G20: Thinking beyond growth
It’s the G20 in Cannes this week. You’ve got to love the French for putting the summit in one of the most glamorous towns on the Cote d’Azur, but I suppose they’re versed in security down there, what with the film festival and all. I expect it’s pretty similar logistics ensuring Angelina Jolie and Brad Pitt can move safely from uber-yacht to La Croisette to the Carlton Hotel, as it will be for the 20 wealthiest nation heads of state to shuffle to the convention centre.
And oh my goodness, there’s a lot going on for the G20 to talk about. What with the Euro being plucked from the brink of collapse during a heady all-night meeting in Brussels that sealed a deal with banks to accept a 50 per cent loss on their debts owed by Greece, and injected a whopping 1 trillion euros into Europe’s bailout fund, there certainly won’t be many awkward silences during the traditional first night G20 banquet.
And of course, one all-nighter does not a long-term solution make. The G20 has a job of work to do to use the progress made in Brussels as the starting point for wider measures that can stop the rich nations’ economies from nose-diving into recession.
This is what French Finance Minister Francois Baroin said on the topic: "The G20 needs to take precise and detailed measures for countries that are still consolidating their budgets to continue their efforts, and concrete measures for countries that can support global activity to support it." In a nutshell he was telling us that if the G20 didn’t support the 17 eurozone nations to get their financial houses in stable order, it would threaten the global economic situation, ie it would damage that Holy Grail that is global growth.
I have started to imagine the global economy as a mesh of interlinking financial dependencies - a giant cat’s cradle that spans all countries and communities, held taut by the fingers of the developed world. When these rich nations weaken and the mesh bags, those previously strong economic linkages slacken too. So as one economy fails in the eurozone, so others are pulled down. When rich trading nations in Europe start to quiver, it affects all other rich nations whose interdependencies are incestuously complex.
And of course, it affects poor people in the poorest countries. I’ve talked previously about how multi-national corporations (MNCs) often scale down or pull out of projects in developing countries when bad times hit. And financial downturn is never limited to the rich and emerging economy nations – how can it be when they are the ones with their fingers in all the developing world pies?
So, yes – power to the arm of the eurozone 17, if it works, and power to the arm of the G20 to prevent us tipping into recession, because we will bring down poor men and women in far away countries as our own economies flatline. But a G20 plan that merely finds the right catalysts to get the rich nations back on track for business as usual, is not enough. Growth is not enough.
In Zambia, although growth has gone from negative rates in the 1990s, to a peak of seven per cent in 2007, poverty reduction has stagnated with 70 per cent of the population estimated to be living below the national poverty line.
For real inclusive, sustainable growth the G20 must look to pushing for more transparency and accountability of multi-national companies; it must ensure that growth is based in activities such as informal, small and rural enterprises and that there is support for these livelihoods so that poor people’s incomes can go up so they can afford sufficient food. The G20 must also work to increase people’s access to infrastructure, such as electricity and sanitation which are essential for both development and economic activity.
It will be a noisy time in Cannes but CAFOD will make sure we get a word in edgeways, and these are just some of the issues we’ll be standing up for at this year’s G20.
© Pascale Palmer is Senior Policy Media Officer at CAFOD (www.cafod.org.uk).
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