What happens when the biggest player in global economic policy circles shuts itself down?
Washington Wire has a good post about the challenges that US Trade Ambassador Mike Froman faces as he seeks to wrap up talks on the Trans-Pacific Partnership in the midst of a government shutdown. Unfortunately, the same post could be written on a number of fronts when it comes to US participation in global economic policymaking. And just as unfortunate, one of the most visible and consequential of these is soon upon us.
Next weekend hundreds of economic delegations from around the world will descend on Washington for the annual meetings of the World Bank and IMF. While we might cheer the helpful boost that “Bank-Fund” will provide to the city, it already figures into the baseline for the local economy as an annual Washington-based event, so this is a boost we were already counting on. (Not to mention that most of these delegations are not frequenting the coffee shops and carry outs that are the daily domain of federal workers).
More importantly, the various policy agendas in play next weekend pose capacity challenges for the US government and the risk of missed opportunities in moving US priorities forward. While there is little doubt about senior US officials being present at these meetings, they will participate constrained by logistical headaches and a lesser degree of critical staff level preparatory work. (See CGD colleague Beth Schwanke’s round up of what the shutdown means for the US government’s international functions).
For the US as for most country participants, Bank-Fund is a major undertaking and serves as a unique one stop shop for engaging in policy discussions and pursuing agendas. Simply put, there is no other forum in which the world’s economic policymakers gather in these numbers to address the wide array of issues affecting the global economy.
The events of next week will include the formal meetings of the two institutions themselves, high level meetings of the G20, and various regional meetings. This time around, Western Hemisphere finance ministers will meet on October 9, followed by G20 finance ministers meetings on October 10 and 11, followed by official meetings of the IMF and World Bank on the 12th. The hours between each of these multilateral sessions will be filled with bilateral sessions and informal working lunches and dinners.
In all, the events on the schedule of the US delegation can easily reach the triple digits over a five day period. Even at this pace, there are always more meeting requests than can be accommodated. As a result, none of the scheduled meetings is inconsequential, and the prep work for each is significant. Each will require a substantive briefing memo that identifies US priorities, the priorities of the other parties, and a strategy for moving forward. In any given year, such effort might be brought to bear in a meeting with Egypt’s finance minister, a sideline discussion with China’s central bank governor, or at the table with the 24 other ministers of the IMF-World Bank Development Committee.
I may be biased in the confidence I have in my former Treasury colleagues to operate effectively, even under adverse conditions. Just the same, I can’t imagine that senior Treasury officials will be able to perform as well next week without the normal level of staff support that they would have with a fully operating government. It may mean fewer meetings on the agenda, or fewer issues pursued in these meetings. Either way, the shutdown comes at a cost to the US agenda next weekend.
How do you measure the impact, economic or otherwise? It’s hard. This is after all the softer side of some of the “essential” services that the US government provides. But I can’t help but worry about the missed opportunity of a meeting with the Treasury Secretary or Under Secretary that doesn’t happen, or a request of a key counterpart that doesn’t get made. With a global economy that continues to show signs of fragility on too many fronts, these missed opportunities can be of frightening consequence in ways that are impossible to predict.
Here’s hoping for an end to the shutdown in the days ahead.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.