Weekend America

Inside the G-20

John Moe

NOVEMBER 15, 2008

A discussion after the 2008 G-20 Finance Meeting.

(ANTONIO SCORZA/AFP/Getty Images)

Leaders of the world from 20 countries are gathering this weekend in Washington, DC. They're expecting to come up with a financial plan that will save human kind for eternity. Okay, maybe not eternity. And they probably won't come up with a plan in a weekend, but c'mon, it's a start. What are they doing behind closed doors? During his tenure as economist for the International Monetary Fund, Ken Rogoff got to know his way around these economic summits. Now he's a professor of economics at Harvard.

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John Moe: Once the press leaves, once all the pictures are taken and everybody waves and walks inside the room and the doors close, what happens on the other side of those doors?

Ken Rogoff: Well, to be honest, where they have the big meetings, not much. You do get a pulse of the world. They will each speak. They're going to be largely prepared texts, and I think it would be pretty interesting to hear. Even if you study these things, just hearing from Saudi Arabia, Brazil, Turkey, Italy - just hearing each of their perspectives is kind of interesting. They also have opportunities here for what they call bilateral meetings - one on one, one on two, and I think that's where they're looking to close the big deals.

Moe: What are the stakes this weekend?

Rogoff: Well, the total economy is in awful shape. It's in danger of going off a cliff, and they need to appear to be doing something. It's very, very hard to actually get something done in a gigantic meeting like this with heads of state from 20 countries.

Moe: And it comes at an interesting time in US leadership. What will the status of Bush and Obama mean in this particular meeting?

Rogoff: I actually think it's a good thing, because often the US is so dominant, even in proportion to our size. We're a big gorilla at these things. We really could use some creativity here. Do you have a big spending fiscal policy? Do you do tax cuts? How aggressively should we do monetary policy? How do you restart the banking system? And I think it's a good thing to give space for other countries to give their ideas instead of having the US dominate so much. I think that might lead to a better solution, not just for the rest of the world, but for us.

Moe: How should we best read this situation and figure out what went on? What should the watch-words and the signals be that we can look for to judge how the weekend went?

Rogoff: I expect that we'll have to read between the lines of what they say. For example, how are they going to deal with global poverty? The African countries are experiencing catastrophic situation. Are they going to reinforce the role of the International Monetary Fund? It's been much, much weakened. Its big problem is that it doesn't have enough representation in Asia. It's way over-weighted in Europe. I would be floored if we actually saw some movement there, but the crisis is so severe, it's just possible maybe the Chinese, the Indians and the Brazilians will manage to negotiate something. Of course, the most likely thing is that we'll just be told that they care a lot, and they're going to try very hard.

Moe: Ken Rogoff is a professor of economics at Harvard. Ken Rogoff, thank you so much.

Rogoff: Thank you.

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