Yet another meeting of world leaders is fast approaching – this time the Group of 20 (G20) London summit on April 2. The agenda for this economy-minded gathering of industrial and developing nations is, unsurprisingly, the global financial crisis — the worst money mess the world has seen since the Great Depression that followed the Wall Street stock market crash of 1929.
The conference takes place against a grim backdrop: recession, bank failures, regulatory wreckage, falling trade, rising unemployment, creeping protectionism, mind-boggling bailouts and stimulus packages, shaky environmental and anti-poverty targets, declining investments in renewables, and growing public anger.
In east London’s Docklands — until the crisis, a glittering symbol of the British capital’s global financial dominance — presidents and prime ministers will join the usual cast of G20 finance ministers and central bankers. Their aim: to build on commitments made in Washington last November and set a course for economic stability and recovery.
At the same time, interest groups representing myriad social causes and a wide range of viewpoints will be on the streets of London, demanding real change this time, rather than a quick fix, or more promises. As the British newspaper the Observer noted earlier this month: “There is a certain edginess in the air, not because of warnings of a ‘summer of rage’, but because of those who feel they have history on their side for once.”
In short, many of the protesters are demanding nothing less than a replacement for the current economic model, which they see as a private-profit-based disaster. Although the financial crisis has — in the words of the development charity War on Want — “opened up space for alternatives to the failed neo-liberal model of globalisation”, few expect the G20 leaders to deliver anything fundamentally meaningful. (Britain, however, will be delivering a heavy police presence, both to protect the leaders and to keep the protesters away from them and the institutions they defend.)
The G20 is made up of the finance ministers and central bank governors of 19 countries (China among them), plus the European Union, which is represented by the EU’s rotating presidency and the European Central Bank (ECB). Working with officials of the World Bank and the International Monetary Fund (IMF), they gather periodically to promote discussion between industrial and emerging-market countries on key issues of global economic stability.
Together, the member countries represent nearly 90% of global gross national product (GNP), 80% of world trade and two-thirds of the world’s population. The G20’s economic weight and broad membership, says its website, “gives it a high degree of legitimacy and influence over the management of the global economy and financial system”.
Host Britain says the leaders must make three commitments at the London meeting: to take whatever action is necessary to stabilise financial markets and enable families and businesses to get through the recession; to reform and strengthen the global financial and economic system to restore confidence and trust; and to put the global economy on track for sustainable growth.
Delving deeper, the British development organisation Rights and Humanity noted in a briefing document for an “emergency congress” in February: “[T]his global conversation must go beyond how advanced and emerging economies will work together to stabilise the global economy. Plans for economic recovery cannot be at the expense of the environment or the world’s poor.”
Managing future global prosperity, the group said, should include making continuing progress on the United Nations’ Millennium Development Goals for combating poverty and disease, as well as providing for low carbon-based growth and ensuring climate security, while protecting the poorest people. “If we are to address financial failures, develop structures to warn of early problems and equip international institutions to be more representative, effective and responsive to global challenges,” it added, “our leaders must together start the process of setting out a long-term vision for managing the world in the global age.”
How the G20 summit ultimately is judged will depend, of course, on the decisions that are made at this critical juncture, and what follows from them. The stakes could not be higher. The IMF, which expects the overall global economy to contract in 2009 for the first time in 60 years, has warned: “Turning around global growth will depend critically on more concerted actions to stabilise financial conditions as well as sustained strong policy support to bolster demand.”
George Soros – the global financier, philanthropist and author of The Crash of 2008 and What It Means – sees the London summit as “a make-or-break event”. Writing in the Financial Times earlier this week, Soros said the meeting’s central concern must be to help vulnerable, less-developed countries protect their financial systems. “This is in the common interest,” he argues. “If the periphery economies are allowed to collapse, the developed countries will also be hurt.”
Soros expects the G20 to produce concrete results in that “the resources of the IMF are likely to be doubled” through mechanisms at the fund’s disposal. “This will be sufficient to enable the IMF to help specific countries at risk,” he writes, “but it will not provide a systemic solution for the less developed countries.” That, he says, can be addressed later – essentially by the international creation of money, a move he says will “give heart to the markets”.
As the politicians and bankers prepare to convene, scores of diverse campaigning organisations – grouped under the umbrella of “Put People First” — will be marching and rallying “for jobs, justice and climate” on March 28. A coalition of development charities, labour unions, faith groups, political organisations, environmentalists, anarchists, anti-war groups and others, “Put People First” is calling for “a fair, sustainable route out of recession” and says “there can be no going back to business as usual”.
“Even before the banking collapse,” the group says, “the world suffered poverty, inequality and the threat of climate chaos. The world has followed a financial model that has created an economy fuelled by ever-increasing debt, both financial and environmental. Our future depends on creating an economy based on fair distribution of wealth, decent jobs for all and a low-carbon future.”
The coalition — said to represent more than 10 million people in the United Kingdom — includes ActionAid, Save the Children, Friends of the Earth, Greenpeace, Climate Camp and People & Planet, plus other pressure groups, large and small. Variously, their goals include support for ordinary workers around the world who have been devastated by the effects of the financial crisis; protection for the poorest of the poor (who again are suffering the most); a new global economic system based on justice, democracy and public good; and market reform that produces a system serving the people rather than the dominating them.
“World leaders must seize this opportunity to tackle climate change and the economic downturn together,” according to the Stop Climate Chaos Coalition. “Only by investing in green jobs and thriving low-carbon economies will a sustainable way of life be secured for generations to come. The G20 owes it to those most at risk, and yet least responsible for both the economic crisis and the threat of climate chaos, to agree a global green new deal.”
Friends of the Earth (FoE) called on the G20 leaders to “focus on the human side of the financial and climate crisis”, to “act to prevent dangerous climate change and make progress on climate justice”. The group added: “Climate justice would mean the world’s poorest people aren’t left to deal with a problem they did little to create.”
Noting that the G20 countries are the biggest per-capita polluters “and have done the most to cause climate change by pumping out greenhouse gases for hundreds of years”, FoE said: “We must show real global leadership by developing a genuinely low-carbon domestic economy, rejecting the temptation to avoid real action by buying ‘offsets’ from abroad. Investing in clean green energy sources and cutting energy demand will slash emissions, reduce our dependency on fossil fuels and create millions of new green jobs.”
People & Planet, the UK student-action network, says young people are “concerned about their own futures, about conflict and climate change, but also clear about how universities and governments are perpetuating the problem and what needs to be done”. At a time when “even our most experienced economists and politicians are desperate for ideas,” the Observer quoted the group as saying, “we would be foolish to dismiss passionate young people as ‘idealistic’. Instead, let’s listen to what they are telling us and build a green future that puts people first.”
The London-based Bretton Woods Project, which scrutinises the activities of the World Bank and the IMF, says existing policies and institutions have created a system “scarred by poverty and inequality, and which faces environmental catastrophe”. The World Bank and the IMF must be made “fully transparent and accountable”, the group says. “Rebuilding the economy is a task that must engage us all.”
(The project is named for the original Bretton Woods conference, held in the American state of New Hampshire in 1944. That gathering’s goal was to avoid a repetition of the 1930s economic disasters that preceded the Second World War. Attended by representatives of 44 countries, Bretton Woods established rules for rebuilding the post-war economic order, creating a new monetary structure governing financial and commercial relations among the world’s leading economies. Among its creations: the IMF and the International Bank for Reconstruction and Development, or IBRD — the World Bank’s original institution.)
The Bretton Woods Project found that “a lot of urgent and important aspects” were missing from the communiqué of the G20 finance ministers and central bankers who met in southern England in mid-March to prepare for the London summit. “The communiqué does not recognise that this is a systemic crisis, nor is there any sign of a fundamental change in the financial architecture,” the group said. “The reform steps do not take into account the most pressing concerns regarding the environment, inequality and justice.”
More IMF and World Bank lending for crisis-hit countries, the organisation added, is not all it takes to end poverty or to provide safety nets for people — and, in fact, such lending may accelerate the debt spiral, include conditionality and fail to tackle the roots of the problem.
Outside the “Put People First” umbrella, other groups also are streaming into the swelling river of protest expected in London in the days ahead. Events scheduled for April 1 — “Financial Fools’ Day” and “Fossil Fools’ Day” — include a blockade of financial institutions, including the Bank of England, and carnival-like parades led by “the four horsemen of the Apocalypse” but organised by a group called G20 Meltdown. “Capitalism have been heating up our world for years, melting the ice caps, burning up the rain forests, pushing the planet to tipping point,” it says. “Now we’re going to put the heat on them.”
Calling for the overthrow of capitalism, G20 Meltdown says: “Let’s be patriots for the only country we have got: Planet Earth. Only then can we adequately respond to the message of the climate scientists about the clear and present danger to our biosphere, investing in life for our grandchildren, not in death and oil wars. … Our beautiful planet has ample resources given a fair distribution to all its citizens. But the voracious ideology of unlimited consumption and growth can only lead to runaway climate change, threatening all life on earth.”
People who’d like to work in smaller social-networking groups to address a local, national or global challenge are being encouraged to join “we20”, rather than G20. The initiative invites registered members to meet in their own groups of 20, to discuss and agree on a plan, then to share it with the wider “we20” community. As with the big street protests, the idea is “strength in numbers”. (See some “We20” comments here).
As leaders fly in to London from around the planet, some critics have asked if the G20 is actually too big and too diverse to come to any meaningful agreement, let alone British prime minister Gordon Brown’s earlier hopes for a “global new deal”. Old rifts between Europe (particularly Germany) and the United States, some say, may well resurface, while emerging-market countries may worry that their views are not being listened to. Others note that the very poorest countries of sub-Saharan African still are not included in the process.
Writing in the Financial Times, Brazil’s president, Luiz Inácio Lula da Silva, looked forward to a human-centred post-crisis society that aims to reduce “the imbalances that scar the world today” and is free of “economic dogmas … presented as absolute truths”. He added: “New energy policies, reform of systems of production and patterns of consumption will ensure the survival of a planet threatened today by global warming.”
Along with Brazil, the governments of China, India and Russia said this month that emerging economies should have a bigger say in the global financial system, better reflecting their “real economic weights”. China’s finance minister, Xie Xuren, called for joint efforts to speed up reform of the IMF and World Bank, and to build a new global financial system that is “fair and square, compatible and orderly”.
When they meet at the G20 summit for the first time, Chinese president Hu Jintao and his US counterpart, Barack Obama, are expected to discuss environmental issues, among other topics, in bilateral talks. Relations between the two countries – the planet’s largest emitters of the greenhouse gases linked to climate change — are off to an excellent start, said vice foreign minister He Yafei this week.
China and the United States — as well as Japan and Britain — say they intend to ensure that spending on the environment (and science) is not seriously affected by the recession. Spending for a variety of programmes has been included in national stimulus packages, but some schemes have been dropped.
Wu Xiaoqing, vice minister of environmental protection, noted in mid-March that China will not compromise its environmental standards when approving stimulus projects. “We’d rather be seen as the bad guy at the moment than make our way into history as sinners,” he said.
For its part, Japan announced at the G20 finance ministers’ meeting an additional US$5-billion loan fund to help developing Asian countries with environmental infrastructure, such as water and sewage, solar power and transport systems.
The World Bank president, Robert Zoellick, has warned G20 leaders that if they don’t clean up their banking systems, their economic stimulus packages will be “just like a sugar high. It pushes some energy into the system, but then you get the let-down unless you reopen the credit markets.”
While the G20 summit isn’t likely to be very sweet, many people undoubtedly will feel let down when it ends. A planet with a rising fever and a very sick economic system – indeed, one “put on artificial life support”, in George Soros’ words — will need to swallow some bitter medicine for a long time before things get better.
What should the G20 leaders focus on at their London summit? If you were chairing the meeting, what would you recommend its members do to help the world recover from the economic and financial crisis? Is the severity of the crisis an acceptable reason for cutting back on emissions-reduction targets, investment in green technology and other environmental goals?
Let us know on the forum what you think.
Maryann Bird is associate editor of chinadialogue.
Homepage photo by Vigilant TV