Package for the poor
A joint agency op-ed on the G20
Chief-of-Staff for President Obama Rahm Emanuel’s quote of the year, “you never want a serious crisis to go to waste” sounds glib taken out of context. But he is right. It takes extreme situations to force decisions that go against normal short-term political interests.
So it is that governments such as the UK and the US are saddling their taxpayers with vast debts to bail out their banks and finance sector, spending unthinkable amounts of money for normal times (at least $8.4 trillion and counting) to correct the results of complacency ideology and greed.
Finding the opportunity in a crisis is more than a snappy political catchphrase. It is the opportunity for the leaders of the G20 meeting on April 2nd to take long-term decisions in the interests of people and the planet.
The disasters facing the rich countries of the G20 are already being dwarfed by the catastrophes faced by poorer ones. More than 20 million people in China have already lost their jobs since October. The World Bank is predicting 53 million people being thrown back into poverty, on top of the 150 million hit by the food crisis last year. The ILO suggests 200 million job losses.
While the rich countries created this massive shock, the poor countries will be by far worse affected and for much longer. Already they are suffering huge reductions in remittances, commodity prices, exchange rates, access to credit, trade volumes and terms of trade. In 2008-9 alone, developing countries lost $750 billion in GDP and $800 billion from capital inflows.
For millions of the world’s poorest citizens, particularly women and children, the outcomes of the G20 meeting in London are a matter of life and death. Even greater numbers of people face a huge threat to their human rights, such as for housing and education. Greater poverty will threaten global security by fueling social unrest and conflict. Some governments could use harsh methods to suppress dissent and labor agitation, as seen last year in response to food protests. The prospects for a global climate deal in Copenhagen seem to have diminished. With only 100 months to reverse carbon emissions before we are destined to irreversible and potentially catastrophic impacts, we simply cannot afford these talks to fail.
The real challenge for the G20 leaders is to embrace a new kind of politics. They must rise above the usual competitive, nationalistic approach they typically take into international negotiations. We need collaboration not brinkmanship. We need long-term thinking, planning and commitment at the global level.
It is particularly important that the G20, not so much a Coalition of the Willing but more a Coalition of the Specially Invited, remembers that while they may represent 85% of the global economy, their actions will affect the 170 countries not represented, among them the poorest and most vulnerable.
Stabilizing and reviving the global economy must be the short-term priority. The bigger agenda – with the greatest opportunities – has to be about protecting the environment and meeting people’s basic subsistence rights to food, education, shelter, health, decent jobs and sustainable livelihoods. The global economy must be rebuilt better than it was before. We need a political stimulus too that will promote basic freedoms and the accountability of governments and business.
A stimulus package must put equity and security at its heart. It must be global, not just for rich countries. The UN has called for 1% of all wealthy country stimulus packages to be dedicated to developing countries. Effective policies to boost spending on social protection, infrastructure, agriculture and human capital could help poor countries get back on a sustainable growth path and prevent a slide into worse poverty and debt.
It is estimated that a minimum of $41 billion of aid is needed for Low Income Countries (based on a stimulus package of 5% of their GDP.) Even adding this to the Gleneagles G8 promise to increase aid spending by $50 billion by 2010 would still be less than half the combined bailout of AIG.
It is estimated that developed countries need to commit at least $140 billion public funds annually to enable developing countries to speed up the switch to clean technology, to rapidly reduce tropical forest destruction and to help poor communities adapt to unavoidable climate change. The G20 meeting should boost the momentum for transition to a low-carbon economy. These are huge amounts of money but only a fraction of what has been committed to the bank bailouts. It is no longer acceptable that these issues be put aside simply because of cost.
We strongly support calls to reform the Boards of the World Bank and the IMF. We welcome recent proposals to reduce IMF loan conditionalities that demand poor governments cut basic services to their citizens. It is essential that the G20 take concerted action against tax havens and corruption.
The G20 leaders must inject a sense of hope and a belief that these opportunities can be grasped if we are committed and act with urgency. President Obama has been elected on a sea of belief that change is possible. This kind of hope is essential to overcome the current paralyzing crisis of confidence. Our political leaders can only regain public confidence by demonstrating they have the will to solve the problems with ambition, justice and urgency.
Irene Khan – Secretary General, Amnesty International
Dr Gerd Leipold – Executive Director, Greenpeace International
Jeremy Hobbs – Executive Director, Oxfam International
Dr Dean Hirsch – International President, World Vision International
Dr Robert Glasser – Secretary General, Care International
Charlotte Petri Gornitzka – Secretary General, International Save the Children Alliance
Nigel Chapman – CEO Plan International
Ramesh Singh - CEO Action Aid