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At G-20 Summit, Economics Overshadowed by Paris Attacks

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World leaders from the 20 top economies as well as observer states met Sunday and Monday in southern Turkey for the annual G-20 summit. The gathering had been set to focus on an ambitious agenda to promote inclusive economic growth and global trade and investment. The terrorist attacks in Paris, however, overshadowed the meetings and raised hard questions about whether such summits can ever really grapple with the inequalities that lead to radicalization and despair.

The G-20 was created in 1999 but really swung into action during the 2008 global financial crisis. At the time it was seen as a useful intermediate mechanism for coordinated action on the international economic system, between the more elite G-7 grouping of highly industrialized countries and the more inclusive global financial institutions. The G-20, midwifed by Canada, had the virtue of including the G-7 plus the major emerging markets and some of the success stories of the Global South. Its other virtue was that it did not seek to be a new formal institution, eschewing a permanent secretariat and preparing its meetings in a more agile way by drawing on existing financial expert staff in the central banks and finance ministries of its members. 

In 2008, the G-20 was widely viewed as the right vehicle to coordinate major economic policies, in particular those that might help to prevent a repeat worldwide financial crisis. Some observers assumed that it would also take on a political agenda and become a kind of board of directors of the international system. After all, according to its website, its membership comprises two-thirds of the world’s population, 85 percent of world gross domestic product, and 75 percent of world trade. That larger role has not been achieved, but it’s worth noting that many of the daunting challenges in international politics, such as climate change and terrorism, have implicit and explicit economic dimensions. Climate change will disrupt the economic prospects for many tropical countries and create more economic migrants, and the debate over whether terrorists are driven by economic inequities will continue, unresolved. 

The host country for the summit traditionally plays a big role in setting its agenda, and this year Turkey had hopes for using the gathering to build more consensus for managing the costs of the current migration to Europe from warzones in the Middle East and Africa, including perhaps some relief from its own burden of hosting over 2 million Syrian refugees. Ankara also expected the summit to contribute to restoring its reputation as a stable anchor in a chaotic region, now that President Recep Tayyip Erdogan’s AKP party has won a majority in the recent parliamentary election. But the opening speeches on Sunday made clear that the instability emanating from Syria worked against the celebratory tone the Turks had hoped for.   

The summit released its final communiqué, which is usually negotiated in advance, outlining the specific and often technical economic steps that Turkey had set as the goals of the summit. These include calls for cooperative approaches to fiscal and monetary policies to achieve price stability, inclusive growth and job creation, and sustainable debt-to-GDP ratios. It also reiterates an earlier promise to lift the collective GDP of the G-20 states by 2 percent by 2018 and spells out some technical goals related to financial resilience, taxation and anti-corruption.

The communiqué also addressed several issues that are beyond its formal economic agenda, although arguably with considerable economic content: It endorses the Sustainable Development Goals of the United Nations’ 2030 Agenda, for instance, and speaks to climate change, migration and vulnerabilities of the Internet. 

As the Paris attacks took place after the official communiqué had been drafted, the summit also released a separate statement on terrorism at the close of the proceedings. That document condemned terrorism in general as a danger to the world economy, and focused on the G-20’s capacity to promote greater cooperation to stem or prevent terrorist financing, cross-border flows of fighters, and misuse of the Internet to incite violence and hatred. U.S. President Barack Obama said that the “sky was darkened” over the summit, and the bilateral sidelines meetings he held focused mainly on terrorism and the newly jumpstarted diplomatic process to resolve the war in Syria. Other leaders paid homage to the victims, expressed solidarity with France, and spoke of the need to renew efforts to confront the self-declared Islamic State as both an immediate threat and a more strategic challenge to regional and global security. 

And therein lies the rub: Tough responses to the attack are necessary, but no one is confident that a military response will be sufficient to undermine the Islamic State’s message and appeal in the long run. That gets back to the tricky interplay between economics and the appeal of the Islamic State not only to the downtrodden of the Muslim world, but also to more-mobile and more-educated young people who feel an affront to their dignity and identity from failed governance in their home states and Western policies they find humiliating. 

The Islamic State is not promising people the prosperity or the satisfactions of a consumer culture promoted by the champions of globalization. It does, however, use the tools of globalization to reach a disparate and still numerically small group of disaffected young people that may not realize how short their careers with the group will be. But one still senses that better economic prospects for more young people in the Muslim, and particularly the Arab, world could somehow dampen Islamic State recruitment. While religious and political ideologies are often anti-materialist, there is a connection between dignity and work, between self-esteem and being a productive citizen. 

The pronouncements of the G-20 summit seem quite removed from the dark stories emerging about the perpetrators of the Paris attacks. Perhaps macroeconomic coordination to promote inclusive growth and job creation cannot affect our counterterrorism strategies in the short run. But in the long run, there is surely a connection. 

This piece originally ran in World Politics Review, November 17, 2015

Photo credit via office of the U.K. Prime Minister

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