Washington, U.S.A. – The Group of 20, the powerful international organization whose heads of state will meet next week in Mexico to discuss the global economy, needs to change its membership criteria in order to establish a legitimacy that is fast depleting at a critical time. That is the conclusion of a new study published by the 362,000-member National Taxpayers Union (NTU). The study suggests replacing four current members of the G20 based on proposed membership criteria.

“With the anemic economic recovery weakening, global leaders should quickly consider how to fulfill the G20′s potential for building economic stability,” write the study’s authors, Alex M. Brill and James K. Glassman. “The place to start is by establishing criteria for membership and adjusting the group’s composition accordingly.”

The authors develop a system that uses key numerical indicators measuring nations’ size, governance, and financial interconnectedness to establish country-by-country rankings for current and potential G20 members. Their goal is to create a practical methodology for membership standards that would give the G20 the legitimacy and trust it needs to fulfill its stated objectives: restoring global growth, strengthening the international financial system, and reforming international financial institutions.

Findings of the study include results that show two current G20 countries—Argentina and Indonesia— are falling far short of the proposed membership criteria and should be removed from the body. Two other current G20 countries—Russia and Mexico—fail to qualify by a very small margin. Four current nonmembers—Malaysia, Norway, Singapore, and Switzerland—should replace these countries.

The study also found membership should be reevaluated periodically—a minimum of every five years and a maximum of every ten years. Such a system would lend further legitimacy to the G20 as well as provide “an incentive for countries on the cusp of gaining membership to implement reforms or strengthen their economies’ growth prospects.”

The authors stress that for the G20 to avoid the “political and operational baggage” of other organizations like the United Nations and the International Monetary Fund, solid membership criteria “can lend credibility to the G20 without affecting the manner in which it conducts its policymaking.”

NTU Executive Vice President Pete Sepp notes that by following Brill’s and Glassman’s recommendations, “[T]he G20 could take a first step to becoming a new model of economic policymaking that depends not on costly bailouts but more on proactive self-discipline in the common interest; such a model rewards free-market solutions from innovators instead of statist behavior from bad actors.”

Alex M. Brill is a research fellow at the American Enterprise Institute and former chief economist and policy director to the House Ways and Means Committee.

Ambassador James K. Glassman is the Executive Director of the George W. Bush Institute and a member of the newly established Investor Advisory Committee of the Securities and Exchange Commission. He is a former U.S. Under Secretary of State for Public Diplomacy and Public Affairs.

NTU is a nonprofit, nonpartisan organization founded in 1969 to work for limited government and economic prosperity in the U.S. and around the world. The group has long advocated for more accountable multilateral policymaking bodies that focus on practical, nimble responses to economic growth challenges instead of costly, bureaucratic interventions.

Image Courtesy of  G20

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Washington, U.S.A. – Argentina’s sagging international reputation has drawn scrutiny from U.S. lawmakers. The American Task Force Argentina reported that on the eve of the G20 Summit in Los Cabos, Mexico, members of Congress have taken the first steps to call for the removal of Argentina from the G20 if it continues to ignore U.S. court judgments and its international economic obligations. A new resolution introduced by U.S. Rep. Chris Smith (R-NJ), expresses the sense of the Congress that the Republic of Argentina’s membership in the G20 should be conditioned on its “adherence to international norms of economic relations and commitment to the rule of law.”

H.Res.686 stipulates that the Republic of Argentina must “fulfill the responsibilities inherent with membership in the Group of Twenty Finance Ministers and Central Bank Governors (G20), in accordance with the principles articulated by this premier forum for international economic cooperation.” In the event that Argentina fails to comply, the Resolution establishes that President Obama and the Treasury Secretary would work with G20 members to “terminate the participation of Argentina in the G20.”

This resolution is the counterpart to Senate Resolution, S.Res.457, introduced by U.S. Sen. Richard Lugar (R-IN) on May 14, which also supports Argentina’s suspension from the G20, unless it meets its obligations to the U.S. and other countries.

Calls to sanction Argentina have been echoed globally, from Spain and Germany to the United Kingdom. Last week, a UK petition urging British taxpayers to stop supporting multilateral development bank loans to Argentina went viral. In the United States, a House Financial Services subcommittee held a hearing that showcased Argentina as a nation that does not respect U.S. or international law.

“Rep. Smith is to be commended for his resolution. His initiative is part of a growing international outcry against Argentina’s bad acts,” explained Robert Raben, co-chair of American Task Force Argentina.  “Argentina has repeatedly refused to adhere to the spirit and the letter of G20 declarations, and at a time of financial instability, this lawlessness should no longer be tolerated.”

ATFA an alliance of diverse organizations advocating a fair and final resolution to Argentina’s financial and legal obligations to U.S. citizens is led by Executive Director Robert Raben, a former Assistant Attorney General at the U.S. Department of Justice, and co-chaired by The Honorable Robert J. Shapiro, former Under Secretary of Commerce for Economic Affairs in the Clinton Administration, and Ambassador Nancy Soderberg, Ambassador at the U.S. Mission to the United Nations in New York from 1997 to 2001.

Image Courtesy of  Casa Rosada

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