Another day, another photo op at the G-20.

Photographer: Glenn Hunt/Getty Images

What to Make of the G-20

Mohamed A. El-Erian is a Bloomberg View columnist. He is the chief economic adviser at Allianz SE and chairman of the President’s Global Development Council, and he was chief executive and co-chief investment officer of Pimco. His books include “The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse.”
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Despite the enormous efforts of its Australian hosts, the weekend’s meeting of the Group of 20 leaders in Brisbane will be remembered more for the theatrics of Russian President Vladimir Putin than for breakthroughs on the solutions that a sluggish global economy desperately needs.

No, not all was lost for either that summit or for the Asia-Pacific Economic Cooperation meeting in China a few days earlier. But the accomplishments were generally disappointing, and they were much more bilateral than multilateral.

From his run-in with Canadian Prime Minister Stephen Harper to his abrupt early departure from the summit to “get some sleep,” Putin dominated much of G-20 news coverage. And with discussions failing to de-escalate tensions over Ukraine, the West is again having to consider an intensification of Russia sanctions, notwithstanding the risks for its own economies.

In the middle of this, however, the G-20 managed to sign off on anti-tax-evasion measures and on anti-corruption guidelines. And leaders took another step forward on a pro-growth approach as each offered specific structural reforms to be taken at the national level.  The problem, however, is this is unlikely to lead to the much-needed breakthroughs in growth and job creation needed in the G-20 countries. 

The missed opportunity was unfortunate given that the world’s most powerful leaders met at a time when global growth is slowing (and this morning’s poor Japanese growth number should be a further loud wake-up call). Because of the incomplete response, increasingly ineffective central bank policies face the risk of fueling financial instability down the road.

If anything, both the G-20 and APEC meetings confirmed again that multilateralism struggles these days, both outright and relative to bilateralism.

The most notable accomplishment to emerge last week was bilateral. The agreements between China and the U.S., notably on climate-change responses, were the result of old-fashioned two-country diplomacy carried out separately from multi-country negotiations. And they reflected how common interests between the world's two leading economies can produce agreement without requiring a convergence of the culture, values and mind-sets. There was also a  trade agreement between China and Australia.

Here is where multilateral meetings may help these days: They provide world leaders with air cover for delicate bilateral negotiations, without all the expectations and pressures that accompany more traditional two-country summits. But long gone are the days of the London G-20 meeting in April 2009 when proper multilateral coordination and agreements on meaningful actions helped the world sidestep economic depression.

(Corrects Stephen Harper's title in third paragraph.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Mohamed A. El-Erian at melerian@bloomberg.net

To contact the editor on this story:
Katy Roberts at kroberts29@bloomberg.net