March 30, 2010G-20 Panel Calls for Implementation of Accords
The leaders of five members of the G-20 Steering Group urged G-20 member nations to carry out the agreements reached at the past meeting in Pittsburgh quickly to reform the global financial regulatory framework and create post-crisis measures.
In a letter, signed by South Korean President Lee Myung-bak, Canadian Prime Minister Stephen Harper, U.S. President Barack Obama, U.K. Prime Minister Gordon Brown and French President Nicolas Sarkozy, the steering group called for stronger policy coordination among G-20 countries to strengthen the status of the summit as the premier global economic forum.
The letter, made public simultaneously in the five nations, was sent to heads of the other G-20 members.
The action reflects common understanding among the five that a strong political commitment is necessary to put the accords made in Pittsburgh ― such as financial reform, free trade and job creation ― into action ahead of the planned meetings in Toronto in June and Seoul in November, said Sohn Jie-ae, spokeswoman of the Presidential Committee for the G-20 Summit.
``As the past, current and future chairs of the G-20 Summit, we are writing to you today to emphasize the need to implement our commitments to ensure strong macroeconomic policy cooperation and to continue our regulatory reform,'' said the letter.
The leaders said the nascent recovery of the world economy remains fragile.
``Current strains illustrate the continuing risks to global economic financial stability,'' the letter said. ``It is vital that we continue to work together to achieve our mutual objectives in addressing new and emerging risks, safeguarding stability and supporting a robust return to growth and job creation in all our economies.''
Last week, experts from South Korea, Canada, the U.S., the U.K. and France, met in Ottawa to review key elements of the G-20 agenda in 2010. According to the letter, progress was made at the meeting to set the stage for the Toronto summit and the later one in Seoul.
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The G8 and G20 2010 Summits - An Agenda for Global Development
Priority Two: Transforming the Global Economic and Financial System
The impact of financial crisis on the developing world is devastating: an additional 46 million people are living on less than $1.25 per day; export growth has slowed, exacerbated by lack of available trade financing and a fall in commodity prices; and foreign direct investment has retreated, forcing both the devaluation of local currency and a rise in the price of imports. Further, the IMF estimates that 28 countries already have external debts in excess of 60% of GDP, putting them at risk of default.
The World Bank estimates that external financing needs (in the form of private capital flows) of 59 countries would not be met in 2009, leaving a gap of US$352 billion. Devaluation, perhaps more than inflation, is a concern. Declining remittances from workers in recession-affected countries mean that families in the developing world, who depend on remittances to supplement their income, are no longer able to support their households.
The G-20 has begun to address the short-term impact of the crisis. But of the $1.1 trillion in funding announced by the G-20 in 2009, only $50 billion is expected to go to the world’s poorest countries. Although the IMF and the World Bank have introduced new forms of social protection and have reduced the number of conditions attached to new loans, many of the remaining conditions (including public sector wage freezes or cuts, pension freezes, utility price hikes and rising interest rates) will undermine these attempts to increase social protection.
In 2010, G20 leaders have the opportunity to begin transforming the global economy—both its systems and institutions—so that it can deliver decent work and sustainable development to all parts of the globe. Through fairer international rules and policies for trade and finance and the democratization of the international financial institutions (IFIs), the G20 can address the structural flaws that have exacerbated the financial crisis and help build a strong public sector that can support measures to mitigate its most adverse affects.
To do this, it is critical to have a leader’s forum that addresses the needs and interests of a diverse range of countries, as well as the broader public interests of the global community. G8 and G20 leaders must commit to transition to a more representative forum; one that adheres to principles of transparency, accountability and inclusivity of the world’ poorest nations and citizen’s voices. Such a transition must be done within the broader context of strengthening multilateralism more generally, and the role and place of the United Nations in the international system in particular.
The Toronto G20 should build on the findings of the UN Commission of Experts on Reforms of the International Monetary and Financial System and the outcome document of the UN Conference on the World Financial and Economic Crisis and its Impact on Development, by announcing specific G20 initiatives aimed at a sustainable global economic recovery that serves as a transition towards a low-carbon green economy.
Opportunity: Ensure global economic recovery for all
Provide emergency grants for developing countries to pursue their own counter-cyclical policies, including introducing social safety nets, measures to protect livelihoods of the poor, and to strengthen the public provision of essential services. Such grants should be without the harmful policy conditions that limit democratic ownership of country-led development priorities.
Provide 100% debt cancellation for all indebted poor countries, taking account of the impact of the triple crises of finance, food security and climatic change. A renewed G8 debt initiative should support the establishment of a sovereign debt workout mechanism that is fair, transparent and independent. Such a mechanism should help ensure the responsible nature of future lending and advance the debate on odious and illegitimate debts.
Opportunity: Make global rules and institutions fair
Initiate a process with other countries to transform the current structure of the G20 into a forum that kick-starts a new era of multilateral cooperation – one that models democratic principles of inclusion, representation, transparency and accountability.
Lead efforts to transform and democratize the World Bank and International Monetary Fund through meaningful accountability to the United Nations and to internationally agreed standards for human rights, labour and the environment. The G20 should respect the development of regional monetary and financial initiatives that promote sustainable human and economic development.
Commit to full civil society involvement in decision making at the national level and in the world’s workplaces. Basic freedoms and rights to participate should be a hallmark of G20summit decisions, including for workers and trade unions to engage employers for needed production changes and for the poor and vulnerable groups to shape a future that addresses their concerns.
Opportunity: Implement new rules for trade and finance
Create new rules for regulating both the mechanisms and the flows of global finance, including for hedge funds, tax havens and speculative capital flows. Such rules should ensure that financial institutions, markets and financial products are transparent and publicly accountable.
Commit to a new multilateral trade deal that prioritizes development. This should include new mechanisms to regulate the volatility of commodity prices, tools to support infant industry and small farmers in developing countries, and the rapid elimination of harmful agricultural subsidies. Such a deal should allow for more space for poor countries to protect jobs and public health and to control the pace and extent of liberalization, particularly in financial and other services.
Opportunity: Transition to a sustainable economy:
Promote a coordinated international recovery strategy that emphasizes green and decent job creation and public investments. Measures should be introduced to reduce the risk of unemployment and wage losses, and to support the purchasing power of low-income earners, including single earner households that are overwhelmingly female-headed and households with a parent with a disability.
Support innovative financial mechanisms to meet urgent financial requirements for climate change, development and the MDGs, such as the following: supporting the existing levy on airline tickets in 13 European and developing countries; a carbon tax on wealthy countries’ CO2 emissions (or an equivalent mechanism); a global currency transaction tax; and a global financial transactions tax.
http://halifaxinitiative.org/content/g8-g20-2010-agenda-global-development
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