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Decisive action needed by G20 to help poorest countries
By Kofi A. Annan, Amartya Sen and Michel Camdessus |
September 25, 2009, Friday
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ALMOST six months ago, at a moment of great alarm about the global financial and economic crisis, G20 leaders met for a historic summit in London.
Their collective commitments to stimulate, regulate and restructure global economic activity helped to calm nerves around the world.
Many of the problems that spurred the London summit remain real. Anxiety levels may have come down, in board rooms and stock markets, but the daily drama for survival continues.
Indeed, for many people it has deepened, in the villages and streets of the world's least-developed countries - particularly in Africa.
The United Nations and the World Bank predict that the effects of the economic meltdown will be felt in the developing world for a long time to come. Jobs have gone, incomes have been lost and opportunities foregone.
Tens of millions of people have been added to the hundreds of millions already below the poverty line, reversing progress toward attaining the world's Millennium Development Goals.
The London G20 meeting recognized that the world's poorest countries and people should not be penalized by a crisis for which they were not responsible.
With this in mind, the G20 leaders set out an ambitious agenda for an inclusive and wide-ranging response. If the Pittsburgh summit is not to be an anticlimactic end to the G20's ascendancy as a forum for decisive action, the momentum generated must be maintained.
For the poor
Four issues provide the opportunity to do so.
First, G20 leaders need to follow through with the commitments they've made to a Global Plan for Recovery and Reform. There are some encouraging signs. For example, in July, the International Monetary Fund commendably announced a substantial increase in concessional lending to least-developed countries.
Several of them, including Ethiopia, Malawi and South Africa, have already been allocated Special Drawing Rights to help them cope with the economic crisis.
But some vulnerable countries are still struggling to finance countercyclical investment and expanded social protection services.
It raises questions about the stringencies of the World Bank's eligibility criteria and allocation models that can prevent support of the most needy. This underscores the case for a second area of action - ensuring that developing countries, including least-developed countries, have a greater say in global financial institutions, and strengthening regional bodies such as the African Development Bank.
The Bretton Woods Institutions such as the World Bank and IMF recognize that becoming more inclusive would make them more relevant to the reality and diversity of today's global community and more effective as vehicles for addressing climate change adaptation and poverty reduction. But the pace of change needs to be speeded up, ensuring that the IMF in particular is able to adapt to post-crisis challenges.
Free trade
Architectural and institutional reform has to be complemented by a third achievement: agreement on a timetable for tackling the variety of biased trade rules, bloated subsidy regimes, intellectual property rules and other forms of market distortion which heavily disadvantage the developing world.
Here the G20 could play a particularly constructive role, especially when it comes to the revival of the Doha Trade Round, the reduction of duties, tariffs and quotas on exports from the least-developed countries, and the gradual elimination of domestic subsidies.
Lastly, the G20 could help drive momentum on climate change. Its members represent the majority of global greenhouse gas emissions. Agreement among them at Pittsburgh would go a long way towards ensuring that December's international Climate Change Conference in Copenhagen does not end in hot air.
(Kofi Annan, a former secretary-general of the United Nations, is chair of the Africa Progress Panel. Amartya Sen is a Nobel Prize-winning economist. Michel Camdessus is a former managing director of the International Monetary Fund. Copyright: Project Syndicate, 2009. www.project-syndicate.org.)
Their collective commitments to stimulate, regulate and restructure global economic activity helped to calm nerves around the world.
Many of the problems that spurred the London summit remain real. Anxiety levels may have come down, in board rooms and stock markets, but the daily drama for survival continues.
Indeed, for many people it has deepened, in the villages and streets of the world's least-developed countries - particularly in Africa.
The United Nations and the World Bank predict that the effects of the economic meltdown will be felt in the developing world for a long time to come. Jobs have gone, incomes have been lost and opportunities foregone.
Tens of millions of people have been added to the hundreds of millions already below the poverty line, reversing progress toward attaining the world's Millennium Development Goals.
The London G20 meeting recognized that the world's poorest countries and people should not be penalized by a crisis for which they were not responsible.
With this in mind, the G20 leaders set out an ambitious agenda for an inclusive and wide-ranging response. If the Pittsburgh summit is not to be an anticlimactic end to the G20's ascendancy as a forum for decisive action, the momentum generated must be maintained.
For the poor
Four issues provide the opportunity to do so.
First, G20 leaders need to follow through with the commitments they've made to a Global Plan for Recovery and Reform. There are some encouraging signs. For example, in July, the International Monetary Fund commendably announced a substantial increase in concessional lending to least-developed countries.
Several of them, including Ethiopia, Malawi and South Africa, have already been allocated Special Drawing Rights to help them cope with the economic crisis.
But some vulnerable countries are still struggling to finance countercyclical investment and expanded social protection services.
It raises questions about the stringencies of the World Bank's eligibility criteria and allocation models that can prevent support of the most needy. This underscores the case for a second area of action - ensuring that developing countries, including least-developed countries, have a greater say in global financial institutions, and strengthening regional bodies such as the African Development Bank.
The Bretton Woods Institutions such as the World Bank and IMF recognize that becoming more inclusive would make them more relevant to the reality and diversity of today's global community and more effective as vehicles for addressing climate change adaptation and poverty reduction. But the pace of change needs to be speeded up, ensuring that the IMF in particular is able to adapt to post-crisis challenges.
Free trade
Architectural and institutional reform has to be complemented by a third achievement: agreement on a timetable for tackling the variety of biased trade rules, bloated subsidy regimes, intellectual property rules and other forms of market distortion which heavily disadvantage the developing world.
Here the G20 could play a particularly constructive role, especially when it comes to the revival of the Doha Trade Round, the reduction of duties, tariffs and quotas on exports from the least-developed countries, and the gradual elimination of domestic subsidies.
Lastly, the G20 could help drive momentum on climate change. Its members represent the majority of global greenhouse gas emissions. Agreement among them at Pittsburgh would go a long way towards ensuring that December's international Climate Change Conference in Copenhagen does not end in hot air.
(Kofi Annan, a former secretary-general of the United Nations, is chair of the Africa Progress Panel. Amartya Sen is a Nobel Prize-winning economist. Michel Camdessus is a former managing director of the International Monetary Fund. Copyright: Project Syndicate, 2009. www.project-syndicate.org.)
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