Volume 44, Number 175,
October-December 2013
The G20 in Los Cabos:
A Lost Opportunity for Much-Needed Change
Carlos Rozo and Aleida Azamar

An initial look at the transformations that global geopolitics are currently undergoing reveals that these shifts are unrelated to the changes taking place in the realm of world economic power (The Economist, 2011: 66). The global combined gdp of developing countries was estimated at 38% (in market exchange rates) in 2010, which is double what its value was in 1990. If these calculations were done in parity with purchasing power, their 2011 value would be 54% of the total. More impressive is that in the first years of the 1990s, these countries were responsible for two-thirds of the increase in gdp. In the first decade of the 2000s, these nations accounted for three-fourths of the growth in the global product. Exports from thee nations represented 27% of the global total in 1990, but surpassed half of global exports by 2010, while imports constituted 47% of the total. Developed countries consume 60% of global energy, 65% of copper and 75% of all steel. In 2011, emerging economies were responsible for more than half of capital expenditures, despite barely reaching 27% in the year 2000. One-fourth of the global Fortune 500 list is from emerging economies, even though this number was barely 4% in 1995. Their debt levels remain low, with only 17% of the total. Statistics from the International Monetary Fund (imf, 2008) reveal that in 1980, the United States economy was equivalent to 25% of the world economy, but by 2011, this proportion had fallen to 19%, and by 2017 it is expected to drop to 18%. EU nations represented 31% of the global economy in 1980, a proportion that has fallen to 21% by 2011 and will continue to drop to 17% in 2017. Developing countries in Asia, including China and India, rose from 8% to 25% in the first time period and their share may increase to 31% by 2017.

These significant variations are re-drawing the map of global economic power, but changes in the political power exercised in multilateral institutions have yet to catch up. The ongoing modifications to the structure of imf governance, agreed upon during the summit in Seoul, South Korea, are not enough to achieve more equitable and symmetrical power distribution in accordance with the economic strength of regions. The presence of the G20 implies recognition of this new reality, but restructuring on the international level will be necessary to give developing countries a greater weight. The Group of Seven (G7) – the most industrialized nations – can no longer make unilateral decisions on the direction of humanity, as they were doing just a few years ago. This new reality requires decisions to be made on global and economic policy that take into account the major developing countries.2

A new balance of economic power is under way, and this must be clearly reflected in the forms and institutions of international governance, which will require making significant changes to the distribution of global power and ways of exercising power to achieve greater welfare. In this context, the task of the G20 is more relevant and necessary than ever to achieve parity in global governance. However, it is useful to ask: What can retrospectively be expected from what has been achieved up to this point?3 For purposes more oriented towards development, the group will have to focus on proposing solutions to the pressing issues of hunger, poverty and inequality, which are at the heart of social deterioration in the majority of countries. Ideas to incentivize the long-term restructuring of the productive system so that it is oriented towards generating quality jobs and preparing people to participate in the workforce are needed. This long-term task may be more productive than continuing to be embroiled in how to exit from a short-term financial and monetary crisis.


The planning of the summit was influenced by expectations on how the elections in Greece would turn out, which were to take place one day before the start of activities in Los Cabos. In this context, the challenge for Mexican authorities was to ensure that the European crisis would not overshadow their proposed agenda, which considered major topics with a long-term perspective: 1) economic stability and structural reforms, 2) strengthening the financial system and fostering inclusion, 3) improving international financial architecture, 4) food equality and mitigation of the prices of raw materials and promoting sustainable development, 5) green growth and climate change (G2012, 2012a, G2012, 2012b). Unfortunately, the challenge was not overcome. What stood out most from the debates and negotiations was their focus on the fiscal and banking crisis in Europe as a short-term priority.

In fact, it could be argued that the ideas set forth by the Mexican government were oriented towards and reflected the logic of the neoliberal policies with which the Mexican economy was managed during the PAN (National Action Party) years since 2000, which have quite simply maintained and deepened the open neoliberal model imposed by the PRI (Institutional Revolutionary Party) since the beginning of the 1980s.

With the proposed agenda and the dynamics of the European situation, the Mexican government failed to take advantage of the opportunity to support a new trend in global geopolitics that would focus more on resolving the serious economic and social problems that the majority of developing countries face.4 It was time for Mexico to speak up and alter the path to search for long-term solutions to the dilemmas of poverty and inequality that the crisis had aggravated, while also calling attention to those responsible for these issues in recent years by emphasizing that they should not be allowed to go unnoticed and absolved of guilt. This would have made Mexico’s position as chair more relevant and given leadership to emerging countries. In this way, the short-term expense of 760 million pesos would have become a long-term investment.

In the context of geopolitical change and the need to deal with the negative effects of globalization, the agenda should have focused in large part on food security and sustainable green growth. Rather than structural reforms that improve productivity, increase investment and strengthen the power of global production chains, efforts could have been centered on an alternative strategy to reverse the social inequalities so characteristic of less developed countries. This sort of option is not independent from food security and the social effects of the lack of food. What is needed is concerted action to achieve a more fair and solidary world that works to reduce inequality as the problem at the heart of development. An objective of this nature implies a transition towards a new institutionality of globalized economics rather than towards greater globalization, as is perpetuated by the current institutionality (Fitoussi and Stiglitz, 2011).

2 This change in trends is even more evident when examining the different scenarios projecting the future, as the National Intelligence Council (2012) has done. An alternative point of view argues against the preponderance of emerging economies, such as that set forth by Sharma (2012).

3 Cooper and Helleiner (2010) explore the possibility that the G20 has produced more deep and meaningful results with a broader scope than those of a mere anti-crisis committee.

4 The role of the Mexican government as a sounding board for industrial countries and their proposed agenda did not prevent the ultra-conservative American Enterprise Institute of Washington from suggesting that Argentina, Indonesia, Russia and Mexico should leave the G20 and be replaced by Malaysia, Norway, Singapore and Switzerland, under the argument that these four countries did not meet the economic criteria or rule of law that the group should demand. See Brill and Grassman (2012).

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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