Document(s) 5 of 21

As the twentieth century waned, the world seemed smaller, the problems it faced more intractable, and the tools for meeting those challenges less effective. Paradoxically, at the same time, the prospects for humankind seemed brighter than ever. The pace of change was accelerating in field after field. The Berlin Wall crumbled, genetic engineering became a reality, the internet transformed business practices, and global warming moved from the science lab to the front page and on to government leaders for action. Old certainties vanished, “new eras” beckoned, and those with the luxury to contemplate the future course of events were whip-sawed between hope and despair. Whatever the promise of the new millennium, however, the old enemies – Pestilence, War, Famine and Death – still stalked the land.

The global economy was charging to the end of the century but, through the nineties, a steady drumroll of financial crises called into question the stability of the international system established fifty years earlier at Bretton Woods. The Mexican crisis of December 1994 led to the collapse of the peso and was followed by sharp declines in other emerging markets. Crises in Indonesia, Korea and Thailand in 1997–98 affected the entire region and badly damaged the Asian “tigers”. Financial instability attacked Russia in 1998, Brazil in 1998–2002, Turkey in 1999–2002 and Argentina in 2000–01. In the developed countries, and especially in Clinton’s America, the economy effervesced, but the “dot-com bubble” driving it had speculative overtones which ultimately led to the stock market collapse in the fall of 2001. At the same time, the Chinese and the Indians were multiplying their linkages to the world economy so effectively that in Asia the number of people living on less than $1 a day dropped by nearly a quarter of a billion from 1990 to 2001.¹ Globalization stirred passions in the streets even as it generated jobs and spread wealth (however unevenly).

In the 1990s, the threat of war between the superpowers may have ended (since only one was left), but peace seemed as elusive as ever. In 1991 the United States successfully led an international coalition to liberate Kuwait from Iraqi occupation, but any hope that a broader approach to collective security would evolve was shattered in the streets of Mogadishu and the killing fields of Srebrenica. Although the Americans extricated themselves from Somalia and brokered the Dayton Peace Accord, the political will in the US to expend blood and treasure to keep the international peace evaporated. Perhaps most shamefully of all, a world bereft of leadership from the United States or anyone else stood by while the massacres in Rwanda mocked the notion that the second millennium was ending with a more “civilized” global community.

And then, as the century turned, two large aircraft flew into two large buildings in the centre of Manhattan, and thousands died. Terrorist acts on a large scale in an urban setting were not new. London had endured IRA bombings; both metropolitan France and Algeria had seen similar guerrilla activity in the fifties and sixties; organized violence in developing country capitals was not uncommon. But the American heartland had remained inviolate, even through two world wars. On September 11, 2001, the world watched in real-time horror as the tragedy unfolded in its self-proclaimed “media capital”. The (more or less) ordered Westphalian dispensation, with its borders, its national flags and its formal declarations of war seemed to evaporate.

The pale Horseman rode on.

During much of the nineties, Paul Martin was the Canadian Minister of Finance. His experience in this job solidified his conviction that managing ever increasing global interdependence was the biggest challenge facing the world community. During the early part of his time as Minister, Martin worked closely with the then Deputy Minister of Foreign Affairs, Gordon Smith. Smith acted as the Canadian “Sherpa”² for a succession of G-7 Summits,³ overseeing Canada’s substantive preparations as the Prime Minister’s personal representative. As part of these preparations, Smith sought input from Martin regularly not only on specific Summit agenda items but on trends in international thinking as the G-7 meetings evolved.

One interesting development they discussed was the growing desire of Leaders to broaden the Summit agendas past purely financial and economic matters. Substantively, Leaders added such topics as climate change, health, infectious diseases, water, famine, transnational crime, terrorism and controlling weapons of mass destruction (WMD) to their deliberations. More importantly for the longer term, the focus kept returning to questions of governance – how to collaborate more effectively in setting a course for a world apparently dominated by the blind forces of globalization.⁴ As expressed in the words of the communiqué of the 1998 Birmingham Summit:

In a world of increasing globalisation we are ever more interdependent. Our challenge is to build on and sustain the process of globalisation and to ensure that its benefits are spread more widely to improve the quality of life of people everywhere. We must also ensure that our institutions and structures keep pace with the rapid technological and economic changes under way in the world.⁵

The financial crises of the late 1990s convinced the G-7 Finance Ministers that key emerging-market countries were not adequately included in the core of global economic discussion and governance. Paul Martin was a prime mover, in company with Lawrence Summers, the US Treasury Secretary, in the discussions which led to four initial meetings in 1998 and 1999 involving larger groups of countries (the G-22 and G-33), and eventually, in December 1999, to the institutionalization of a dialogue among a constant set of partners, the G-20.⁶ It is worth taking a moment to describe the G-20 and its ongoing work, because this grouping is the model, at Ministerial level, for the approach which Paul Martin and others have proposed to apply in the case of a similar group of world Leaders, the L-20. For Martin and his supporters, this was the way to make a smaller world more governable and fairer – to meet the Horsemen and to face them down.

The members of the G-20 are the finance ministers and central bank governors of 19 countries – Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States. The European Union (EU) is also a member, represented by the rotating EU President and the European Central Bank.⁷

The intent of the grouping is clear in geographic and economic terms. To the original G-7 (G-8 with the addition of Russia in 1997) from the developed world have been added ten leading emerging-market countries plus Australia and the EU. The regional distribution is not precise (Europe is seriously over-represented and Africa the reverse), and the list is biased towards large countries (in terms of geographic extent, population and size of economy), arguably making it difficult to take full account of the specific concerns of the vast majority of the (often quite small) countries on the rolls of the United Nations. On the other hand, the G-20 does represent about 90 percent of global gross national product and 80 percent of world trade, as well as two-thirds of the world’s population. So, if one assumes that the world should have a management committee larger than the big three – the United States, the European Union and China – but smaller than the full membership of the United Nations (192 at last count, with more on the way as some countries break apart), then the G-20 is not a bad compromise.

As is often the way in international decision-making, the simple argument carried the day. Paul Martin recalled, in a November 18, 2001 interview, a conversation with the US Secretary of the Treasury, Lawrence Summers. Martin said – “You know, nobody’s going to follow a G-7 dictate. They’ve got to be at the table and be part of the solution. As a result of that conversation, the Americans agreed and the G-20 was formed.”⁸

Since its formation, the G-20 has addressed a range of issues, including agreement about policies for growth, reducing abuse of the financial system, dealing with financial crises, and combating terrorist financing. Most broadly, the G-20 has aimed to develop a common view among its members about the evolution of the global economic and financial apparatus. This has included work on possible reform to key institutions such as the World Bank and the International Monetary Fund and the generation of credible analysis on key issues such as demographic change, progress toward regional integration and understanding the development of international commodity and financial markets.

On its own terms, the G-20 has been generally successful in allowing its members to pursue a focused, consistent agenda. Paul Martin’s view of the lessons to be drawn from the G-20’s experience was expressed in an article appearing some years later (2005) in Foreign Affairs magazine.

First, some decisions – no matter how technical – can only be made at the political level. Second, despite the many differences that exist within the group, there are also surprisingly large areas of commonality; all the countries are wrestling with similar issues and have drawn similar lessons from past failures. Third, when national decision-makers discuss issues openly and frankly, it is remarkable how much can be accomplished (never underestimate the value of peer pressure in getting to yes). The G-20 has also allowed world leaders to move from a focus on crisis management to a focus on steady improvements in international economic stability and predictability.⁹

After his pivotal role in establishing a G-20 and seeing it meet its original objectives so successfully, Martin became convinced that a similar forum was required for political leaders. He called for creation of an L-20 (the Leaders-20), a results oriented body dedicated to those issues on which clear political leadership was needed to move the world forward. In 2003, he brought this idea to Gordon Smith and to another close associate, John English, the eminent Professor of History and Political Science at the University of Waterloo, for proving out. By this time, Martin had a very immediate reason for wanting to test the practicality of the L-20 idea – he was making a push to be Leader of the Liberal Party of Canada, and he had every expectation of making the L-20 approach an initiative he would take forward as Prime Minister.

In 2003, Gordon Smith was head of the Centre for Global Studies (CFGS) at the University of Victoria¹⁰ and John English had just become head of the Centre for International Governance Innovation (CIGI) at the University of Waterloo.¹¹ Smith’s extensive government experience as a federal Deputy Minister (especially of Foreign Affairs) combined with English’s distinctive academic and political background (he served as a Liberal Member of Parliament from 1993 to 1997) made them logical choices for undertaking this project. The two organizations they managed would serve as the secretariats and fund-raisers for the exercise.

The hunt for the Horsemen was on.

Endnotes

¹ United Nations, The Millenium Development Goals Report, 2005. United Nations Department of Public Information, New York, 2005, DPI/23990, p. 6.

² The term “Sherpa” refers to the senior government official who acts as the personal representative of a Government Leader during preparations for a Summit meeting. Often this official is the permanent head of the country’s Foreign Ministry. “Sous-sherpas” (usually one official each from the Foreign Ministry and the Finance Ministry) assist the Sherpa.

³ Annual meetings of the leaders of the seven leading industrial countries – United States, United Kingdom, Japan, France, Germany, Italy, Canada – which began in their current form in 1976.

⁴ Personal interview with Gordon Smith, April 5, 2006.

⁵ The Birmingham Summit, 15–17 May 1998, Communique, paragraph 1. Retrieved April 3, 2006 from http://www.g7.utoronto.ca/summit/1998birmingham/finalcom.htm

⁶ Personal interview with Gordon Smith, April 5, 2006.

⁷ For the history and activities of the G-20 Finance Ministers group, see the website of the current G-20 chair, Australia. Retrieved April 6, 2006 from http://www.g20.org/Public/index.jsp

⁸ Barry Carin, Gordon Smith, Making Change Happen at the Global Level, L-20 project paper, 2003, quoted in footnote 9. Background paper prepared for L-20 meeting, October 26–27, 2003, Waterloo, Ontario – retrieved April 7, 2006 from http://www.l20.org/publications.html#G20

⁹ Paul Martin, A Global Answer to Global Problems. Foreign Affairs, May/June 2005 http://www.foreignaffairs.org/

¹⁰ For background on the Centre for Global Studies, see their website at www.globalcentres.org

¹¹ For background on the Centre for International Governance Innovation, see their website at www.cigionline.org

Document(s) 5 of 21