Leave it to Mexico to put surrealism on the agenda at the G-20 summit that opens today in Los Cabos, Mexico. Actually, the Mexican government seems not have put much of anything on the agenda, at least when it comes to food security, one of its stated priorities as G-20 president this year. What’s surreal is listening to Mexico’s Agriculture Minister, Francisco Mayorga, speaking last Wednesday to an international conference on “New Paradigms for Agriculture,” describe without a hint of irony or self-reflection his government’s “model program” for sustainable smallholder agriculture.
This from the country that is the world’s poster child for the failures of neoliberal agriculture policy. Surreal. Where’s Frida Kahlo when we need her?
The G20 meeting to be held in Los Cabos, Mexico on 17-18 June is arguably the most important meeting of this group since it was formed, and certainly one that the world will be watching. It is possibly even more important than the famous meeting of April 2009 when the member countries committed themselves to co-ordinated recovery measures in the wake of the global fallout from the Lehmann closure.
The reason for this significance is that for some time now, the G20 appears to have lost its way. Its original intention – to provide a relatively speedy and workable arrangement for global governance (especially economic governance) at a time when co-ordination of macroeconomic measures is seen as essential – has clearly fallen by the wayside in the past two years. Indeed, if it cannot deliver this time around, it risks sinking into irrelevance, at a time when the global economy badly needs some institutions to respond to what is more and more evident as a crisis of massive proportions.
What is the relation between the Rio+20 Earth Summit and the upcoming G-20 summit in Mexico? These two events occur back-to-back, and both are at the ‘heads of state’ level. This month should be an opportunity for serious international course-correction, right?
Financial crises often present opportunities as well as challenges. Sometimes they even enable fundamental institutional adjustment despite the political and historical obstacles that otherwise frustrate innovation. In the early days of the global financial crisis it seemed that the new G20 Leaders’ meetings were going to serve as incubators for bold thinking. That has not been the case. Aside from some reasonable statements on the use of capital controls, the G20 has failed to take on the challenge of reforming the deficient global financial architecture.
The next G20 meeting (in Los Cabos, Mexico; June 18-19) is likely to expose further the institution’s stagnation. At this point it is prudent to expect that G20 members will wring their hands over the fate of the Eurozone, say the right things, but fail to launch any major initiatives.
The logjam among the G20 stands in sharp contrast to the dynamism that has emerged in Asia.
How much have U.S. ethanol policies pushed up corn prices? And how much have these higher prices cost developing countries dependent on imports for their staple foods? And if one of those countries is the chair of the G20, will it use its considerable influence over the agenda to demand policy changes?
The answers to the first two questions are clear from my new study, “The Cost to Mexico of U.S. Corn Ethanol Expansion” U.S. ethanol expansion has pushed prices up 20% or more in recent years, and that cost Mexico, which imports one-third of its corn, an extra $1.5-$3.2 billion from 2006-11.
The answer to the last question is less clear. Mexico is indeed the chair of the G20, whose vice ministers of agriculture meet tomorrow in Mexico City to set the G20’s food-security agenda in advance of the June 18-19 G20 summit. The Mexican government issued a report that suggests little ambition on food security, but hopefully our biofuels report will bring home why Mexico should lead and not follow on biofuels in the G20.
When it comes to food security and agriculture, the G20 seems to be all too willing to take the credit while passing the buck. It wants to set the agenda on world food security. But it has been reluctant to require the G20 governments themselves to coordinate regulatory changes to address high and rising food prices or put the kind of money needed into agricultural investment in the world’s poorest countries. Rather, it seems to be passing on responsibility for establishing rules and governance mechanisms to address food security onto others, while at the same time blocking others from discussing measures that might request changes to the G20’s policies.
For a while, in the immediate aftermath of the Global Financial Crisis of late 2008, the G20 came into its own. This group of (self-styled) leaders of the global economy, representing governments in nations contributing more than half of global GDP, came together in April 2009 to pledge a co-ordinated response to unprecedented global economic threats. This not only had a role in staving off immediate disaster through the implementation of broadly Keynesian responses, but also promise more for the future. This was not just vainglorious self-importance on the part of these governments. There was a genuine absence of global institutions that were sufficiently small as to be coherent (something that was not as possible in the United Nations, given its size and structure) or even seen as generally reliable, flexible and aware (given how the IMF has discredited itself by awarding good marks to so many economies just before they imploded financially).
But since then, the drama in the world economy could even have been Hamlet without the Prince of Denmark, as Act 2 of the global financial crisis unfolds. In its subsequent meetings, the G20 has been much more about style than substance – and sometimes the style has also been lacking. At least, in its Seoul meeting in 2010, the G20 committed themselves to promoting inclusive and sustainable economic growth. They argued that ‘for prosperity to be sustained it must be shared’ and also endorsed ‘green growth’, which promised to decouple economic expansion from environmental degradation.