Plans for the Fourth G20 Summit: Co-chaired by Canada and Korea in Toronto, June 26-27, 2010 Jenilee Guebert Director of Research, G20 Research Group May 10, 2010 List of Acronyms and Abbreviations 2 Germany 97 Preface 3 India 99 1. Background 3 Indonesia 100 2. Agenda and Priorities 4 Italy 101 Global Imbalances 9 Japan 103 Economic Growth 10 Mexico 104 Stimulus and Exit Strategies 11 Republic of Korea 106 Regulation and Supervision 16 Russia 107 Debts 24 Saudi Arabia 109 Accounting 26 South Africa 110 Offshore Jurisdictions and Tax Havens 28 Turkey 112 Executive Compensation 33 United Kingdom 113 Levies on Banks 37 United States 114 Currencies and Exchange Rates 41 European Union 116 Hedge Funds 48 Key sources 118 Reform of the International Financial Institutions 50 Trade 51 Climate Change 54 Energy 55 Employment 55 Development 56 3. Participants 57 4. Implementation and Preparations 59 Implementation 59 Preparatory Meetings 61 Preparations 62 Other Meetings 67 5. Site 68 Next Summit 70 6. Civil Society and Other G20 Related Activities 75 7. Appendices 77 List of Meetings 77 Leaders 77 Ministerials 77 Sherpas 78 Deputies 79 Workshops 79 Other 79 G20 Leaders’ Experience 79 List of G20 Finance Ministers and Central Bank Governors, 1999-2009 80 Members of G20, Gleneagles Dialogue and Major Economies Forum 84 G20 Leaders’ Biographies 84 Statistical Profiles 89 Argentina 89 Australia 90 Brazil 92 Canada 93 China 95 France 96 G20 Research Group, May 10/10 1 List of Acronyms and Abbreviations AIMA Alternative Investment Management Association APEC Asian Pacific Economic Cooperation ASEAN Association of South East Asian Nations BCBS Basel Committee on Banking Supervision BIS Bank for International Settlements BRIC Brazil, Russia, India and China CDS credit default swap DPRK Democratic People’s Republic of Korea DTA double taxation agreement ECB European Central Bank FSB Financial Stability Board FSF Financial Stability Forum GDP gross domestic product IADB Inter-American Development Bank IASB International Accounting Standards Board IDA International Development Association IEA International Energy Agency IFIs international financial institutions IFRS International Financial Reporting Standard IMFC International Monetary and Finance Committee IMF International Monetary Fund MEF Major Economies Forum MEM Major Economies Meeting NEPAD New Partnership for Africa’s Development OECD Organisation for Economic Co-operation and Development OPEC Organization of Petroleum Exporting Countries UNFCCC United Nations Framework Convention on Climate Change WTO World Trade Organization Preface This report on the “Plans for the Fourth G20 Summit” is compiled by the G20 Research Group largely from public sources as an aid to researchers and other stakeholders interested in the meetings of G20 leaders and their invited guests. It is updated periodically. Note that this document refers to the G20 leaders’ meeting (or summit), which had its first gathering on November 14-15, 2008, in Washington DC (as opposed to the G20 finance ministers forum, which was founded in 1999, and other groupings such as the G20 developing countries formed in response to the agricultural negotiations at the World Trade Organization). 1. Background The Group of Twenty (G20) leaders met for the first time in 2008, initially on November 14 for a working dinner and then on November 15 for a working meeting in Washington’s National Building Museum. The official name of the meeting was the “Summit on Financial Markets and the World Economy.” Participants from the G20 systematically significant developing and emerging countries gathered to discuss the global economic and financial crisis affecting the world. The G20’s members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union. Spain and the Netherlands also participated in the first meeting as part of the French delegation, under the auspices of the EU. The second summit took place on April 1-2, 2009. The United Kingdom hosted the meeting in London. Spain and the Netherlands again participated and representatives from ASEAN, the Financial Stability Forum, the International Monetary Fund, NEPAD, the United Nations, the World Bank and the WTO were also included. The third G20 meeting took place in Pittsburgh on September 24-25, 2009, with the United States as host. The fourth G20 summit (and the first institutionalized one) will take place in Toronto, Ontario, Canada, on June 26-27, 2010. It will be co-hosted by Canada and the Republic of Korea. The fifth summit is scheduled to take place in Korea in November 2010. In 2011, France will take over as chair. The G20 finance ministers’ and central bank governors’ group first met in 1999. They met for their tenth annual meeting on November 8-9, 2008, in Sao Paulo, Brazil. They have started meeting more frequently since the G20 leaders first met in Washington, including during the leaders’ meetings. They met on April 24, 2009, in Washington on the margins of the annual spring meeting of the IMF and World Bank, on September 4-5 to prepare for the Pittsburgh Summit and again for their annual meeting on November 6- 7, 2009, in St. Andrews, Scotland, which was be hosted by the UK (which held the chair of the G20 for 2009). Under the Gleneagles Dialogue, since 2005 a group of 20 ministers in the fields of environment and energy have met, including in Japan in 2008, to discuss issues associated with climate change. On the margins of the G8 Hokkaido Summit in Japan in July 2008, the 16 Major Economies Meeting (MEM-16) was held at the summit level, following official-level meetings of this forum started by the United States in 2007. President Barack Obama co-chaired the second summit-level meeting of the renamed Major Economies Forum (MEF) as part of the G8 L’Aquila Summit in Italy on July 9, 2009. In both cases, membership largely overlaps that of the G20. 2. Agenda and Priorities Highly indebted countries that continue borrowing heavily pose a “real risk” to global economic recovery, said Canadian prime minister Stephen Harper. Determined exit strategies from stimulus spending will have to form a big part of the discussion at next month’s G20 summit. “Our European friends have taken all the action that is necessary,” Harper said of the $140 billion emergency loan package offered to Greece by the EU and the IMF. “Obviously the situation in Europe is worrisome to a lot of people … As I said earlier this week, though, I think the European Union has put forward a package that is more than reasonable to deal with the situation.” He said the EU countries, including Greece, are “prepared to do what is necessary to resolve that issue … We’re going to do whatever we can to be supportive, to obviously encourage markets to act rationally, and to stay focused on the general pattern of recovery.” Harper insisted any recovery is still fragile and “we have to keep our eye on the ball.” He cautioned that “we will need a special focus … not just on stimulus but on the exit strategies from stimulus (at the Toronto summit) … This situation (in Europe) does show that, notwithstanding the necessity of high deficits in many countries during the recession, that in highly indebted countries in particular there are real risks with prolonged high deficits. We all need, internationally, to have solid exit strategies out of these situations as we approach the recovery.”1 (May 7, 2010, Canadian Press) The G20 Toronto Summit in June will focus on improving the quality and quantity of capital in the world’s financial institutions and on placing firm caps on leverage, Canadian finance minister Jim Flaherty said. “We have to get this right.” A key problem that led to the meltdown of financial markets in 2008 was “the excessive risk-taking” by banks around the world. They were leveraging assets to the tune of 30 to 1 to 40 to 1, he said. G20 countries all agree on the principle “that financial institutions that contribute to a financial crisis in the future should bear the cost of that, and not the taxpayers,” Flaherty said. Canada is suggesting that banks should be required to set aside some capital that could be tapped in the event of a crisis.2 (May 4, 2010, Waterloo Region Record) At their April meeting, the G20 finance ministers and central bank governors agreed to keep stimulus measures in place until the private sector recovers, seeking continued 1 Canadian Press (May 7, 2010), “Greek debt crisis shows G20 needs to discuss stimulus exit strategy: Harper.” 2 Waterloo Region Record (May 4, 2010), “Flaherty says G20 will focus on curbing risk.” global cooperation in exit strategies. They also pledged to complete the quota and governance reform of the IMF by their November Summit. “The global recovery has progressed better than previously anticipated largely due to the G20’s unprecedented and concerted policy effort. However, it is proceeding at different speeds within and across regions and unemployment is still high in many economies,” said the communiqué. “We recognize that in such circumstances, different policy responses are required. In economies where growth is still highly dependent on policy support and consistent with sustainable public finances, it should be maintained until the recovery is firmly driven by the private sector and becomes more entrenched.” In a G20 meeting in February in the Republic of Korea, each country generally agreed that the economic rebound was taking place at various speeds and exit strategies should be sought based on such different economic conditions, though they pledged global coordination. But some countries are now showing signs of splitting from this, by raising their key interest rates and withdrawing other fiscal policies.