But the G-20, while it did not lack for lofty aspiration, lacked just about everything else. It had no secretariat, staff, offices, or resources. To get anything actually done, the G-20 needed to look elsewhere for follow-up and implementation of its mandates and pronouncements. In many cases, the G-20 has looked to the IMF to effectively play these roles. Major post-financial crisis G-20 initiatives are now undertaken in large part by the IMF.
Over the past several years, the G-20 finance ministers' meetings coincided with those of the IMF. IMF biannual meetings posed a perfect opportunity to hold virtually simultaneous gatherings, with decisions and discussions in one forum often spilling over into the other. Both entities benefitted from the overlap, as G-20 requests could be agreed, clarified, and refined in real time with its implementation arm -- the IMF.
But this week's Tokyo meetings will not include a contemporaneous G-20 meeting. This is not, to be sure, because the world's economic problems have been solved, but rather because in 2012, Mexico held the rotating chair at head of the G-20 and, for its own domestic political reasons, accelerated the G-20's annual leaders' summit to June, instead of the usual November time, leaving an effective vacuum for the rest of the year. And, with a belligerent Vladimir Putin-led Russia scheduled to take over the leadership of the G-20 at the commencement of 2013, it is a safe bet that the golden days of IMF/G-20 cooperation are behind us.
In London and in Pittsburgh, the United States and the British presided over G-20 meetings that succeeded in demonstrating to the world that there was, at a time of absolute crisis, a will and a forum for the world to come together and agree a response. The IMF played a central role in both formulating and implementing that response. Now, four short years later, the G-20 has effectively lost its central role on crucial economic issues, and may, in fact, revert to virtual irrelevance. In its stead, a new, bolder IMF may seek to enhance its independent role. Not only does the IMF have financial and human resources to bring to bear, it also has legitimacy that the G-20, representing a small sub-set of the world's countries, lacks, with all 188 members having at least some representation.
With the Tokyo meetings this week, we are likely to see the continuing evolution of the IMF at a pace and in a direction that may enhance its role in an interconnected world increasingly dominated by macroeconomic issues. At the same time, U.S. influence over the institution is at risk of broad decline.
To be clear, this decline is both of our own doing and still reversible. Promised governance reforms and requested financial commitments are in our interests. The administration's failure to try to educate Congress as to the benefits of these initiatives may have been tactically and politically safe, but may well turn out to be a strategic error.
There are serious risks to U.S. interests emanating from what the Eurasia Group's Ian Bremmer calls "a G-zero world" -- an international system without clear leaders. In anything even approaching that world, the IMF will provide much-needed ballast. It will be a shame if the United States finds itself losing influence at an increasingly powerful institution for no good reason.
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