G20 tests Russia’s influence

(Russia Beyond the Headlines – www.rbth.ru – Alexey Dolinskiy, special to RBTH – February 21, 2013)

In 2013, Russia will host the G-20 summit for the first time ever. Russia’s official presidency started in December 2012, but high-level meetings, culminating in the September 2013 St. Petersburg summit, are just beginning. Leading a global institution of the world’s most powerful countries is both a great opportunity and a great test for Russia.

Russia’s G20 presidency was long-awaited, yet it came unexpectedly: The national political elite had not prepared for this global role as thoroughly as they had prepared to host the G8 summit in 2006 or the Asia-Pacific Economic Cooperation summit in 2012.

The APEC summit Russia hosted in Vladivostok in 2012, for example, took several years of preparation, with Deputy Prime Minister Igor Shuvalov being responsible for preparing the venue (which did not exist before the summit), aligning the agenda and heading the work on Russia’s priorities in the organization.

The G20 presidency turned out differently. Although it was known well in advance that Russia would host the G20 summit of 2013, Russia’s G20 Sherpa (responsible for all key matters related to the summit) was appointed only in August 2012. Chief economist of Sberbank, Ksenia Yudaeva, who holds a doctorate degree in economics from MIT, was named the Russian G20 Sherpa and the head of the Presidential Experts’ Directorate.

The difference in the timing of these two summit appointments was matched by the difference in the appointees’ political authority. Igor Shuvalov was Putin’s Sherpa back in 2006, when Russia hosted a G8 summit for the first time in its history. Yudaeva’s appointment, on the other hand, is the first high-level governmental position to be given to a young individual with a background in both academics and the private-sector.

The change in national leadership rendered the events of the first half of 2012 another complication for G20 preparations, as cabinet reshuffling made it unclear as to who would be responsible for what domain in most federal agencies.

Finally, the APEC summit also became a challenge to proper preparations for the G20 presidency, since officials responsible for international cooperation in most ministries were preoccupied with APEC and had little chance to dive into the G20 agenda.

As a result, Putin’s speech in Los Cabos, Mexico (G20 Summit 2012, July), which outlined basic directions of Russia’s G-20 presidency in 2013, came indeed as a crucial announcement ­ both for foreign audiences and for Russian government officials. The final agenda of the presidency was completed by December 2012, when it was officially announced by President Putin and Russia officially assumed the presidency.

Russia’s priorities in the G20 are centered around economic growth, with a focus on job creation and investment, trust and transparency, and effective regulation. These topics embrace traditional G-20 agenda items such as financial regulation, food security, employment and public debt, which are to be discussed through the prism of Russian priorities throughout the year.

According to Deputy Finance Minister Sergei Storchak, who spoke at the Gaidar Forum in Moscow earlier this year, Russia has an ambitious plan for the year 2013.

“By the September summit we want to develop a mechanism of monitoring G20 commitments fulfillment, develop an initiative of trading stock denominated in local currencies, a new formula for IMF quotas calculation and a mechanism of derivatives trade regulation,” said Storchak.

Traditionally, the G20 agenda has included two tracks: the financial track and the Sherpas’ track. The former can be traced back to the time when the G20 was still a finance ministers’ meeting, although today it still involves largely ministers of finance and heads of central banks. The latter track appeared after the G20 became a venue for the national leaders’ meeting in November 2008, when it became a rapid response mechanism in the global economic crisis.

The Sherpa’s track is a replica of the G-8 arrangement: there is a designated government official in every member state responsible for preparing the leaders’ meeting. In the G-20, Sherpas are essentially responsible for everything beyond finance.

G20 architecture is further complicated by the Outreach program. In addition to the governmental two-track dialogue, five other tracks have been established in the last few years: Business20, Think20, Civil20, Youth20 and Labour20. Each of these involves a specific group of participants that have now become part of the G-20 process: private companies, think tanks, students and labor organizations.

Civil20 has become Russia’s contribution to further expansion of the G20 institutional platform.

According to the University of Toronto professor and founder of the G20 Research Group, John Kirton, “since Russia is not a member of the G7 Finance Minister Forum, the fact that Russia has been chosen for the 2013 G-20 summit really certifies its status of a top-tier global financial and economic governor.” Kirton added that the topics selected for Russia’s presidency year were chosen rather well, not just for Russia but for many countries.

As a host country, Russia has to organize productive discussion on every topic and in every track; the late start has made that a significant challenge. However, involvement of the broad expert community can mitigate that problem.

The G20 presidency comes as Russia looks back on its presidency in APEC in 2012 and prepares to lead the G8 and BRICS in 2014. Intense cooperation with experts and business communities is one of the APEC lessons that has already been noticeably applied by Russia for the G20 presidency. Russia has been learning to shape global agenda, and there is more to come.

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Interesting facts about the G-20

* The G20 represents 90 percent of the global GDP, 80 percent of global trade and two-thirds of the global population.

* Technically, the G20 members do not represent exactly 20 countries. The EU is counted as a single G20 “member,” although there are several European countries represented by the EU.

* The G20 has existed since 1999, but it became an institution of truly global importance only after the global economic crisis of 2008.

* The title “Sherpa” designates the personal representative of a head of state in the G8 or G20, but the word came from a Nepalese ethnic group famous for assisting alpinists in conquering the Himalayas.

Article also appeared at http://rbth.ru/business/2013/02/21/g20_tests_russias_influence_23105.html