G20 china_web

Stories from inside summitry
KEY TAKEAWAYS
Continued dialogue is needed
between disparate countries
G20 sherpas sometimes broker
deals at summits
5Number of G20 sherpa meetings
in China in 2016
Sherpas lead to
coordinated actions
A former G20 sherpa of the President of the United States,
Caroline Atkinson explains the unique role sherpas play in
negotiating solutions at summits
WHAT IS A
‘SHERPA’?
A ‘sherpa’ is the official who
represents the G20 leader
in the preparations for the
meeting of the heads of state
and government. The term,
coined in the G20 in the
1970s, is borrowed from the
Nepalese guides who carry
the bags for mountaineers
climbing to the summit of
Mount Everest. It reflects
the G7 ideal that these
individuals are the leaders’
personal representatives,
distinct from the other
officials in the government
bureaucracy. They also
provide only practical
support as the policy comes
from the leader alone.
As leaders of the G20 gather
in China in September, real
problems remain in the global
economy. The recovery from
the great recession of 2008
continues, but its pace still disappoints.
Inevitably the question arises of what can
and will the G20 leaders do.
I participated in many summits behind
the scenes, most recently as the sherpa to
US President Barack Obama from 2013
to 2015. I am therefore familiar with that
question and with the scepticism behind it.
It is true that bringing the leaders
together once a year cannot achieve much
on its own. While governments acted
together with speed under the pressure of
the crisis in 2008–09, there has not been
concerted action on that scale since then.
Instead, there has been agreement on the
need to promote jobs and growth, but not on
how best to do that.
Is the G20 out of steam or a waste
of time? I do not believe so. The lack of
coordinated action on macroeconomic
policy has happened for two reasons, which
both argue for the importance of continued
dialogue within this disparate group
of countries.
Calming tempers
First, countries have faced distinct
challenges since the worst of the global
crisis passed. For a time, emerging markets
remained relatively strong, with commodity
exporters helped by China’s decisive action
to support its growth by investing heavily
in domestic infrastructure. For these
countries, measures to support growth in
advanced economies, particularly with
unconventional monetary policy, often
seemed destabilising to their own currencies
and economies. Meanwhile, a renewed
crisis in Europe in 2011–12 exacerbated the
divide between developing countries and
advanced economies. While circumstances
differed, the many debates among G20
sherpas, finance ministers, central bank
governors and eventually leaders helped
calm tempers and promote understanding,
albeit without resolving to act together on a
macroeconomic level.
The second cause of a lack of
coordinated action is that it has proved
difficult to repeat the efforts from 2009 to
2012. Views among G20 members differed
about how to get beyond the crisis. Almost
as soon as fiscal stimulus was put in place
in 2009–10, some countries began to call for
renewed consolidation, fearing that large
fiscal deficits risked another crisis.
The United States argued for a focus on
jobs and growth, rather than fiscal austerity.
Germany and others, including some
emerging markets, believed that the euro
crisis could only be overcome by a sharp
contraction in borrowing by highly indebted
countries and a general return to fiscal
rectitude. These contrasting views battled
behind the scenes.
240 G20 China: The Hangzhou Summit • September 2016 G7G20.com