CAFOD 'disappointed' by G20 development prospectus

By staff writers
September 9, 2013

The G20 'Outlook for Development' paper is "disappointing", says Catholic development agency CAFOD.

But the aid NGO, an official arm of the conference of Catholic bishops in England and Wales, still insists that the G20 can make important contributions to progress for the poorest countries in the world.

Released at the end of last week at the St Petersburg Summit, the 'Outlook for Development' document provides an assessment at the end of the G20's first action plan on development and looks to the future of its development agenda, but critical lessons have not been learned.

CAFOD's lead economic analyst Christina Chang commented: "This response is disappointing. There is still a lot the G20 can contribute to the poorest countries – they have rightly identified there are real obstacles to economic progress, such as poor infrastructure, unfair tax rules and a lack of skills that the G20 is in a position to help to address.

"The G20 still hasn’t addressed the major gap in rural infrastructure in poor countries. Farmers that our partners work with in sub-Saharan Africa tell us about hours travelled on dirt-track roads to get – by then damaged – goods to market. With most rural areas still without access to electricity, it’s not difficult to see how inclusive economic growth that the G20 says that it wants to see, has not happened. But the infrastructure focus of the G20 is still dominated by the G20’s enthusiasm for public-private partnerships as the solution, despite the evidence that these benefits have not always materialised, even in OECD countries.

"There is a lot of talk in the G20’s Outlook about inclusive growth. We welcome this, but they haven’t given themselves the right tools to do the job.

“They need to bring small businesses to the core of their agenda – they provide up to 90 per cent of jobs in developing countries and represent the most promising route out of poverty for most poor men and women. They need to measure their success not only against securing increases in GDP in low income countries, but also in ensuring that this growth translates into poverty reduction.

"Finally, they need to do more to talk to civil society and developing country governments – something that is acknowledged in their Outlook, but this dialogue is still in its infancy even five years after the economic crisis began. Russia is the first G20 Presidency to host an official 'Civil 20' to bring on board the perspectives of civil society," she said.

CAFOD says it believes the G20 can build on existing progress to improve its development contribution: it has begun important work on tackling tax evasion, addressing financial inclusion and food security; this needs to continue.

The Group's recognition of the importance of social protection is vital. "CAFOD's experience is that this is essential for poor entrepreneurs to manage risk so that can invest in their businesses and inject much-needed cash into local markets. But the G20 still needs to do more to help poor country governments to fund start-up costs of such systems," the NGO says.

In a news release, it continued: "The G20 has also recognised the importance of ensuring that its own development action plan is fit-for-purpose to contribute to a new global agreement on development for 2015, when the Millennium Development Goals expire, and committed itself to be flexible enough to respond to that agenda. But again, more could be done. Most international institutions have adopted the principle of 'development coherence' - ensuring that their activities, even those not explicitly directed at development, have a positive impact on poverty eradication. The G20 needs to do the same. Whether currency rates are stable and fair, whether government debts can be more fairly resolved and whether financial regulation works well really do matter for even the poorest traders and business owners in poor countries."

CAFOD argues that G20 needs to:

- improve the focus on micro and small enterprises as drivers of jobs, growth and poverty eradication;
- set as its target inclusive growth that reduces poverty and tackles inequality, not rises in GDP;
- commit to fund start-up costs for social protection systems in poor countries;
- commit to systematically consult with civil society and developing country governments; an
- adopt the well-established principle of 'development coherence' and mandate the development working group to ensure that this principle applies to the entire G20 agenda.

CAFOD concluded its response by saying: "This is a watershed year for the G20 as it comes to the end of its first action plan on development. It has much work to do before its promise of a global economy that promotes shared, inclusive and sustainable growth can be realised."


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