Gordon Brown undoubtedly achieved a success at the G20. But as with all meetings of world leaders, the communique issued at the end (most of which was written before the event) needs to be read between the lines. What is not said is often as important as what is said. And since the final version is obviously spun to maximum effect, it is essential to look very closely at the small print. It was grandiosely described as the creation of new world economic order, when it was nothing of the kind. It was hyped as a new Bretton Woods and separately as a global new deal; again the reality was much more pragmatic and limited. The whole package needs to judged on the basis of at least five specific, critical counts where in each case the outcome remains uncertain and much more detail is needed than was provided in the communique.

First, at the heart of the communique, is the claim that an extra $1.1 trillion has been provided – $500bn more to the IMF, a new Special Drawings Right of $250bn, $100bn additional lending by the MDBs, and an extra $250bn to support trade finance – to stimulate the world economy. But it is crucial to understand that this money has been promised, not paid upfront. Similarly, after the Gleneagles summit huge extra sums were pledged to counter world poverty and particularly to kickstart African development, but only a fraction of it has actually so far been delivered. Also, the extra money, insofar as it materialises, is destined via the IMF to help developing countries in crisis, not the rich world. Both Brown and Obama had been seeking a further big fiscal stimulus in the West, but it never happened at the G20 partly because of Franco-German opposition and partly because of concerns (as expressed most notably by Mervyn King) that the limits of indebtedness had been reached.
Second, the communique puts upfront the well-worn and oft-repeated assertion that “We commit to taking whatever action is necessary to secure the outcome” (of restoring growth and jobs, while preserving long-term fiscal sustainability, and accelerating the return to trend growth). But what action exactly is being proposed? The absence of specifics betrays the emptiness at the centre of the programme. There is no clear, prepared, agreed set of proposals to get the world out of this mess. The G20 are trying to respond to events as best they can, not leading from the front on any preconceived plan.
Third, the specific at the centre of the void – what to do about the hundreds of billions of toxic assets that triggered this meltdown – isn’t even mentioned in the communique. Are they to be put into a ‘bad bank’, or preserved by an asset protection scheme, or nationalised and then sold off or written off? But until the banks can be cleared of these toxic assets, there will be no recovery. Fudging this question which is at the heart of this whole crisis starkly reveals the hollowness of this overblown rhetoric.
Fourth, there are a lot of good intentions in the G20 message and a welcome talk of co-operation, but next to nothing about enforcement. De-regulation is allegedly now out, there is no new international supervisory authority to re-regulate Wall Street or the City of London. Tax havens that don’t comply with greater transparency and information-sharing are to be put on a black list, but will the big corporations and ultra-rich individuals not still be able to avoid their tax-paying responsibilities through tax arbitrage? The communique boasts of “making the transition towards clean, innovative, resource-efficient, low-carbon technologies”, but these are mere generalities which in the absence of any specific targets for green investment are vacuous.
Fifth, Gordon Brown likes to trumpet the end of the market fundamentalism of the last three decades (over which he himself presided for the last of these decades) and to claim that the Washington Consensus is now finished. Yet the contrepiece of the whole G20 package is the trebling of funds for the IMF, the very institution which administered the poisonous medicine of structural adjustment programmes to so many developing countries which so often crippled their economies. Pledging $750bn to the IMF is not ending the subjugation of poorer countries to the rich nations, certainly not creating ‘capitalism with a conscience’ as Sarkozy has claimed, but rather returning to business as usual which, for Gordon Brown at least and probably for several others round the table, was always the object of the exercise.

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