G20 has 'failed to tackle systemic issues' says Jubilee Debt Campaign

By staff writers
April 2, 2009

Jubilee Debt Campaign has expressed "disappointment" that "world leaders have not understood the systemic nature of the economic crisis or 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" it said in a statement.

"Fundamental transformation of the economy is needed both to stem the crisis and build an economy that works for jobs, justice and the climate. The G20 has failed to tackle the underlying systemic issues, and continues to cling to many of the policies that caused the crisis in the first place."

In particular, the campaigners say a stimulus package for developing countries is urgently needed. No new money was announced, although the International Monetary Fund (IMF) has been given a huge increase in the amount it can lend - this now stands at $750 bn.

"Most of this won't go to the poorest countries" the Campaign said. "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."

Campaigners also said that giving more money to unreformed export credit agencies was potentially dangerous. "These agencies have financed projects that have caused social and environmental damage; gone into the hands of corrupt officials, or supported oppressive regimes" the statement said. "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."

Jubilee did however welcome the 'recognition' of problems caused by tax havens, which they said sapped the revenue of poor countries and made them more dependent on international lending, as well as harbouring 'vulture funds' that sought to profit from indebted poor countries. However the campaign said that the changes proposed to tackle tax havens were not comprehensive enough and were without clear enforcement mechanisms. "Countries that sponsor tax havens, such as the UK, need to lead the way in cleaning them up" they said.

'Wider and deeper' debt cancellation was also needed, the statement said, 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 before the crisis. At least some of the proposed IMF gold sales for poor countries should be earmarked for debt relief say campaigners.

Nick Dearden, Director of Jubilee Debt Campaign said: "Gordon Brown has annouced 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. The G20 have failed to take that opportunity, so it is for ordinary people to continue mobilising to ensure that 2009 is a year of change. The voices of all countries, and of ordinary people across the world, must be heard at the UN Conference in June if we are to seize this unparalleled moment to build a genuinely democratic, just and sustainable global economy."

The published communique can be seen at: http://www.londonsummit.gov.uk/resources/en/news/15766232/communique-020409

Keywords:vulture funds | g20
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