Obama the summit veteran

This post from Evening Standard political editor Paul Waugh is a must-read:

Much ink will be spilled tonight and tomorrow about Gordon Brown personally securing various victories in the G20 London summit.

But here’s a fascinating clue to the real power broker. Conducting himself assuredly as if he were a summit veteran rather than a first-timer, Barack Obama appears to have been the crucial player in securing a form of words on the thorny issue of tax havens.

American sources have now revealed that it was the US President who stepped in to knock heads together (in the nicest possible way) to get Sarko and China’s President Hu to come to an agreement.

In the final plenary session with just minutes to go before a deal had to be signed, Sarkozy and Hu were having a heated disagreement about tax havens. France wants urgent action, while China fears a crackdown would hurt banking centers in Macao, Shanghai and Hong Kong.

As they went through a revised draft, the exchange between Sarkozy and Hu got so heated that it was threatening the unity of the G-20 leaders’ meeting.

Sarkozy specifically was pushing for a list from the OECD to be included in the G20 Leaders’ Statement. China, which is not a party to the OECD, opposed any such list being included in the final Leaders’ Statement.

But Mr. Obama stepped between the two men, urging them to try to find consensus, and giving them a “pep talk” about the importance of working together.


Green stimulus – fine words, little action

I have long thought that we’ll live to regret our failure to use the current crisis to nudge the global economy onto a greener trajectory. A WWF/E3G report, published today, heightens this fear.

By weighting elements of national stimulus packages, it offers a quick and dirty estimate of how green each one is. The answer is ‘not very’ with the UK’s risible effort one of the worst offenders.

The share of ‘climate friendly’ stimulus is small, researcher find, and it’s more than offset by investment in roads (including one to Manchester airport) and fossil fuel R&D (yes – read that and weep).

You can quibble with the analysis. Investment in nuclear is not included on the green side of the ledger – which seems unfair on the French, who have low per capita emissions relative to GDP and expect additional nuclear investment to push them lower. But the scoring is transparent and easy for others to replicate with different weightings.

And there’s a much bigger point: why is it up to a couple of NGOs to do this work? By now, the G20 should have set up standardised and sophisticated systems for monitoring the net carbon impact of each country’s stimulus package.

That they haven’t shows how confused and fragmented our thinking remains about the interlocking crises the world faces.

Disclosure: I recently agreed to act as an adviser to E3G in the run up to Copenhagen, but have had no involvement in any aspect of this report.

A bridgehead for bloggers

Today’s summit marks the first time that bloggers have been included as fully accredited members of the press at a heads’ level summit meeting – in their own right, that is, rather than because they persuaded a newspaper to accredit them (which remains the route that a lot of NGO campaigners have to follow).

Another first from today: during the Chairman’s press conference, Gordon Brown called on one of the G20 Voice bloggers, Richard Murphy, to ask one of the questions: the first time a blogger has ever asked a question at a heads’ level summit press conference.  (Newsnight have already booked him for an interview for tonight.)

The organisers of G20 Voice are ebullient, and they should be. As Tom Watson (who took the day off from being a minister of state at the Cabinet Office in order to sit here and blog with us) told me earlier, this is the result of a small group of quietly determined people focusing very hard in the run-up to the summit on the objective of establishing the blogosphere’s right to representation at such events.  It looks a lot like they’ve pulled it off.  Hats off to them.

Outcomes: a first cut

So: the outcome.  Here’s the communique – and three thoughts from me.

First, the biggest winner from today is the IMF. This is an organisation which looked like it might go bust just a couple of months ago; now, its funds have been trebled to $750bn, much higher than the $500bn that David Miliband was touting last week.

But the IMF’s win isn’t just financial; it’s existential.  At the beginning of last year, it was set to lose a sixth of its staff.  People were openly wondering what is was for.  And now?  The G20 has just issued a clear, ringing, and very public, declaration of its continuing centrality to global governance.

Here’s my hesitation, though.  If the declaration of faith in the IMF is clear, the path towards reforming it is much less so.  The communique calls on the IMF to complete the next review of quota votes by 2011, but says nothing about the principles that should underpin this review. It includes the traditional call for “greater voice and representation for poor countries”, but doesn’t get into specifics.  As Oxfam have put it, the IMF’s back, it’s big and it’s bad.  Whether it’s reformed is another question.

Second, the movement on tax havens is actually pretty significant.  The communique says that “the era of banking secrecy is over”, and actually, it might be right.  We’re told to expect a list of tax havens, broken down into ‘white’, ‘grey’ and ‘black’ – and Stephen Timms, a junior UK Treasury minister, briefed this morning that he expects sanctions against countries that don’t sign up to the required disclosure standards.

For development advocates, tax havens have long been a massive bugbear.  Back when I was working a DFID at the time of its 3rd White Paper in 2006, tax havens were already starting to be recognised as one of the most critical policy coherence issues in development – but it was clear there was no chance of getting reform of them onto the global agenda.  A lot can change in three years…

Third, a big disappointment: climate change.  I blogged earlier that not much was expected on this, and so it has proved. On green new deals, in particular, the lack of numbers is a very major omission.

State of play at lunchtime

OK, just had chats with a couple of senior UK officials, and here’s where things are at inside the negotiations:

– Lots of discussion about SDRs and IMF finance.  It looks like we’re heading towards a $250bn SDR issue as part of a larger package on IMF financing; things look hopeful for getting beyond the important $500bn level.  Germany has apparently been a bit difficult over the SDRs issue – they’re keen on applying a lot of conditionality.  The SDR discussions were also complicated by China’s recent suggestion of ending the dollar’s role as global reserve currency, and using SDRs instead – this made the US somewhat suspicious of SDRs in general.

– A big fight is underway on tax havens. Sarkozy’s going in hard for tough language, but China is against as it’s worried about the effect on Hong Kong and Macao.  Gordon Brown is looking for a compromise on that right now at the lunch.  The Czech Presidency has been ‘unhelpful’.

– On trade finance, there are hopes for a pretty good package, which would then be presented as a key outcome for low income countries.

– But it looks like today’s big disappointment will be on climate change and green new deals.  Both sources told me that there will be no numbers at all on green new deals, either in terms of percentages of stimulus packages, or overall dollar totals.  Worse, there are real struggles underway on keeping language about Copenhagen in the communique at all.  The issue here is apparently largely with China – which is reportedly worried about linking climate and the G20 process, on the basis that this would provide Congress with another platform for protectionism. Right now, all language on “greening”, “low-carbon” and “Copenhagen” is out of the communique, at China’s request.

That’s it for now.  As ever, apply a discount rate to all this: this is about the time you’d expect host government officials to be lowering expectations, so that they can pull a rabbit out of the hat in about an hour’s time…