From Caritas England and Wales (CAFOD).
The Korean government put development on the agenda at this week’s G20 summit in Seoul. But as rich countries let their own trade interests dominate the debate, poorer countries risk being squeezed out of the picture.
At the G20 summit, the Korean government worked hard to put a new language of development on the table. But while the dialogue has moved away from old economic policy blueprints and towards partnership-based approaches and multiple paths to development, the delegates let their own trade interests dominate, leading to gaps and setbacks in what the G20 can deliver.
“Every country here in Seoul is obsessing over trading their way out of recession,” said CAFOD’s economics analyst Christina Weller. “It’s weakening the reputation of the G20. This group of leaders has the responsibility to work together to increase global prosperity and steer the recovery. Instead they’re increasingly looking as though they aren’t up to snuff.”
Right now, we’re seeing aggressive language on trade outside the G20, and the self-interest of rich countries is stalling G20 agreement on bread-and-butter issues. It’s a bitter disappointment for development organisations and campaigners, to see vital core issues once more postponed, sidelined, and overlooked.
Speaking at the beginning of the summit, CAFOD director Chris Bain said, “The economic crisis is affecting everyone across the world, but it is affecting the poorest the worst. Even in the most prosperous times, there are millions who live on the margins of existence. These men, women and children are being pushed deeper into extreme poverty by the recession, which ripples out even into the most isolated communities.
“The G20 must support those least resilient to market fluctuations to achieve global sustainable growth. By thinking big but acting to support small farmers and businesses in the poorest countries the G20 leaders will put in place solid foundations for a stronger global economy with poverty reduction at its core.”
Getting down to business
The Korean government has been successful at putting development squarely on the G20 agenda. The “Seoul Development Consensus for Shared Growth” includes some encouraging language around partnership and country ownership. However, despite this fresh approach, the old policies of the Washington Consensus haven’t been entirely left behind. The consensus still falls back on the same response of opening markets while failing to really focus in on the needs of poor countries and the flexible strategies they may need.
What the G20 said…
On infrastructure: no reassessment of poor performance of private sector involvement in energy, transport and communication infrastructure investment.
On trade: stuck to old models of opening markets, which don’t enable poor countries to adopt trade strategies that support development.
On market access: failed to deliver on World Trade Organisation pledges for duty-free, quota-free access to G20 markets for least developed countries; instead made vague promises to “explore” improving and implementing these pledges.
On Aid for trade: no recognition of the need to redirect spending. Current frameworks virtually exclude help to small-scale parts of the economy that provide jobs for the majority of poor men and women.
On growth: recognised the role of private investment, and the need to make it work more effectively for development. However, measures to maximize value-added and responsible investment remain voluntary. Agricultural and informal sectors are not recognised as key to growth in poor countries.
In a new report Thinking Big, Acting Small , CAFOD calls on the G20 in Seoul to Focus on small and micro-businesses owned by poor men and women when deciding which policies to adopt and where to spend their money.