 Good morning My name is Matthew Goodman. I hold the Simon chair and political economy here at CSIS delighted to welcome you all here Thank you for paddling here this morning on a soggy Friday morning in July Let me recognize our online audience in addition to the many people in the room We have a strong online audience. You're welcome to follow us on Twitter at CSIS and tweet tweet away Please turn off all of your noise makers and other devices so we don't disrupt the speakers We have started a tradition of doing events like this ahead of these big summits The G20 is the biggest of them all in the world in the area. I work on It will be held in Labor Day just after Labor Day in St. Petersburg, Russia And we normally would do this two or three weeks out But because of the summer holidays and everything we thought we'd get an early start So we are delighted to have a terrific lineup of speakers today Which we'll get started with in just one second We'll have after our two keynote speakers the Russian ambassador and the US Sherpa We will have two panels one an expert panel and then a very short break And then we're going to have a senior Sherpa perspective on on the G20 summit and the agenda there on So with no further ado, let me introduce Dr. John Hamery president CEO of CSIS, please Well, thank you all for coming. I Surprised to not see people dripping. You know, there's been a lot of water here these days So glad to have you here and that's a very important dialogue We're gonna have this morning and I want to say thanks to all of you for for braving it to get here You know, there are two forms of internationalism structural treaty-based internationalism and then Consensus internationalism We all know about structural internationalism places like the United Nations IMF, you know, where countries spend time developing a framework structure and It it it becomes it's one of the dominant. It certainly has been characteristic of Internationalism over the last 60 years The advantage of it of course is that it's normative, you know The next generation knows the things that are important because they've grown up with the institutions that shape the debate But these institutions also become brittle over time and they don't work as well over time so there's a preference often with countries to use Consensus-based international coalitions of the willing, you know, just find people that agree with you Let's go off and do it. The problem is it's it's efficient, but it's not normative It doesn't really carry over to the next big problem Well, this is what the international world community has been wrestling with and in many ways was the impulse to create the G20 you know that the IMF and the World Bank and the UN weren't going to be able to keep up and cope with the crisis as it was unfolding when the Great Recession was starting in 2008-2009 but you know, what were the Institutions that were available that were more flexible the G8 well the G8 is you know It's considered to be and it's a bunch of rich white guys Certainly isn't considered to be representative of the broad community But how do you bring a big community together? Well the international community chose to create something the G20 and I think it was enormously important in helping at a crucial time To give a sense of direction. I mean sovereign nations still had to implement things But there needed to be some form and method to bring it together and get some shared coherence That's kind of the foundation where we got here, but now we ask the question. Where is the G20 going? You know, is it really going to be a normative structure over time? How does it do that? I it's It's unclear And part of that's the backdrop of what we're going to be dealing with today in this conversation We're going to be thinking together people that have an interest. How do we find shared purpose in an international way on such a complex problem And not fall into the trap of having it You know drift into a structure that becomes brittle over time You know, is there a legitimacy in this configuration? Certainly, it's it's more broadly based Than the G8 is you know, but but is it really does it have does it have Command power, you know, so these are these are the kinds of questions now We're lucky one of the most skilled diplomats in the world is with us this morning Sergey Kizlyak is a very is a long-standing friend and We prevailed upon him to come you know obviously because Russia is going to be the host for this G20 summit, but also because of his personal talent as a diplomat He's of course been in Washington during some pretty choppy days. These have not been the easiest times To be the Russian ambassador in Washington but he's handled it with skill and with enormous Strategic insight and we're very fortunate that someone like him is here now We this is not the best of days in our relations with each other But it's made dramatically better because of his presence and his ability. So would you with your applause? Please welcome the honorable Sergey Kizlyak. Thank you Thank you, June and thank you for that kind of presentation, but I always feel a little bit oversold and that certainly it raises my abs and I was invited to make a welcoming Addressed now. I'm a graded to keynote speaker and I thank you for that However, I was thinking how different my speech would be and what's the difference between welcoming and keynote and in my view both are something that have to help you to understand what is Russian view on the Organization that we are discussing in several points one This is one of the youngest Multilateral mechanisms that is addressing the problems that are Unifying castle and most probably it's one of the institutions where Russia and the United States however being on Different positions on many other issues work very much together So being in the same economic crisis Both United States us and the other countries Brought us together into mechanism that may be short of being a directorate or normative setting has formed a mechanism where people can Discuss and reconcile national strategies in the multilateral world with very intertwined economies and As such G20 as far as I understand has proved to be rather efficient I'm not suggesting that it was able to resolve all the issues of the crisis But being upgraded wasn't created until the 2008 it did existed prior to that in somewhat more working-level formats But in 2008 there was a decision made in order to have it on the level of the leaders and That creates a kind of normative character to the whole kind of Consensus that can be achieved with these Mechanisms Russia being a country that has integrated in world economy also cry recently only 2022 years that we Integrated part of the rush of the world market that means for us That we have high stakes in the vitality and the health of economic Relations in the world We are interested in seeing to it that the international trade conditions would be favorable For us as well We certainly also depend on the markets outside Russia for well-being of Russia being an important exporter of things and For us being a in the chair of this organization It's a pretty unique opportunity and not only to help together with the others to form a consensus on the current issues but also to be able to Contribute to the solutions looking through the optics of our own problems and our own goals the two main subjects that we have proposed for the G-27 and this year is sustained growth and Creating jobs. They are not necessarily new to the agenda of the G20 But the focus on this issues is very important because Specialists are focusing on how best to achieve that kind of strategy certainly the national Solutions and the national strategist will be decided by each and every country But the way to reconcile it is to talk about these issues in the 20 and I think currently you do not find another body that would be as Usable for that kind of stuff as G20 taking into account the Composition of the countries that are involved. I would also like to say that Russia currently Enjoyes pretty Solid economic situation in relative terms though I with the average growth rate in the world is about what three three point two percent Russia enjoys three point four. Is it enough for us? No, of course not We wanted much higher growth rate We added before the crisis and we hope to be able to restore it in the future, but At the same time is still solid and we hope it will be an increase within years to come We are also fighting to increase our job base We have an ambitious plans within years to come to create additional 25 million Jobs that means restructuring all jobs and creating absolutely new all of this requires a lot a lot of investments So the creation of an environment for the investment is also one of our national priorities currently the climate for investment according to international ratings isn't among the top 20 I would say but I wish we have a chance to get in the same kind of format in five years I bet we will be in the 20. We are working hard on creating conditions in Russia that would be considered by other outside investors As good as in 20 best countries in the world But even today, I think our investment client is very much underrated and we are doing much better than some admit At the same time also when it comes to Russian economy We Have enjoyed pretty stable fiscal environment. We have accumulated significant reserves We have two funds one sovereign fund which is all about 40 84 billion dollars and another reserve fund that is another 80 plus billion dollars and the national reserves are 500 plus billion dollars as well We are almost dead free a country because our external trade that is No more than 2.5 percent and including internal That is around 1011 percent if you compare it with the ever say in the g8 countries and With the country that hosts us today I think we are doing in relative terms significantly better and we have rather Solid view on how to move first further so For us G20 is a very important mechanism is whereby we Will try to harmonize national policies with the others in a way that would be advancing our national goals and also being part of the international Community working on overcoming the remnants of the crisis because we stand to benefit from the healthy International economic environment as any other G20 country and many others so currently the chairmanship In this organization brings a lot of Additional work for Russia, but we like it because it gives also us an opportunity to invite the best specialist on all the economic issues of the current situation financial Job creation specialists in in a week plus minus We are going to have pretty unique a forum that will bring together Ministers of finance and ministers of labor of the G20 that is pretty unique a forum as far as we Understand that would give them a chance to discuss what can be done to address the priorities that we have so G20 I was going to be a significant event in the economic Discussions in its own right. It will be an important event for us because Our involvement in preparing it and I hope it's going to be another Confirmation that there are issues in the world where we all stand to benefit more by working together rather than working against each other and Economics today is one of these areas. Thank you So I am just delighted to introduce the first of two former bosses participating in today's program Caroline Atkinson is the deputy national security advisor for international economics at the White House She is an old colleague and friend of mine and boss twice and She has actually been at the White House for a couple of years working on a range of international economic issues All the important ones including the G20 Which she has now inherited as the as the Sherpa for the United States. That is the president's premier advisor on this important summit She has a very long and distinguished career in international finance at the Bank of England that the Washington Post that at the times of London And of course at the US Treasury Department where we worked together a number of years ago And importantly her biography says that she was born in Washington DC like me. That's also true We have parents of British Origin and but unlike me her parents were wise enough to To spend enough time in the UK that she picked up that wonderful accent and I unfortunately did not But you'll you'll see in a second. So with that Caroline, please join us. Thanks Thanks very much Matt. Yes, it does require a little bit of explanation when I show up as president Obama's Sherpa and in fact at the G8 David Cameron said I've been wondering who's side you're you know, you're really on or Anyway, it's a pleasure to be here this morning and I wanted just I was explaining to Russian colleague that I was just meeting with with my Russian Sherpa counterpart So we he said well, that's why she's not here and I said and that's what she's why I'm late So I think that goes to part of what is so valuable about the G20 I should declare an interest because When Matt and I were working together at the Treasury Department It was the birth of what became the G20 with the Asian crisis in the late 90s It was clear that there wasn't really a right grouping of countries to discuss the important issues that that crisis revealed and The traditional G7 in those days Was too heavily dominated or just consisted of the advanced and big industrialized countries but the crisis was going on in a part of the world that was really underrepresented in those groupings and I think it was Singapore then Singapore leader Lee Kuan Yew who Suggested to President Clinton that there should be some meeting of officials and senior officials and ministers to discuss these important issues in a more global context and President Clinton charged Bob Rubin and Larry Summers who subsequently then charged me with putting together what was then the G22 I think the first meeting took place in the Willard Hotel, and it was called the Willard Group and In those days it was extremely difficult to figure out as we were developing which countries obviously Indonesia obviously Russia a Brazil Turkey it was we didn't have counterparts that we clearly and usually were in contact with we the United States and So we began to build up this network and of course that it subsequently evolved into a quite Established process of finance ministers and central bank governors meeting on a regular basis became the briefly was the G33 And then was the G20 and then that I felt Very pleased when The G20 kind of came into itself Came into its own in 2008 9 with the global financial crisis, which of course We'd all thought with the Asian financial crisis that that was the worst thing that could happen But we discovered that it could be worse and with the whole globe starting in the US And we realized that the G20 brought together The countries that needed to be at the table when you had a global economic problem that required Cooperative and coordinated action and Meeting at the leader's level really helped to promote the breakthroughs in London 2009 that was so important for Helping to pull the global economy back from the from the brink of The worst it was the worst recession since the Second World War, but it could have been the worst depression so at that Stage I think the G20 kind of proved itself in those early days It proved itself as a way that you could get leaders focused to drive other Economic institutions to take the kind of action that was that was needed in a and to understand the spillovers from one country to another since then of course things have changed a lot and the G20 has a new and not less acute but Complex challenge now, I think which is how to deal with more chronic Issues of a need for coordination my personal view and the view of My government and my president is that the G20 remains extremely important It is it was sort of dubbed to the premier Economic forum after 2008 2009 for global economic Coordination and debate and I think it remains that but the problems that we now face are not the acute ones of financial crisis. They're more chronic ones of Still too slow recovery from the crisis still too high unemployment in many countries including here and We still face the issues of how we can all work together So that our economic policies are supportive within the framework of you know sustained balanced and strong growth in a way that That we can understand each other Now in the past couple of years as many of you will know and Matt certainly knows these summits have tended to be Dominated by an acute crisis again, not the global crisis, but the European crisis and in can Which was my first? G20 summit in in this current role working from the White House completely dominated by what was happening with the Greaser just called a referendum and and and so on in Los Cabos It was another very interesting moment for the G20 because although some of the emerging markets sometimes feel well We don't get to discuss What the big countries do and and and we want to have a voice in their policies because they affect us? I think that really happened in Mexico and if you go back and look at the leader's statement You will see that the Europeans who at that stage in the sort of cross cross hairs if you like with the crisis Really put on the table some important Steps that they planned to take and of course after the June Los Cabos summit there were important steps taken in Europe that really lowered the temperature and and helped to provide financial healing as we look at the agenda this year and We have the IMF and I know David Lipton my former colleague will be coming later We have the IMF telling us all that the global outlook in their latest Releases is worse than they expected and that we expected excuse me and just recently and I think that we in the US are Finding that the recovery is perhaps a little stronger than was expected and the and there is healing going on But we still recognize we have work to do if we look at the rest of the world almost everywhere other than Japan interestingly enough the outlook is more disappointing and with Not maybe the big downside risks, but still with a lot of concerns than had been expected just a few weeks ago so we think that a Focus that leaders will want again to focus on how we can Really get this recovery on a steady and strong path That is the big challenge for us for us all in all of our countries And I think that what's been happening in emerging markets just recently. Well, thanks so much We'll also yeah We'll also put an extra Interest from the whole group on these basic macro questions last year as Europe and wasn't clear how quickly we were getting out of our recovery unemployment had not yet decisively turned down and And Europe obviously was was still struggling with a lot of difficult issues The emerging markets looked as if they could decouple and I think we've seen more recently that as that That a lot of emerging markets remain concerned and it's important for the big and on not not so industrialized countries to have that discussion with Around a table that includes all of the major economies 80% of GDP About how the different policies that we all carry out affect each other and that's not always an easy way An easy conversation to have but it is a critical one because it helps us to understand better How things seem from other parts of the world and that's true from everybody else's point of view So there are other issues that over the years have been added to the agenda and I was just having a debate yesterday With one of my other Sherpa colleagues who was saying really the whole we should Do a kind of back-to-basics and only worry about the global economy? Debate, but I don't really agree with that because I think that part of the power of the G20 also is that These countries if we make policy commitments they can have an important role in setting a global agenda and in effecting the global economy in a larger sense not just the fiscal and current account deficits, but other important areas and one of the important steps that the G20 has taken in recent years, which might seem Not central to a global macro debate, but it is of enormous importance in the world was To agree not to put on export bans for food products at times of shortage And that has been a really important that helped a lot of countries to To explain to their domestic audiences why they would not In times of shortage think of resorting to an export food brand And we know from work that the IMF and others has done that these export bans actually worsened The global food crisis is just an example of how in a global world What any country does can really have a quick and immediate impact and that's led to a quite important development of More transparency in agricultural pricing. There is a group that meets that talks about that and promotes That which helps markets to work better another key area is Trade now we're always saying and I and most of the G20, you know It's our position that trade that G20 is not a place to be doing trade negotiations In fact in a way the Sherpas are the the sort of masters of all and and and of none We don't really know in great detail about anything But we try to represent our leaders on a whole bunch of topics. So on trade for example What we can do is give a political push two years ago and can it was quite important that After years and years of repeating that we were going to complete the Doha round very quickly Leaders agreed that it was time to look at fresh and credible approaches in order to Revive the multilateral trading round and they also earlier had agreed to a standstill on On protectionist measures. There was a piece in the newspaper I think yesterday by Arvind Subramanian about how protection was the dog that didn't didn't bark and I think I don't want to claim everything for the G20 But the fact that leaders were there they were able to come to agreement that they would Resist the temptation to put on protectionist measures despite the enormous challenges faced in their economies was one important element in helping to preserve the open trading system and this year Of course, there's been a lot of focus especially in the us and especially on the on the trade priorities of the us and my predecessor Mike from and With both the Trans Pacific partnership and more recently the launch of the transatlantic trade and investment partnership or t-tip And there's some question of what where is the world trading system going? I think the G20 can send also an important signal that we care about the wto and the maintenance and and revitalization if you like of the wto and the multilateral trading Trading round And we're very hopeful that in barley when the wto meets later this year It will be possible to reach an agreement around a package that is of genuine value To all of the nations around trade facilitation Maybe goes a little further than that But is a step forward rather than a repeat of of discussions that had not been getting anywhere much And that the trade area and climate is another very important area and energy security. These are all Areas where traditionally there had been a sort of view that emerging and that advanced economies were kind of on one side And then emerging economies and developing countries were on a different should be treated differently. And I think as we Have worked around the G20 table and bilaterally and in other groups. It's clearer and clearer that The emerging the major economies need to talk about these issues on a sort of Not that everybody's the same but on a basis where we recognize that we all have Obligations and this came up. You will have seen probably in today's newspaper in our discussions this week with China There was a recognition that we need to have a joint climate Plan in trade and climate and other things what the major economies do in the emerging world is Important for the international system just as what the big industrialized economies do So another Couple of issues that I think have been very important in that the G20 has championed them In the energy field in 2009 we called for a phasing out of fossil fuel subsidies wasteful fossil fuel subsidies And everybody could sign up to that but then the next question was well, okay What is a subsidy and what is a wasteful one and and a lot of debate about that this year under russian leadership We've moving more taking steps towards Looking at a peer review may be involving some of the international institutions so that There's more transparency and understanding about About the the need to act on fossil fuel subsidies The IMF did this great work in the spring showing, you know, there's half a trillion dollars a year spent holding down the prices Of fossil fuels, which if you think that with the other part of our brains in some countries People are looking at ways to price carbon and to raise the price of carbon At least you want to start off with not Subsidizing it, but of course that's a very difficult political issue in many countries But it's one that we think we need to work on more and more Especially as the costs of these subsidies has become really really crippling for some countries on their on their fiscal policies um There are other issues Taxes where the g8 looked at tax policy internationally But really the g20 needs to be involved in in that debate and we look forward to That being one of the issues that comes up In in russia as well Corruption, which a lot of people, you know, 10 years ago might have said it's not that's not really an economic issue We know it is an economic issue and it may not be may not be such an economic issue in Work and business and so on in what was the g7 But it certainly is an issue as we think about cross-border investment and how to help promote development And that's the development be my last point In the old days the g7 and then the g8 would talk about development very much And they would invite some leaders from the poorest regions in the world from africa and it would be very much And you may remember the demonstration it would be very much a move from NGOs and and also from the country the the african or poorer countries themselves to say to the richer ones Well, you're rich. What are you going to do to help us? Where's your aid? Where's your debt forgiveness and so on and then the rich countries would be trying to push each other to Do a bit more and be offering stuff that debate has really changed in the g8 Where last year and this year under the us and the uk presidency There's been a broader group of developing countries brought together and a very different debate where it's much more about What can we do together as partners? What can developing countries themselves the poorest ones do to attract the kind of private capital that they need We all recognize the game is not in aid the game is in the real game is in both trade and also Private capital and domestic resource mobilization And in the g20, I think it helped to push that a recognition into the g8 and also to show that It's no longer what is the g7 giving to africa We all we know that china's investment in sub-saharan africa is very important We know that brazil has technologies that can help food production in tropical areas if they share those So there is much more of a kind of common interest in how this kind of sharing and Mutual support can help to advance goals as different as Both the development goals, but also the original global economy ones and financial regulation and so on And also through the whole gamut of Areas that touch on how successful our international global and financial system can be for everybody Thank you Thank you so much caroline, just a breathtaking presentation of the scope of the g20's work and her responsibilities which are Vast and it's hard to see how one human being can cover all that ground. We're going to talk more sorry with help That's true. You do have help you have yaks having been a yak myself. We're very proud of what we do for sherpas So caroline has time for I think a few questions So if if you do have a question, please wait for the microphone, which I think are floating and please identify yourself And please make the question short. Thanks Sure. Yeah, sure. That's fine Take a first stab Down there. I see And if you can say who you are that As you ask your question Sure, my name is anna yukinana of i'm a reporter with Reuters and I was wondering if you could speak a bit about some of the issues that are likely to come up at the most the Next g20 meetings and especially fed policy Uh, what how you will respond to some of the concerns emerging markets have raised about spillover effects and other issues like that. Thank you Well, I'm not going to get into fed policy. It's a simple rule for those of us in the white house I will just say that I think what's important and what we see is important is And I think this is true for every country in the g20 that we need to um Bear in mind the importance of strengthening our own economies And then we need to strengthen our own economies in a way that supports the global economy That's certainly the sort of focus of us policy. We want to make uh We want to and we took very dramatic steps early on in the crisis on our banking system monetary policy and and fiscal policy to halt the decline and promote recovery And of course what every country does affects every other country and that's something that the g20 provides a good forum for discussion Uh, and the most the sort of guiding light if you like of the g20 is that countries should be mindful Of uh, well countries should talk about What it is that they can do to reinforce a strong global economy Robert Rogowski, um, georgetown Could I know that trades something you only tangentially talk on in the g20, but Could you go a little bit further about what you're Seeing ahead for the next couple of years in terms of supporting the multilateral negotiation and in addition to all of the the the Many many fta's But there must be a strong trade agenda Coming up. Could you talk a little bit about what what we'll see and particularly support for the multilateral? Yeah, as I said, we think that the multilateral Agenda is very important and that's why we have been putting an enormous amount of energy into having a successful Agreement or successful Negotiations in barley Which will come after this g this year's g20 So what I would hope is that the g20 is able to provide some political support For such an agreement centered around the core of trade facilitation where there's been some quite interesting work done In janeva and also a lot of work. I think it's the ocd has calculated how um measures on trade facilitation can help importantly all kinds of countries and possibly the support in for for Trade and gdp is even greater in developing countries where there may be more Barriers for moving goods to market in in a in a smooth and efficient way So we think that that's an important element of the of the multilateral trade negotiations Yeah I was one here achingum there's been a new focus on economic relations in us russian relations and the establishment of the commission between dmitry medvedev and Joe biden And the ambassador kiss that just said some very important things about the Russian interest in the global economy and you've just met you said you came from meeting with ksenya yudaiva the G23 but sure, but can you tell me if there's anything particularly russian about this agenda like in the past you've had countries that have really had a Mark on it. Is there anything you see as Important in terms of our own understanding of russia or of the way the g20 should be shaped from a russian point of view Yeah, the ambassador spoke to that and I know that kissenya is coming later So I would prefer to let them define what they see as as the sort of hallmarks of Of this from a russian perspective All I would say is that of course every chair has a particular mark But at the same time every chair is responsive Both to immediate Events So if you look at the los carlos Summit that was statement that was in mexico. There was actually a fair amount of detail about as I mentioned about european economic policy as well as a number of other issues and then Part of the part of the point of the g20 is also that it is a global agenda. So there is a balance always between The recognition of the global issues and the common issues and then the particular Areas where where the chair pushes, but I think it it's it's up should be up to the chair to describe those Thanks For you. Thank you very much for your remarks with the upcoming Oh, I'm sorry. Karen troventano blue star strategies with the upcoming g20 labor minister finance minister meeting do you see any room for a discussion of Getting beyond fiscal policy and monetary policy to labor market policy and more inclusive growth and job development Since there is a huge job deficit Thank you. Well, I think that increasingly we we have been Putting the issue of jobs and growth growth and jobs growth and jobs creation on the agenda of And in fact russia this year made very clear that that was one of the sort of key areas of focus for this year's summit and I think that has only become More evident as the year has gone on and And we fully support that I also believe that the coincidence of the labor and finance ministers You know, they're having one day overlapping. I believe And we'll have some outcome from that is particularly Apecite this year. It's a very good year for that discussion to occur And I expect that I am hopeful that there can be some progress in understanding we we also believe that One should be talking about a growth strategy and not just a You know a separate fiscal strategy and a separate macro one that in the end if you ask what the leaders and their And their people want And of course we can characterize growth in different ways you use the word inclusive which matters as strong sustainable balanced all of this But you know, we're really all talking about the need for growth and improved living standards Thank you