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Ten years have passed since the first presidential summit of the G20 in Washington DC, and once again the host nation is in trouble.
While the first G20 in 2008 was confronted by threats to the global economy after the collapse of Lehman Brothers, Argentina’s deep currency crisis this year has, say local experts, cast a shadow over the Buenos Aires forum.
Recent months have brought a devaluation of the Argentine peso against the dollar of more than 50 per cent, 60 per cent interest rates and a $56bn IMF emergency bailout. Such factors have combined to tarnish President Mauricio Macri’s image as the man who would return Argentina to economic health.
Further, the concern among some local commentators is that the problems may have sapped the government’s ability to handle the summit competently. As host, Argentina is technically only a facilitator but has the potential to play a key role when much is at stake for the G20. Most immediately, the summit presents an opportunity to stave off a trade war between the US and China.
Some fear for the very future of the G20, not least because some of its most powerful members, notably the US, thumb their noses at multilateralism.
The precedent set by the summit in Hamburg last year is not encouraging. There, the US prevented a group consensus by refusing to sign up to an agreement on climate change.
Nonetheless, Pedro Villagra Delgado, an expert in international law and the Argentine diplomat responsible for co-ordinating the latest G20 meetings, remains upbeat. He says Argentina’s status as one of the smaller group members is to the collective advantage.
“If the presidency was held by of one of the biggest actors of the group, [that country] would not be able to be an honest broker, which is our role,” says Mr Villagra. He says this is especially important given concerns of a trade war.
“When you have a situation that needs dialogue, the G20 becomes more important than ever,” he adds. It is the “pre-eminent mechanism” for world leaders to come together and discuss global problems informally.
Argentina, however, faces concerns about its credibility, says Patricio Carmody, of the Argentine council for international relations, CARI, and a former vice-president at US food and beverage group PepsiCo. Among the topics Argentina has chosen for the group to focus on is that of infrastructure for development, which touches on an uncomfortable area for the host country, he says.
In a recent scandal, a series of notebooks kept by the chauffeur of a senior official in a previous Argentine administration detailed bribes related to public works projects. Even though this took place before Mr Macri came to power, it served as a reminder of corruption in Argentina’s infrastructure sector.
Similarly, the country’s credibility on the G20’s core subject matters of trade and finance are in question. Despite Mr Macri’s best efforts, Argentina remains one of the most protectionist economies in the world, mostly thanks to his party’s minority in the Argentine congress and resistance from trade unions.
Moreover, this year’s peso devaluation and IMF bailout are reminders of Argentina’s longstanding tendency to suffer bouts of financial vulnerability.
“The timing is unfortunate,” says Mr Carmody. “The G20 was meant to be a prestige move to show with our heads held high how integrated Argentina had become with the world. We were expecting things to be much better by now — instead we are on the back foot.”
Thanks to the IMF deal, he says, hosting the G20 is now “an even bigger challenge”. The US has a “big influence in the IMF”, Mr Carmody says, adding that Argentina has been dependent on US support at the fund. As such, Argentina must work to ensure that its status as neutral is clear during the G20 talks.
In the build-up to the summit, Argentina appears to have fared reasonably well. Mr Villagra points to preparatory meetings held in the coastal city of Mar del Plata in September, in which G20 ministers reached consensus on important areas including trade. “That is not a bad achievement,” he says, of the group’s agreement to tackle the urgent need for improvement in areas such as trade dispute settlement.
Many are sceptical that any G20 breakthroughs will be made on trade, and a unified position at the presidential level on climate change seems, if anything, more unlikely. “We can’t expect great solutions from the Buenos Aires summit,” says Jorge Argüello, a former Argentine ambassador to the US.
Benjamin Gedan, Argentina project director at the Wilson Center in Washington, says Argentina would be satisfied with a “banal and forgettable” forum. He points to Argentina’s modest goal at the World Trade Organization’s summit in Buenos Aires a year ago, that the unity and purpose of the WTO would at least not be weakened.
“Frankly, given how disruptive US policy is these days, their hope is similar now — that the G20 just survives.”
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