Argentina takes over the G-20 presidency

G20 Argentina

Today, and for the next 365 days, Argentina will hold the rotating presidency of the Group of 20, having taken over the reins from the 2017 pro tempore chair, Germany.

The G-20 is the pre-eminent forum for world leaders to collectively debate and address the most pressing global challenges. The scope of its agenda has broadened to include economic and financial work streams that lend themselves to coordinated global action, such as sustainable development, agriculture, trade, energy, climate change, gender equality, migration, transnational terrorism, pandemics, and anti-corruption, as well as the core issues of macroeconomic coordination and financial stability.

The G-20 is a logistics challenge. Argentina expects to convene close to 20,000 government representatives for over 60 meetings in 10 different provinces throughout the year, culminating in the Leaders’ Summit to be held in Buenos Aires during the last days of November. Today, in scenic Bariloche, Argentine Treasury Minister Nicolás Dujovne and Central Bank President Federico Sturzenegger are greeting G-20 finance and central bank deputies for the first of these meetings.

The G-20 presidency offers an unprecedented opportunity for Argentina to be front and center on the international stage as an equal among peers, after over a decade of isolation during which the country shunned multilateralism and integration under the banner of sovereignty and anti-imperialism. President Mauricio Macri will relish the chance to showcase Argentina’s newfound “democratic and multilateral identity,” as he termed it, and has taken bold steps to do so. In addition to leading the G-20, Argentina will chair the World Trade Organization’s 11th Ministerial Conference this December 10-13 in Buenos Aires, the first ever South American country to host the biennial event. Macri is also vying for accession to the Organization for Economic Cooperation and Development, marking Argentina’s definitive embrace of the global governance system.

As host and president, Argentina has the privilege and responsibility of setting not only the G-20 agenda but also the tone for the year. During a launch ceremony on November 30 that gathered Argentine provincial governors, ministers, Supreme Court judges, and lawmakers, as well as ambassadors from G-20 member countries, representatives from international organizations and civil society, and business leaders, among others, President Macri outlined his vision for Argentina’s yearlong presidency as one that will focus on inclusive growth. Despite Macri’s image as a staunch neoliberal, his G-20 presidency’s official slogan, “Building consensus for equitable and sustainable development,” reflects deep concerns about both capitalism’s excesses and globalization’s discontents. Hardly a neoliberal sentiment.

Argentina’s just-announced priorities are the future of work, infrastructure for development, and food security. Macri has made a point to emphasize that this agenda speaks not only to Argentine priorities but also to wider Latin American concerns.

On the future of work, the main challenge will be to adapt education systems, labor markets, social safety nets, and public finances to technology-induced structural changes in the nature of employment. Technology is changing productive processes at an extraordinary speed, creating huge risks and opportunities. The G-20 must find ways to ensure that individuals are well prepared for work and life in the 21st century, and that transitions are as painless and inclusive as possible.

Yet in order for new technologies to raise productivity and growth, countries need to provide people with physical and digital access to emerging opportunities. With few exceptions—notably Chile and Colombia—on average, Latin American countries invest only half of what they should in infrastructure, despite evident needs and opportunities. In fact, the whole world—industrialized nations inclusive—is riddled with wide infrastructure gaps that hamper prospects of sustainable development, at a time when global liquidity is unprecedentedly cheap and abundant. The G-20 has for several years been discussing how the global community can unlock private finance for infrastructure investment. Argentina will continue this by looking to the development of infrastructure as a new asset class to channel today’s savings into tomorrow’s transportation networks, energy grids, sanitation systems, and digital connectivity infrastructure.

As major food exporters, Argentina and other Latin American countries are deeply concerned with global food security. Hunger has been a powerful driver of politics in Latin America, and Argentina’s G-20 presidency offers a chance to address these issues directly. Food production and distribution systems both need to adjust. Better farming practices—sustainable agriculture intensification—can conserve soil and boost productivity, including for smallholders. New metrics, along with partnerships with multinational consumer goods companies, can cut food loss and waste.

Aside from being at the forefront of international debates, these themes also resonate with Macri’s domestic agenda, which places a heavy focus on job creation, infrastructure development, and climate adaptation. The G-20 presidency handover is taking place in the wake of major tax and pension reform wins in the legislature and amid heated debate on the government’s proposed labor reform bill, in what amounts to the most transformative economic makeover in Argentina’s recent history. These reforms aim to prepare Argentina for the new world of work. In addition, the government is undertaking an ambitious infrastructure development plan that relies heavily on public-private partnerships using innovative blended-finance mechanisms. Although strong pushback from entrenched interest groups is to be expected, Macri’s resounding victory in October’s midterm elections earned him a broad popular mandate for reform.

Yet mandate or not, the 2018 G-20 summit will surely see protests and demonstrations at a scale comparable, if not worse, to that experienced at Hamburg earlier this year. Argentina’s rich history of anti-globalization backlash—most recently expressed in the aftermath of the 2001 economic crisis that led to a sharp increase in unemployment, poverty and inequality—all but guarantees that Buenos Aires will be the stage for violent clashes between police and well-organized protesters. If it is to preserve both its international standing as well as the integrity of the G-20, the Argentine government must find a way to tread carefully the fine line between containment and repression. The whole world will be watching.

As was the case during the German G-20, the single-biggest source of uncertainty for the Argentine year is the United States. Argentina’s priorities resonate with issues facing the U.S., creating the potential for common ground. Yet on several other areas, most notably trade, climate change, and the governance of global institutions, the position of the Trump administration diverges from the rest of the group’s. President Macri will have to prove as skillful as German Chancellor Angela Merkel in developing language that satisfies all parties. Argentina is fortunate in that the global economy seems to be gathering steam across all regions. At times like this, the G-20 can appear to be less important—there are no fires to extinguish. Yet these are also times when countries can afford to reflect on how to address major structural issues. Argentina has made an encouraging start by identifying three important priorities.

If Argentina can lead the G-20 to provide a good steer on these issues, it will leave a strong legacy of bolstering sustainable and inclusive global growth.