By Ousmène Mandeng, Head of Public Sector Investment Advisory at Ashmore Investment Management
The G20 Toronto declaration seemingly marks the beginning of the end for the macroeconomic policies launched with the Washington summit of Nov 2008, with Toronto focusing on fiscal consolidation rather than preventing economic collapse.
The G20 summit raised parallels with the G5 Plaza accord of Sept 1985 in terms of the need to address issues of potential fiscal imbalances among industrial countries and the need to implement changes to exchange rate policies.
Looking forward, the G20 will have to transition from predominantly G5/7 concerns and move towards a broader focus on issues relevant to the emerging market member countries as well.
Absence of serious debate about exchange issues at G20 most likely attributed to continuous sharp divisions among G20 membership.
Developments that would have allowed having currency issues feature more prominently include the change in the Chinese renminbi exchange rate regime and French president Nicolas Sarkozy's call for reforming the international monetary system.
France's intent to put exchange rate issues at the core of its G20 presidency is the clearest sign yet that G20 is looking to become as relevant for the entire G20 than for the G5/7. Mexico's G20 presidency in 2012 may well mark the coming of age of emerging markets.
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