G20: Poor countries must get a seat at the table

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Despite some initial excitement prompted by Gordon Brown’s support of an international tax on banks, last weekend’s G20 finance ministers’ meeting was not a big event for political decision-making, especially for poor countries who weren’t even invited to attend.

The G20 has been welcomed in some quarters as a more inclusive grouping than the G8 club that did not include any developing or emerging economies.

But the G20 does not include any of the poorest countries, even though it makes decisions that directly affect them. Under these circumstances, can the G20 be good news for the poorest countries?

The G20 response to the financial crisis has been a mixed bag so far for those countries. The crisis has put issues on the table that were previously taboo among the world’s leading economies – such as the idea of global taxes on financial transactions and new rules for business to curb tax avoidance.

The G20 has risen to the challenge of debating these difficult topics. It has also refocused their attention on the fundamentals of what markets should deliver – such as decent jobs and food security.

The G20 has even recognised the need to improve international governance to give the poor countries a greater say in key bodies such as the International Monetary Fund and World Bank.

However, the G20 has not delivered much beyond rhetoric for developing countries. Although pledges have been made to support vulnerable countries during the downturn, very little has been delivered. It has failed to generate much needed political momentum on key development issues, such as climate financing.

One concrete task set for the St Andrew’s meeting by G20 leaders at Pittsburgh summit was for finance ministers to develop a range of options for climate financing, but ministers only managed a commitment to “take forward further work”.

The G20 also risk repeating the mistake of making decisions that will affect poor countries without consulting them. One of the few concrete actions of the St Andrew’s meeting was the launch of the “G20 Framework for Strong, Sustainable and Balanced Growth”.

Although this framework is essentially about how G20 countries will manage their own economies and cooperate with one another – those decisions will directly affect the prospects of poor countries coming out of the crisis.

The framework also talks about putting economic policy more at the service of poverty eradication – but again, does not include the countries that will determine whether such goals might be achieved – the poorest countries themselves.

Reforming the international financial institutions and giving them a direct role in the framework may be a step towards ensuring developing country concerns are on the G20’s reform agenda.

However, sidelining United Nations processes for a coordinated response to the crisis, and putting the G20 configuration on a more permanent footing as their “premier forum” for economic cooperation, must count as two steps back.

Africa and the Least Developed Countries (LDCs) continue to be hardest hit by the crisis. The World Bank’s predictions were that Africa’s growth prospects would be cut by half for 2009, with LDCs experiencing a similar deceleration.

The G20 not only needs to demonstrate a much greater commitment to development within its own agenda, if it wants to help the citizens of poor countries, it must ensure their governments have a seat at the table.

Posted by Christina Weller, CAFOD’s economist

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