Small is ignored, but has the capacity to weather a financial crisis

By Pascale Palmer
November 11, 2010

The G20 nations are flying in to Seoul in South Korea today for the start of the two-day summit which will see a new development agenda discussed.

Tonight, heads of state will gather for a working dinner before meeting tomorrow around the negotiating table proper. But for many of them it will only have been days since they saw each other last, with the US courting India and Cameron skirting the human rights elephant in the room during trade tête-à-têtes with the Chinese supremo.

It's a wonder these heads of state didn't consult their diaries and realise they were going to be hanging out at the G20 together and save themselves all some fuel.

Of course one could argue that Obama and Cameron were in the area. India and China are kind of on the way to Seoul, and perhaps it would have been rude not to drop in. But this all looks alarmingly as though the nascent glimmer of global market recovery is leading the big hitters to cast off the solidarity of the Group of 20 as each country seeks to trade its way out of recession. It seems a far cry from the "we're all in this together" sentiment of the London Summit last year when the economic crisis took the stakes way above national interest.

And so we're back to the old, and some new, leading nation frictions in the form of criticism over the manipulation of the value of currencies, over the balance between trade surplus economies and those in deficit, the need for binding agreements at G20 level and the ever-present debate of who isn't represented within this global steering group.

This final issue is a whopper. The gap between those invited to the G20 table and the more-than-150 nations that get to stay at home, with only the UN, the World Bank and a few selected invited countries (not given full status) to count on as the conduit for all their voices, shows the reality that money talks in its starkest form. Money gets to set the global agenda, and in most cases, with this kind of power, money will inevitably beget money, leaving the poorest in its wake.

And yet with great noblesse oblige, the G20 are going to launch their development agenda here in Seoul. The biggest world economies, without those facing the worst of the financial crisis - which is pushing millions of their citizens further into extreme poverty - being present, will lay out the beginnings of plans to improve development prospects for the poorest.

But let's get over the exclusion issue for now because the G20 exists. It's what we have and it does offer the opportunity for great change. What the G20 has to do, at a time when it's stalled by a focus on national interests, is look again at the bigger economic picture. Its drive must not be to view the presence of trans-national corporations (TNCs) as the sole driver towards development in poor countries; it needs to shore up the sub-strata of small farmers, small and micro businesses in these countries so that economies are more resilient to global market fluctuations while at the same time reducing poverty.

CAFOD research shows that some countries where we work have maintained greater economic and employment stability over the past two years because their small and micro enterprises are strong. These layers of national economies can sway and bend rather than collapse when the TNCs slash spending or pull out altogether in times of global economic downturn. And what the G20 needs to also acknowledge, is that nations that have economic structures at the micro and small business levels offer firmer foundations for successful foreign investment and support for TNCs.

And that's what we're calling for at this G20: some big thinking and some small business action. The first draft of the development agenda, leaked to the Financial Times, looks like they might be moving in a positive direction, but the devil will be in the detail, and we won't know that until tomorrow.


(c) Pascale Palmer is CAFOD's Advocacy Media Officer.

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