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Analysis | 2000 G20 Ministerial Documents

The G20 Ottawa Ministerial Meeting:
A Report on Development Issues

Bryn Gray
G8 Research Group
Ottawa, November 17, 2001

The events of September 11 and the current economic crisis have further demonstrated the need for greater dialogue and coordination between the twenty leading industrialized and emerging market economies.

At the beginning of the G20 ministerial, Finance Minister Paul Martin outlined three areas for discussion in Ottawa:

1. The economic impact of September 11
2. A global action plan to combat the financing of terrorist activity
3. Ensuring that the benefits of globalization reaches all members of society

While development issues have not been as predominate in Ottawa as they were last year in Montreal, they were nevertheless discussed in each of the three main issue areas.

In terms of the economic impact of September 11, the Finance Ministers, Central Bank Governors, the World Bank President and the Managing Director of the Development Committee and the IMFC each expressed concern on how the events of September 11 affected low-income countries. The negative repercussions have been felt particularly in the area of trade, which accounts for an average of 30 percent of low-income countries' GDP.

Deteriorating terms of trade has hindered development in a variety of ways since the 1970s, particularly in the area of debt. The resulting instability from the events of September 11 has only further exacerbated this. An area of particular concern is the ability to make debt repayments. Based upon preliminary study of the effects of September 11 on Highly Indebted Poor Countries (HIPC), the World Bank President and the Managing Director of the IMFC and Development Committee acknowledged that there is a potential need for additional debt relief. There was, however, no monetary commitment made by the industrialized countries to this end. While this issue will be discussed at the Development Committee tomorrow, further study and dialogue will no doubt be proposed before debt relief is enhanced.

In regards to combating the financing of terrorist activity, there was concern expressed regarding the ability of some emerging market countries to implement the agreed measures, particularly under the time constraints being pushed by several of the industrialized countries such as the United States. In their Communique, the Finance Ministers and Central Bank Governors agreed to provide monetary and technical assistance to those countries that are in need of help to develop and implement the laws and regulations necessary to combat terrorist financing. They called on the World Bank and the IMF to also provide assistance towards this end. This ambitious action plan will require significant coordination between many of the industrialized and emerging market economies. It could, however, be an important test of the ability of the G20 implement concrete initiatives affecting positive change in the international arena. If successful, the relevance and credibility of the G20 would no doubt be significantly enhanced.

In terms of the third issue of globalization, there has thus far been only a reaffirmation of the three tenants of the Montreal Consensus: that globalization could be beneficial for all; that there is need for greater distribution of its benefits; and that the poor need to be shielded from its potential negative ramifications. The G20 countries have failed to move beyond the Consensus to develop more concrete commitments. In their statements and Communiques, they have simply restated the need to work internationally through international financial institutions like the World Trade Organization as well as domestically through ensuring good governance and sound macroeconomic, social and structural policies at home. While these may indeed be ways in which the benefits of globalization could be more wide spread, the vagueness of the methods seem to reveal the lack of commitment to move forward aggressively on this matter.

With the recent launch of a new WTO Trade Round in Doha, it would have been very timely of the G20 to outline their objectives for the round, building on the Montreal Consensus achieved last year. Unfortunately, they have only thus far welcomed the new trade round without agreeing to any concrete plan of action. However, given the length of the trade round, there remains an opportunity for this forum to provide significant leadership in the efforts to truly address the needs of the poorest.

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