CLEAN UP GLOBAL FINANCE AND PUT PEOPLE FIRST
This autumn the G20 is back. On Friday 4 September, the G20 Finance Ministers are
meeting in London to discuss the global financial crisis, the first G20 meeting since April’s London summit. Will they be up for the challenge?
The signs are not good. The global financial crisis has created a significant opportunity to reform global financial structures… but so far leaders of the rich world have preferred to patch up the old system that has led to poverty, inequality and the threat of climate chaos.
That’s why Jubilee Debt Campaign has joined up with other campaigning organisations for a Put People First Campaign Day on 4 September to tell the G20: No More Business As Usual.
Since the G20 were here in April two radically different summits of world leaders have taken place. While the G8 harked back to the days when a handful of rich
countries could happily control the world economy without interference, the other – the UN summit on the economic crisis – was fought for tooth and nail by developing countries desperate to have a say on the direction of a new global economic order.
On the table at the UN summit were recommendations from the UN Commission chaired by Nobel laureate Joseph Stiglitz. These included a powerful global economic co-ordination council at the UN to bring the World Bank and IMF to heel, an end to the practice of forcing economic policies on developing countries, an international debt work-out process which would allow for far greater and fairer debt cancellation and a new reserve currency to replace the dollar.
Yet while the UN summit went much further than the G20 in raising these critical issues, rich countries blocked them from being adopted. The G20 have got to do better.
At Jubilee Debt Campaign we are looking for action that demonstrates that world leaders have finally grasped the systemic nature of the economic crisis and the need for radical change to address it.
The crisis is affecting us all, but is having particularly disastrous effects on the poorest in society and the poorest countries. Earlier this year I met the Tanzanian Ambassador, who was explaining the disastrous impact of the financial crisis on the cotton industry in Tanzania. The sudden drop in demand meant a sudden fall in price; people were put out of work, with no benefit system to offer any support.
Fundamental transformation of the global financial system is needed both to stem the crisis and build an economy that works for jobs, justice and the climate. But the G20 continues to cling to many of the policies that caused the crisis in the first place.
In April, instead of finding the new money for the urgently needed stimulus package for developing world countries, the International Monetary Fund was given a huge increase in the amount it could lend - some $750 bn. Most of this won't go to the poorest countries.
Moreover, pushing it through compromised institutions like the IMF without fundamental reform could do more harm than good. It is imperative that the IMF immediately stops attaching damaging austerity conditions to its funding, and that funding for the poorest countries comes mainly in the form of grants, if we are not to see mounting debt burdens impact on countries for years ahead.
Support for developing country trade is important, but giving more money to unreformed export credit agencies is a potentially disastrous move. These agencies have financed projects that have caused social and environmental damage; gone into the hands of corrupt officials, or supported oppressive regimes. Radical reforms in the governance, policies, and practices of these agencies, including the UK's Export Credit Guarantee Department, are needed if they are going to have a bigger role.
It was encouraging that there has been a clear recognition of the problems caused by tax havens, which sap poor countries of revenue and make them more dependent on international lending, and harbour 'vulture funds' that seek to profit from indebted poor countries. However the changes proposed to tackle tax havens are not comprehensive enough, and are without clear enforcement mechanisms. Countries that sponsor tax havens, such as the UK, need to lead the way in cleaning them up.
Wider and deeper debt cancellation is needed now more than ever, to prevent poor countries being tipped back into the level of debt crisis witnessed in the 1980s. Jubilee Debt Campaign estimates that, out of 43 countries most at risk from the crisis, 38 had unpayable debts even before the crisis.
Gordon Brown has announced that "the Washington Consensus is over." But in practice the G20 has still not broken with the sort of free market policies that are responsible for this crisis - as well as years of growing inequality and instability that has deeply damaged the fight against poverty.
We have a once-in-a-generation opportunity to radically transform the global economy. So far the G20 have failed to take that opportunity, so we need to keep campaigning.
Join us in central London on Friday 4 September for a day of action on the G20, including a walking tour of the City of London. We’ll be demanding action on jobs, justice and climate, learning more about some of the key institutions behind the crisis, and discussing what’s next for Put People First campaigning.
On 24-25 September, the G20 leaders will hold a further summit in Pittsburgh, then on Saturday 8 November, to coincide with the second G20 Finance Ministers
meeting of the autumn in St Andrews, Scotland, we’re joining with Bretton Woods
Project and others to put on G20 alternative summits in London and St Andrews.
REGISTER to attend on Friday 4 September via firstname.lastname@example.org or 020 7324 4722. See www.jubileedebtcampaign.org.uk/4sept for full details.
Jubilee Debt Campaign, 21/08/2009