The G20 and the Inequality Crisis
In 2009, the G20's emergence as the world’s leading forum for addressing global economic challenges helped pull the world back from the brink of depression. Today, the G20 must play a similar role in addressing a challenge that has become no less urgent.
LONDON – Almost a decade ago, facing a near-collapse of the financial system and the risk of a depression, the world needed a new form of leadership to navigate and restore confidence in the global economy. That’s why, in 2009, at his first global summit as US president, Barack Obama joined then-British Prime Minister Gordon Brown to spearhead the G20’s upgrade, making it the world’s preeminent economic forum. What they created helped solve one immediate problem, but it let linger another global challenge.
With the Obama-Brown upgrade, the G20 – comprising 19 of the world’s largest advanced and emerging economies, plus the European Union – took over the role played by the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom, and the US). Obama and Brown knew that a group that did not include rising economic powers, like China and India, could not propose effective solutions to the global economy’s biggest problems.
Whatever one thinks of the G20 – and it is by no means perfect – this more inclusive grouping helped to overcome the consequences of the 2008 global financial crisis. With an expanded coterie of world leaders taking charge, jittery financial markets stabilized, and the G20 then helped launch, and sustain, a global economic stimulus, led by China, which reversed the downward spiral.