Argentina's membership of the G20 called into question

June 20, 2012 10:26 AM

Our friends at the National Taxpayers Union in the US have this week published a paper considering the legitimacy of the current membership of the G20, which is of course meeting in Mexico at the moment.

The authors, Alex M. Brill and James K. Glassman, assert that the G20 currently "lacks the necessary will and authority to deal with the immense problems at hand" and that it needs to introduce new membership criteria in order to regain a sense of legitimacy. They set three appropriate membership criteria as follows:


  • A country’s economic size and global economic importance,

  • A country’s adherence to rule of law and other principles consistent with market-based economies, and

  • The size of a country’s financial-services sector and the magnitude of inbound and outbound cross-border banking activity (financial interconnectedness).



They propose, on the basis of these critieria, that Indonesia, Russia, Mexico and Argentina should be booted out of the G20 (and replaced with Malaysia, Norway, Singapore, and Switzerland).

The appearance of Argentina there is particularly interesting, and here's a flavour of why the authors say it is "clearly... ill-suited" for G20 membership:
"Given Argentina’s record over the last decade, it is unsurprising that the country would fail to qualify for the G20 based on the proposed criteria. In the largest sovereign default in history, Argentina renounced its debt in 2001, just two years after acceding to the G20. Displeasure over Argentina’s actions has increased notably in recent months. In March, President Obama denied Argentina trade preferences because the Argentine government refused to pay a settlement to two U.S. investors awarded by the World Bank’s International Centre for the Settlement of Investment Disputes."

This comes in the wake of the StopFundingArgentina.org campaign we recently launched, calling on the British Government to use its votes at the World Bank to oppose any further loans to Argentina. As we have noted, the Obama Administration in the United States currently has a policy of voting against any new loans, in response to Argentina’s treatment of existing creditors, so we believe British representatives should also be instructed to support that policy.

If you haven't done so already, click here to sign the click here to sign the StopFundingArgentina.org e-petition.Our friends at the National Taxpayers Union in the US have this week published a paper considering the legitimacy of the current membership of the G20, which is of course meeting in Mexico at the moment.

The authors, Alex M. Brill and James K. Glassman, assert that the G20 currently "lacks the necessary will and authority to deal with the immense problems at hand" and that it needs to introduce new membership criteria in order to regain a sense of legitimacy. They set three appropriate membership criteria as follows:


  • A country’s economic size and global economic importance,

  • A country’s adherence to rule of law and other principles consistent with market-based economies, and

  • The size of a country’s financial-services sector and the magnitude of inbound and outbound cross-border banking activity (financial interconnectedness).



They propose, on the basis of these critieria, that Indonesia, Russia, Mexico and Argentina should be booted out of the G20 (and replaced with Malaysia, Norway, Singapore, and Switzerland).

The appearance of Argentina there is particularly interesting, and here's a flavour of why the authors say it is "clearly... ill-suited" for G20 membership:
"Given Argentina’s record over the last decade, it is unsurprising that the country would fail to qualify for the G20 based on the proposed criteria. In the largest sovereign default in history, Argentina renounced its debt in 2001, just two years after acceding to the G20. Displeasure over Argentina’s actions has increased notably in recent months. In March, President Obama denied Argentina trade preferences because the Argentine government refused to pay a settlement to two U.S. investors awarded by the World Bank’s International Centre for the Settlement of Investment Disputes."

This comes in the wake of the StopFundingArgentina.org campaign we recently launched, calling on the British Government to use its votes at the World Bank to oppose any further loans to Argentina. As we have noted, the Obama Administration in the United States currently has a policy of voting against any new loans, in response to Argentina’s treatment of existing creditors, so we believe British representatives should also be instructed to support that policy.

If you haven't done so already, click here to sign the click here to sign the StopFundingArgentina.org e-petition.

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