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The Paul Martin legacy band and travelling liquidity roadshow


 

It is good to see it being acknowledged that this business of convening the heads of government of, say, 20-ish countries to put out a really big global fire is something Paul Martin has been advocating for a very long time. As a refresher, here’s Martin advocating the leaders’ G-20 in Foreign Affairs magazine in May/June 2005, when he was still prime minister. That article begins with the all-time classic Paul Martin opening line: “In 1995, the peso crisis struck Mexico, and Latin America seemed to teeter on the brink of economic collapse.” Wake up. Wake up! The Mexican peso crisis is a metaphor. He’s not actually going to walk you through it again.

Martin’s thesis was that the G-20 finance ministers’ meetings, which he so dearly loved when he was finance minister, should be replicated among heads of governments once he became one of those. A tremendous amount of energy at the sometimes-splitting, sometimes-not Department of Foreign Affairs And/Or International Trade was devoted to getting a so-called L-20 (or leaders’ G-20) to happen.

Response was tepid, if by “tepid” you mean “never, but never gonna happen.” I believe the Australians shared Martin’s enthusiasm. The Americans could not possibly have been less interested. A Japanese diplomat I quizzed was amazingly blunt, for a Japanese diplomat: “We are very against.” The Brits needed persuading that there would be a subject for an entirely new summit meeting, with the attendant expense, organizational headache, time commitment and bureaucratic followup.

This business of a subject proved an amazingly tough nut to crack. Martin was eager for 20-ish heads of government to meet. He was less clear on who they should be — the same as the finance G-20? Plus Israel? Plus Arab countries? South Americans? Which ones? China, Korea, Japan, Indonesia: pick two but not three — quick! Quick! But the guest list was a cinch compared to this question of what the meeting would be about. Martin had no end of ideas. Global epidemics? The money networks of global terrorism? Shipping? Infrastructure? Refugee migration?

The big problem facing the L-20 idea was that it was hardly clear to anyone except Martin why routine matters should be treated outside routine international forums. Because here’s the thing. It’s absolutely true that the G-8 is a restrictive, narrow forum for discussing problems that very often stretch outside the North-Atlantic-democracies-plus-Japan-and-sometimes-Russia. But it’s not as though other meetings with different geometries are exactly rare. British post-colonial diaspora, minus the U.S.: we call that one the Commonwealth. North-meets-south, without the Yanks and Brits to drown everyone else out: that’s the Francophonie. U.S. and Canada plus Asian tigers: that’s APEC, plus you get cool local garments to take home from the summits. Canada+U.S. plus their own problematic and promising backyards: Summit of the Americas. Rich people + heads of rich goverments + Angelina Jolie: that’s Davos. Everyone at once: United Nations.

None of these geometries is perfect, but they’re all handy, and over the course of a year, a prime minister who attends all of them can get a hell of a lot done. And there is precisely one country whose prime minister gets to be a big fish at meetings of the Commonwealth, the Francophonie, APEC and the Summit of the Americas, all while at least having a seat, if no particular clout, at the G-8 table. That’s Canada. So I’m honestly not exaggerating when I say the general reaction from Canada’s friends abroad when Martin kept showing up at all of these meetings with an idea for another meeting was bafflement.

But that’s when business was routine. In a crisis, the choice of topic is less of a challenge — they can talk about the crisis, after all — and the details of the membership list are not insurmountable. So the L-20 came together quite rapidly. The unanswered questions are whether this meeting would have happened anyway, in the absence of Martin’s lobbying; and whether the L-20 as an institution will outlive the topic of its first meeting.


 
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The Paul Martin legacy band and travelling liquidity roadshow

  1. Who has all the cash, and which are the forums that include them?

  2. Ironically, the international credit crisis is actually something that is very, very important.

  3. would they use the forum to come up with some kind of “prohgrum” to deal with the crisis?

  4. Style, if you read what Martin has written about the G-20, or listen/watch to a number of interviews with him on the subject, he was pushing the idea for precisely this sort of reason. Just like Wells wrote up top there, the Mexican peso crisis was very illustrative of the need for broader cooperation on these issues. Not to mention the Japanese recession & wider Asian financial issues of the 90s. You’re right that Martin never went “hey, we’re going to have a completely unprecedented global credit crisis,” but who did? His point was that with the increased interdependence of the global system, you can’t really get anything done without having more than the G-7/8 around the table.

    Come on, I’m sure you can hear his voice in your head. He would say something like, “Fundamentally, what I’m saying is that you can’t ignore the Chinas, the Indias, the Brazilians, all the developing countries that clearly, very clearly, have a tremendous amount of power economically in the 21st century.” He’s probably somewhere saying that right now.

    More seriously, it was very prescient of him and I am with Mr Wells on being pleased that he’s being recognized for his efforts on that front. I think Paul Martin is a actually very smart guy at heart, but he gathered (one might say, accreted) a coterie of True Believers over the years that dragged him down into the bloody struggle for power inside the Liberal party. I think he had benign intentions, but that doesn’t seem to count for much when you live inside a bubble of plotters and cheerleaders and with the legacy of a never-quite-PM father.

    Anyway: I think G20/L20 is a good thing, and I hope it will end up being more regular. It will be a better reflection of reality – which ought to, hopefully, result in better decision-making.

  5. The Mexican peso crisis started in 1994, not 1995. Hand back that Best Canadian Finance Minister Ever trophy, if you will, Mr. Martin.

  6. I love how KRB thinks Martin should hand back his trophy just because he said the Mexican Peso Crisis started in 1995 when in fact it started on December 20, 1994. OH MY GOD, HE MISREMEMBERED A THEN TEN-YEAR-OLD DATE BY TWO WEEKS. HAND BACK THE TROPHY!

  7. There’s a trophy?

  8. Mr. Wells: ask KRB. He’s the one that wanted Martin to hand it back.

  9. our mediocrities are the most raging of any country on Earth.

    I think the same thing whenever I read your many, many, unsubstantive posts.

  10. I wonder: is Ti-Guy as annoying in real life as he is online? I suspect yes.

  11. Ti-Guy…. Annoying ? I don’t get it.

    He’s fine by me.

    Now, Kody, jwl, myl, and the gang …..

  12. Paul Krugman on Charlie Rose tonight. When he could get a few words in around Rose’s constant inane interjections, the message was grimly and barely encouraging. The financial mess still has a long way to go. And the real economy mess hasn’t really hit yet.

  13. I agree with Paul, the one thing I could never understand about the G-20 is why Canada would advocate for it.

    We are at the bottom on the G-8. Make it the G-6 or G-7 and Canada is out. Make it larger than the G-8 and ever successive voice dilutes Canada’s influence.

    The one thing I can’t stand is Canadian politicians who can’t do the one thing that countries are supposed to do in world affairs: follow self interest. This goes or our mission in Afghanistan too.

  14. Jim: Enlightened self-interest realizes that benefiting yourself in the long-term can sometimes mean disadvantaging yourself in the short term.

    Global reality: China, India, and many of the countries in South America are growing extremely quickly. We are currently among the “top dogs” in the world. However, unless we turn to waging war on them, that will not last, as other countries have advantages of population, of resources, of technologies already developed, and of being able to learn from our mistakes instead of their own.

    When these other countries equal or surpass us (as they eventually will), is it better to be thought of as the country that was looking out for others, or as the country that never did anything for others unless it conferred an advantage to itself in doing so?

  15. Jim is right. Who was (logically) the one pushing hardest for the proposed G8 economic summit to become the G20? Kevin Rudd of Australia. That way he gets to go and Australia’s interests are represented at the big table. Our interest was to keep this to the G8 so that our voice had some chance of being heard. But once it became obvious that you would have to invite some other players to the financial crisis summit (especially China and Saudi Arabia, because they are footing the bills here), it became hard to justify any particular list of countries. Some – Robert Zoellick of the World Bank and next year’s G8 host Silvio Berlusconi – are pushing for a permanent G14. But even here there are differences – G8, plus the O5 (the five outreach countries invited as observers to the G8 – China, India, Brazil, Mexico, South Africa), but Zoellick wants Saudi Arabia in slot 14, while Berlusconi wants Egypt (who aren’t even in the G20).

    The absolute worst case scenario for Canada is that the G20 or G14 become institutionalized with annual summits etc., then the inner core of the G8 – the US, UK, France, Germany, and Japan, perhaps with the EU – form some sort of executive body where the real decisions are made. Paul Martin’s vision will be fulfilled, but Canada would lose its longstanding privileged position as the smallest member of the big kids club.

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