Latin America in the G20: Continuities and Ruptures of the Regional Agenda (2008–2018)

Abstract

The Group of 20 (G20) broke onto the global scene shortly after the bankruptcy of the financial giant Lehman Brothers, which until then had been the fourth-largest investment bank in the United States with a 158-year long history. On 15 September 2008, the world witnessed the unthinkable. The international financial system was crumbling from within and traditional policy tools were unable to stop the fall. Since mid-2007, the collapse of housing prices and the implosion of the subprime mortgage market bubble had generated a wave of bankruptcies in the financial sector in the United States and Europe. In October 2008, both the TED spread indicator, which accounts for the level of stress in the U.S. banking sector, and the Emerging Market Bond Index (EMBI) Global spread index, which reflects the combined risk of 61 emerging markets, reached their historic peaks [IMF, 2017]. The message was clear: the financial crisis was not easing and the risks of global contagion were already being felt. It was then that President George W. Bush, in the final months of his second term, decided to convene a summit of the heads of state of the main global economies. Reflecting the emerging multipolar order, in particular the rise of China, Bush issued invitations to his peers among the G20. The exclusive Group of 7 (G7) at the table of global governance - comprised of the main advanced economies - was thus expanded to include the largest emerging economies as well.[1] The G20 is comprised of nineteen national economies, plus the European Union, that are considered “systemically important” and that together account for more than 80% of global product, 75% of international trade and 66% of world population. Since 1999, the group had operated as a technical forum for financial coordination between finance ministers,[2] but in November 2008 the first G20 leaders’ summit took place in Washington DC. The presidents of the three largest Latin American economies - Argentina, Brazil and Mexico - participated in this inaugural summit. In the decade that has passed since that first meeting, the leaders of the G20 have met a total of 12 times, and plan to do so again in November 2018 in Buenos Aires under the annual (rotating) G20 presidency of Argentina. Previously, Mexico had hosted the leaders’ summit in Los Cabos in 2012 and Brazil had served as the G20 coordinator in 2008 during the transition from a ministerial forum to forum for heads of state. This article explores the role and main contributions of the three Latin American economies in the G20 during the last decade, focusing in particular on the continuities and ruptures in the regional agenda towards the forum. With this goal in mind, the analysis begins with an overview of the metamorphosis of the G20 during its first decade. Then, the specific Latin American path is explored. The article closes with a brief presentation of an alternative approach and agenda for the G20.