As the first Latin American developing country to chair the G20, Mexican President Felipe Calderon understandably has great expectations for what his term in office can deliver to the world’s emerging market economies.
On assuming leadership of the Group last year he outlined the following priorities for their 2012 Summit in Los Cabos:
- Fostering free trade while correcting commercial and financial imbalances (a thinly veiled reference to China’s artificially supported of its trade surplus);
- The regulation of the commodities markets in the interest of greater food security;
- ‘Financial inclusion for growth’ by following the recommendations of the Financial Stability Board and increased contributions to the International Monetary Fund so that it can play a key role in strengthening the global financial architecture;
- Climate change and ‘Green Growth’ through the establishment of a Green Climate Fund with fast-track funding for the Reducing Emissions from Deforestation and Forest Degradation (REDD+) programme; and
- Formalizing the structure of the G20.
Moreover, unlike his French predecessor, Calderon seems less interested in using the Summit as an occasion to ‘rehash’ the problems of the Eurozone or to launch another broadside against so-called ‘tax havens.’
Indeed the President had hoped that with decisive action by Europe to isolate the effects of the crisis on viable economies like Spain and Italy thereby avoiding systemic contagion; and immediately discounting the portion of Greek debt that is unlikely to ever be repaid, the Eurozone crisis could be solved in advance of the June Summit.
Not only is that not going to happen but in an open letter from the European Community (EC) to the G20 about what should engage them at their annual gathering, the Commission has again placed ‘Europe’ at the centre of this year’s deliberations.
According to the communique the EC believes that economic growth and employment should remain at the top of the G20’s agenda while making clear Europe’s commitment to safeguarding the financial stability and integrity of the Euro Area; and that they want Greece to stay in the Eurozone.
Since the European Union (represented by the EC) plus four of its European members constitute a quarter of the G20’s membership it is little wonder then that in response to President Calderon’s presentation of his 2012 Agenda to the Pacific Alliance of Mexico, Colombia, Chile and Peru; Colombia’s President had this to say:
“Excuse me for saying this, but in all frankness, if nothing changes radically, the G20 meeting will be another failure… to believe that the G20 will resolve our problems, well, I have a lot of doubts. Precisely due to the structural problems of the majority of the economies that make up the G20, I think it will be very difﬁcult for there to be consensus.”
It seems clear that to silence his naysayers and to prove that Mexico’s brand of ‘inclusive’ G20 leadership is workable, President Calderon must prevent Los Cabos from becoming another episode of “Euro-tunnel-Vision“.