What Needs to Happen at the G20 Summit

Apr 1st, 2009 3:12 PM UTC
By Mikiko Imai

Yesterday, I talked about the leaked draft outcome document of the upcoming G20 Summit and how it compares with what we’d like out of the Summit. G20 leaders’ focus is to restore global growth in light of this current global crisis. In our document that we sent to the G20 governments ahead of the Summit, we emphasise how this crisis is truly a ‘global’ crisis, affecting the very poor in Africa and in other developing countries – which in turn stresses the importance of a global solution that involves the poorest of the world.

We’ve already highlighted in previous posts that decreased economic growth in poor countries will force an additional 53 million people to live on less than $2 a day this year, a rise in absolute poverty that is additional to the 130-155 million more people already pushed into poverty in 2008 as a result of soaring food and fuel prices. While social safety-net programs and stimulus packages are implemented in developed countries, poor countries don’t have the same options. According to a October 2008 Oxfam paper, more than half of the world’s workers and their dependents are excluded from any type of social protection. The impact of the crisis is significant, already being felt across the poorer parts of the world, threatening to unravel major progress made in just the past few years. It is therefore essential that the G20 summit address the needs of the poor. But more importantly, failing to do so could also have ramifications for the rest of the world.

On top of that, Africa has the potential to bring long term benefits to the rest of the world, if it is included in the global solution. Africa offers untapped resources — such as agricultural potential and energy resources — that could potentially help resolve some of the world’s greatest current challenges as well as lift some African countries out of poverty if these assets have the right stewardship. Unfortunately, at this point in time, they all remain potential opportunities that need to be cultivated in order to yield returns to the global community. In order to harness the potential of these opportunities, there is need for immediate and additional investment in Africa through front-loaded development assistance, additional grants and, where appropriate, concessional loans through bilateral channels as well as international financial institutions such as the World Bank, the IMF and the African Development Bank. Investments in infrastructure, agricultural productivity, green investments that could help with climate change mitigation, and development of human capacity are essential elements of this.

In addition, Africa needs new opportunities in order to better integrate itself into the global economy. ONE advocates a number of regulatory and governance reforms including: reforms of the international financial institutions to reflect the voices of developing countries, notably in Africa; Financial regulations reforms to consider illicit capital flight from developing countries and erosion of tax base in developing countries; and ensuring that G20 countries do not retreat into protectionist policies.

-Mikiko Imai

TAGS: G20, G20 London 2009, Policy News