G20 a bitter pill
The World Development Movement's head of policy reflects on a G20 he believes has achieved a little
The last minute refusal to let us into the G20 summit probably did us a favour, if all truth be told, as suddenly one becomes far more glamorous and interesting if you are banned from something. But more importantly, we did not let it stop us from examining and critiquing the G20 communiqué in a meaningful and robust way to judge it on its merits and its flaws, in terms of what it will deliver for the world's poorest people.
We condemned the G20 outcome as a 'bitter pill' for the world's poorest people. This is not to say that we didn't recognise and welcome the commitments made to the Millennium Development Goals, a clamp down on tax havens, emergency finding for developing countries and a mention - how ever cursory - of the transition to a low carbon economy. But the promises of a new world order seemed hollow. The G20 leaders are relying on the IMF, World Bank and WTO - institutions that epitomise the principles and failed neoliberal policies of the 'Washington Consensus' - to regulate, monitor and essentially save the global economic system. This is paradoxical given Gordon Brown's assertion yesterday that the Washington Consensus is, in fact, dead.
The G20 can belatedly consign the Washington Consensus to its grave, but at the same time they have renewed their vows to free trade and the accompanying rigged rules that favour US and European multi-national companies. Of course we do not want rich countries closing their markets to developing country exports in a rush to protectionism; but developing countries must not be locked into unfair free trade deals that bring little benefit to people and reduce governments' ability to choose their own economic policies. In particular, developing countries must not be pressured into signing up to a deal at the World Trade Organisation that will not work for them.
The hardest bit of this bitter pill for the world’s poor to swallow will undoubtedly be the G20's trebling of the IMF's budget without committing to radical reform. Many people in developing countries have a deep mistrust of the IMF, which is hardly surprising given its pernicious history of lending money to developing countries with strict neoliberal economic policies attached – such as cuts in public service expenditure, privatisation, and liberalisation - which served to deepen inequality and poverty. Though the communiqué made mention of the G20’s determination to “reform and modernise” the IMF and World Bank, the substantive agreements beneath this amount to little more than a small expansion of the privileged club of countries who get to sit around the table – rather like the G20 itself.
And finally to climate change. It was never really on the agenda, as we had been told by government officials in meetings leading up to the summit. It suits the leaders to separate the economic crisis from the climate crisis and make a firm commitment to worry about climate change in Copenhagen (where, I despair, they will agree to find some future date to worry about it again). But this is a huge missed opportunity to actually deliver a green global stimulus package that would create jobs, boost the economy and help tackle climate change.
The G20 has proven itself incapable of taming the beast they helped to create. Of course, progress in tightening of regulatory oversight of banks, financial markets and tax havens is good. But the penny has yet to drop that it’s the type of economic model that they are attempting to regulate is itself the problem, when what we need is radical change. A much more democratic and participatory international process must now be launched to rewrite the rules of the global economy in favour of ordinary people and the environment, instead of the corporate elite. Because if NGOs like the World Development Movement are turned away from the G20 talking shop, what chance have the 1.5 billion people who live in extreme poverty got to get their voices heard?
Tags: G20 2009