The G-7 first met in 1975. It is like the G-20 except that it includes only the most advanced economies in the world, representing almost half of the world’s GDP.
The G-20, however, has lagged in developing a common framework on reducing inequality. They’ve been talking about inequality since at least 2013, well before the G-7 brought up the issue, according to the authors. Since 2016, inequality has been a key part of several G-20 documents and strategies. Inclusive growth — which refers to economic policies that reduce inequality — is one of nine priority areas in the G-20’s Enhanced Structural Reform Agenda. Inequality was featured in its Future of Work discussions last year. Still, there is no broad agreement within the G-20 on how to address inequality, and the reasons may have to do with how the G-20 is organized.
“The G-7 structure is clearly more flexible and informal,” the authors write. “The absence of regular Working Groups allows each Presidency to directly steer the discussion towards the most pressing priorities for the group.”
G-20, meanwhile, is “not only more heterogeneous, but also a more complex forum,” they write.
International Law and Institutions in the Trump Era
Goldsmith, Landman Jack; Mercer, Shannon. German Yearbook of International Law, forthcoming.
High-level convenings like the G-20 are part of a post-World War II international order that Trump has at times railed against. In this paper, the authors explore the potential consequences of Trump’s verbal attacks on international policy and governance organizations.
“‘America will always choose independence and cooperation over global governance, control, and domination,’ [Trump] told the [U.N.] General Assembly in September 2018, in a recent, typical formulation,” the authors write. “‘We will never surrender America’s sovereignty to an unelected, unaccountable, global bureaucracy,’ he added, in the course of excoriating the World Trade Organization, the International Criminal Court, and the [U.N.] Human Rights Council.”
Despite the rhetoric, the international order remains mostly unchanged, the authors find. The U.S. has pulled out of treaties like the North American Free Trade Agreement in ways that are in total accordance with the terms of those agreements.
“This is an oddly respectful attitude toward international law by an administration that in other respects seems to want to wreck it,” the authors write.
Likewise, while Trump has blasted NATO, the U.S. continues to participate in the alliance, which basically functions how it did when Barack Obama was president. While these institutions have stood the test of Trump so far, the way the president talks may serve to upset their foundations long-term.
“The attacks cause some third party observers to lose faith in the institutions, which in some instances translates into less domestic support for these institutions in other countries,” the authors write. “When the leader of the world’s most powerful nation and the former defender of these international institutions acts in norm-defiant ways toward them, it makes it easier for leaders in other nations to take a similarly disdainful attitude toward these institutions. These last two factors surely explain Trump’s contributions to the continued rise of populist nationalist governments after his election.”
Are the G-20 Economies Making Enough Progress to Meet their NDC Targets?
den Elzen, Michel; et. al. Energy Policy, March 2019.
Nationally determined contributions, or NDCs, are the core of the Paris Agreement on climate change. NDCs are plans that each participating country puts together to achieve emissions reductions. Though Trump announced in June 2017 he intended to withdraw the U.S. from the agreement, the pact does not allow the U.S. to actually withdraw until November 2020.
The authors calculated emissions levels, based on information countries submit to the United Nations, to determine whether G-20 members were on track to meet their NDC targets or if they needed to take further action. NDC targets vary by country. The U.S. committed to reduce greenhouse gas emissions between 26% and 28% by 2025 compared to 2005 levels. EU countries committed to reducing emissions by 40% by 2030, compared to 1990. Japan’s goal is a 26% reduction by 2030 compared to 2013.
China, India, Indonesia, Japan, Russia and Turkey are on pace to meet their NDC goals, the authors find. Argentina, Australia, Canada, the European Union, South Africa, the Republic of Korea and the U.S. are not on track. There was not enough data on Brazil, Mexico and Saudi Arabia to determine their status.
Just because a country is on track doesn’t mean it’s doing better at reducing emissions than a country that’s not on track, the authors write. Because emission targets vary, a country with an ambitious target might be doing quite a bit to reduce emissions and still not meet its NDC goal. The agreement and associated NDCs are also relatively new, so there is still time for countries to meet their targets.
Even if all G-20 countries with NDCs were on pace to meet their emissions reduction targets, these collective reductions still wouldn’t come close to meeting the Paris Agreement’s most ambitious goal of limiting global warming to 1.5 degrees Celsius relative to pre-industrialization.
“Sub-national actors such as cities and regional governments may take further action, and non-state actors can also help to overachieve NDCs,” the authors conclude.
Rat Running the G-20: Collective Intelligence for Navigating the Disrupted City
Estrada-Grajales, Carlos; Mitchell, Peta; Foth, Marcus; Satchell, Christine. AI & Society, February 2018.
Major international events like the G-20 can upend daily life for people. The authors used a mobile app to follow the movements of 14 people who went about their daily lives near the 2014 G-20 Summit in Brisbane, Australia. The study group included equal numbers of men and women aged 18 to 35, most of whom were recent Latin American immigrants.
“Although our purpose was not recruiting Latin American participants exclusively, having them in our sample enabled us to observe how minority communities communicate and access different kinds of information and sources,” the authors write.
The increased police presence in Brisbane during the G-20 summit made some participants uncomfortable. The city put increased security in place following violent clashes at G-20 summits in London in 2009 and Toronto in 2010. Security schemes were meant to ensure safety. But participants ended up experiencing a “sense of threat” that showed in the cautious movements they made around the city, the authors find.
“[Roma park] is always really creepy … I imagined that on that day [G-20] would be even worse … that’s why I changed my route [to Spring Hill],” one participant recounted. Another remembered: “[Brisbane] is normally safe, but someone told me that the [Botanic] gardens are dangerous … it’s too desolated there.”
The G-20 in Brisbane made participants rethink how they navigated their city. Participants used a variety of information from a variety of sources — digital news and social media, their own experiences — to get to where they needed to go and home again.
“Our findings seem to describe that sociality patterns, nuanced by cultural practices, meanings and worldviews, affect the ways in which citizens make decisions and engage with their lived urban space,” the authors conclude. “We argue that future research into how culture and technologies influence how urban residents engage with their lived spaces will be critical for the generation of actionable knowledge in urban policy making towards the construction of more inclusive cities.”
Warm but Wary
Dreyer, Teufel June. Comparative Connections, May 2019.
This article provides a quick and comprehensive overview of recent relations between Japan and China, which are particularly relevant with this G-20 being held in Osaka. On the economic front, Japan over the last two years has invested more in China, with some Japanese heavy manufacturing production being moved there. Japan also now sells more goods to China than to the U.S., according to the authors.
On technology and defense, Japan has collaborated with world partners to counter China. Japan has arms and military logistics agreements with Canada, France, India, Australia and the U.S. Japan is also working with Britain on quantum science and artificial intelligence research to keep pace with China’s advances in those areas.
Low-simmering tension remains between the countries. China has not lifted food import bans from areas of Japan affected by the 2011 Fukushima nuclear meltdown, while Japan has kept in place regulations restricting Chinese telecom dynamo Huawei. Chinese investors have snapped up real estate in Kyoto, driving up prices and “engendering resentment” among locals, according to the authors.
“The generally cordial atmospherics of lower-level talks belied tensions over territorial disputes, intellectual property rights, and cybersecurity,” the authors write.
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