The Financial Times published the leaked G20 draft communiqué yesterday in advance of the summit’s Thursday meeting in London. According (pdf) the UN Millennium Campaign, “the global economic crisis threatens to reduce development assistance by at least $4.5 billion as a result of contractions in Gross National Income, force more than 50 million more people to live in poverty and set back the fight against poverty by up to three years. Already, more than 130 million people were pushed into extreme poverty as the result of soaring food and fuel prices in 2008. This is particularly cruel and unjust given that the crisis is of the rich world’s making.”
As far as the developing world and the United Nations are concerned, the communiqué reconfirms the commitment of the G20 countries to the Millennium Development Goals and promises an unspecified amount of money for “social protection” for the poorest countries.
On MDGs and food security:
“The worlds poorest are most at risk from the crisis and we are resolved to support them. We remain committed to meeting the millennium development goals and to achieving our ODA pledges including commitments on aid for trade. We are making available $[x] in social protection for the poorest countries, alongside investing in food security and we support the World Bank’s vulnerability financing framework.”
“World trade is falling for the first time in [25 years]. We need to sustain the benefits of globalization and open markets, and promote trade as a crucial driver of growth in the world economy. Therefore: • we reaffirm the commitment made in Washington not to raise new barriers to investment or to trade in goods and services, including within existing WTO limits, not to impose new trade restrictions, and not to create new subsidies to exports.”
On IMF assistance:
“We have agreed to increase the resources available to the IMF to $[x] through bilateral borrowing from members of $[x] subsequently replaced by an expanded New Arrangements to Borrow of $[x] and borrowing in the market of up to $[x] if necessary.”
“We call on the UN to establish an effective mechanism to monitor the impact of the crisis on the poorest and most vulnerable. We have also asked the IMF to bring forward, by the Spring Meetings, proposals to use the proceeds of agreed gold sales to support low income countries.”
International Financial Institution voting rights and representation:
“We commit to implementing the package of World Bank voice reforms agreed in October 2008. We call on the World Bank to make concrete recommendations by the Annual Meetings on shareholding, voting, voice, and internal governance, taking account of the development mandate of the Bank, and guided by the principles of shared and common responsibility. These reforms should be completed by the Spring Meetings in 2010.
Although this doesn’t pertain directly to the plight of the worlds’ poor, you might be gratified to know that the G20 is tackling the issue of executive pay and bonuses:
“To endorse the [financial stability forum's] common principles on pay and compensation in financial institutions. These ensure compensation structures reward actual performance, support sustainable growth, and avoid excessive risk-taking. We have asked our supervisors to implement these principles.”
It is too early to give a full critique of the communiqué since the G20 leaders haven’t actually met yet and formally agreed to these points and hammered out actual figures, we can point to a few highlights and trouble spots:
Supporting the Millennium Development Goals, working to achieve Official Development Assistance pledges including commitments on Aid for Trade, allocating for social protection programs and investing in food security are good signs but much more needs to be done to achieve the long-term goals.
There will be significant resource inflows to the IMF and the Regional Development Banks which is welcome, but there is little to know discussion about restructuring International Financial Institution financing mechanisms to include more favorable conditions.
In advance of the Thursday’s summit, the UN Millennium Campaign issued a press release and policy document outlining recommendations for the G20 leaders. We’ll keep you informed on how they fare after the meeting.
G20 leaders must:
• Provide additional resources for poor countries deal with the crisis but caution not to let the solution become the problem; resources provided must come without harmful conditionalities and/or increase indebtedness
• Restructured international financial institutions must be more representative with poor countries having a greater voice.
• The economic crisis should not be used as an excuse for rich countries to renege on their aid commitments to poor countries, which are already bearing the brunt of the financial crisis. OECD member countries of the G20 must reaffirm their previous commitments to allocate 0.7% of their GNI for development assistance, establish transparent, time-bound calendars for the disbursement of funds.
• G20 leaders are being reminded of their pledge for a moratorium on protectionism made on 15 November 2008 and are being called upon to develop structures for effective monitoring and supervision to prevent further protectionism.