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Time for the G20 to be global leaders where it counts

Last week on November 4th, the UNDP published its 20th anniversary Human Development Report (HDR), one of the milestone publications of the United Nations and a definitive source for data on poverty, inequality and socio-economic trends.  In looking back at this UN agency’s work over the past two decades, the report quotes the very 1st edition of the HDR, reaffirming that “people are the real wealth of a nation”.  The first report broke new ground in arguing that national development should be measured “not just by economic growth, but also by health and education achievement.”

This week, leaders from the most powerful countries in the world, which combined represent over 80% of global GDP, are convening in Seoul to try to resolve some critical challenges around the global economic outlook.   However, despite its ambitious agenda this meeting seems divorced from addressing some of people’s real economic and social rights concerns in the aftermath of the 2008 Financial Crisis.  Will the G-20 make the effort to put people first as it negotiates what -according to its agenda- appears to be a new deal in the existent economic order?

Some of the items on the G-20 agenda include meeting previous G-20 commitments: safeguarding the ongoing recovery and restoring fiscal sustainability; ensuring strong, sustainable, and balanced global growth; building a stronger international financial regulatory system; and modernizing international financial institutions.  However, this year, two new agenda items have also been included: “strengthening global financial safety nets to assist countries to deal with capital volatility”, and “narrowing the development gap and reducing poverty with the end to achieve strong, sustainable and balanced growth”.  The outcomes of the G20’s attempts to tackle thorny issues around the global trade, financial and monitoring system will surely bear an effect on the consolidating the MDG’s Global Partnership.

And with donor country performance on the attainment of MDG 8 falling very short of expectations, the G-20 has all the reason to be “interested in” renewing discussions on the role of international cooperation in development.  Secretary General Ban Ki-Moon noted recently that “economic uncertainty cannot be an excuse for slowing down our development efforts or backing away from international commitments to provide support”.  Most donor countries, particularly the most wealthy, are far-off from meeting 0,7% GDP overseas development assistance.  Save the Children reports that out of 25 billion USD pledged by the G-8 to Sub-Saharan Africa in 2005, just 12 billion has been delivered.  Wavering commitments and volatility in international aid is undermining its very effectiveness.  Meeting development aid commitments should be given top priority if the MDGs are to be met by their 2015 deadline.

But more than anything, the 2008 Financial Crisis has made evident that the failures of the current global financial architecture are being felt by some of the world’s most vulnerable groups, who are also some of the most powerless to demand accountability from national governments as well as the international community.  As much as the world is facing a global economic crisis, it is also facing a human rights one as well.  The 2010 Human Development Report notes that 34 million people lost their Jobs as a result of the Crisis, and 64 million more people fell under the $1.25
a day threshold for measuring extreme poverty.  It is evident that the Crisis, which began in developed countries, is hitting the developing world the hardest and will be felt long after rich countries have recovered. 

For this very reason, it is critical that development and international cooperation not get sidelined at the G-20 discussion or treated as an add-on agenda item.  The G-20 meeting in Seoul should not be just about fixing, reforming and regulating the existing economic order.  Rather, the Summit should focus on a more transformative agenda to make the global economic system more accountable and transparent, with the goal of establishing not just stable and sustainable growth, but an equitable one that is beneficial for all as well.

Unfortunately, the G-20, despite being such an influential force for this change, is one of the most non-transparent and non-participatory forums to discuss global economic reform, reinforcing power imbalances through a process that itself is reserved to a powerful few.  An advance NGO coalition statement was made that, in its very first recommendation, urged the G-20 to “recognize the links between illicit outflows of capital from developing countries, absorption of those resources by tax havens and financial institutions in international financial centers, and the adverse impact those flows have on poverty alleviation and economic development.” 

One of the hopes is that a “Seoul Consensus” on development aid (a namesake of the failed Washington Consensus) will come out of this G20 summit.  However, it is critical that G20 leaders move beyond the usual prescriptions on economic growth for the developing world that have been anchored in market-led, laissez-faire dogma.  It is time for G20 leaders to acknowledge their extra-territorial human rights obligations in their immediate crisis responses and longer-term decisions on economic policy and governance.  The terrible consequences of the crisis are often accepted as inevitable, unfortunate side effects, rather than inherent flaws in the design of the global economic system itself.  CESR challenges this complacency and urges the G20 to take human rights considerations into account in its discussions.  The final communiqué of the G20 will be eagerly anticipated.

Posted by Victoria Wisniewski Otero on November 12th, 2010
Posted in Blog