G20 summit wraps up with some success – for nations and Obama

President Obama, with a tired smile, declared his first job of hosting a G20 summit a success, an opportunity to lay the groundwork “for longer term prosperity.”

The main achievement of the global event was the institutionalization of the G20 as the new economic forum for world leaders to provide tighter coordination of their economic policies and an effort to keep imbalances from taking place. The world leaders also agreed to keep their stimulus activities going until their economies recover. And, they agreed to tighter supervision of the financial community.

“Here in Pittsburgh we have taken steps to secure a strong sustainable balanced growth,” said Obama in a statement before a press conference immediately after the G20 ended.

But, the world leaders were unable to agree on an exit strategy for their massive fiscal stimulus. And, they disappointed some environmental groups who were hoping for some concrete commitment of money to help developing countries pay for shifting from fossil fuels.

Obama himself admitted there was still work to be done. “Too many Americans are out of work,” he said.

Some outside observers felt the Summit was a success because it expanded the number of nations participating in the economic talks. “It brought together the old world and the new world,” says Andrew Cooper, a distinguished fellow at the Centre for International Governance Innovation in Waterloo, Ontario.

He says it also showed the nations could work together with compromises. For example, China got some IMF reform that will give it a greater voice in the institution. In return, he says, China agreed to increase its domestic consumption without having fingers pointed at it for its trade imbalances.

Obama believes the summit was successful for another reason. It was held in Pittsburgh, a city that has had to reinvent itself.

“This city has known its share of hard times,” he said, “but Pittsburgh picked itself up, it dusted itself off, and is making the transition to job creating industries of the future from biotechnology to clean energy. It serves as a model from the 20th century to a 21st century economy.”

But the group also failed to tackle climate change, which concerned some participants.

"This is a test of credibility for the G20 -- failure is not an option,” said Jose Manuel Barroso, president of the European Commission in a statement.

Some environmental group were disappointed by the summit. Although they had campaigned hard to be heard, they were disappointed that there was no specific amount of money pledged to finance developing nations’ shift away from fossil fuels.

“We estimate it will be at least $140 billion a year by 2020,” says Steven Herz, an advisor to Greenpeace. “That includes support for reducing reliance on fossil fuels, support for adaptation and protecting the forests.”

Mr. Herz was also hoping to see some kind of clear statement on when the world will eliminate the subsidy of fossil fuels. In the statement, the G20 said it would work towards that elimination in the medium term.

“We know it can’t happen immediately but the question is when,” Herz says.

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At G20, US pushes to curtail banker risk taking. Read about it here.

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