Obama Advisor Previews G-20 Summit

With the G-20 Summit approaching tomorrow, Obama Deputy National Security Advisor Mike Froman spoke about the high stakes at the upcoming meeting.

It's no surprise to anybody that we're gathering the G20 at a time of the most severe economic and financial crisis in generations.  These 20-plus countries represent about 85 percent of the global economy and they come together at a time when incomes are falling, unemployment is on the rise, trade has collapsed and financial markets are strained in all of their countries.

To put this a bit in historical context, international cooperation at times of crises is very important.  Most people agree that the Depression was made great by the lack of cooperation, that the Latin American debt crisis of the '80s lasted a decade in part because there was difficulty in formulating a common approach.  But historically, it's proven difficult to cooperate around international crises because nations controlled their own fiscal policies, their monetary policies were dependent on independent central banks, and their regulatory policies were shaped by their own culture and national traditions.  And if you look back at the history of summits, there have been very few examples of summits that have achieved significant gains in terms of international cooperation during times of crisis.

This has become all the most important now because of the interconnectedness of the economy now, of markets now, and of this crisis -- in particular, financial problems in one country spread quickly to others, and exports to all countries are dependent on the ability of demand in each country to rebound. 

There was a global economic summit here in London in 1933.  The U.S. President did not attend and the summit failed to provide what at the time was seen as good direction to try and get out of the Depression at the time. 

The stakes for this summit are very high.  They are magnified by the fact that much has happened since the last G20 summit in November.  The last summit focused largely -- and importantly -- on a number of regulatory issues.  But the economy has declined in November and December, the crisis has spread, and the countries of the G20 have been focused on restoring demand and restoring growth.

And that really is the agenda here.  It's really two tracks: restoring growth, on one hand, and engaging in broad and deep regulatory and institutional reform on the other.

More on the talk here.

And if you're interested in the G-20 Summit, come to NDN's event tomorrow at noon, "The G-20 and Beyond: Challenges Facing the Global Economy." U.S. Rep. Adam Smith, Foreign Policy Editor Moises Naim, and NDN Globalization Initiative Chair Dr. Robert Shapiro will preview the summit and discuss the difficult challenges facing the global economy. Click here to RSVP.