Anita Sharma's Blog

G20 Wrap-up

Anita Sharma September 29, 2009 - 10:42 am

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Friday’s G20 summit was heralded as a great success by President Obama and other world leaders in attendance. During his radio address over the weekend, President Obama said:

In Pittsburgh, the world’s major economies agreed to continue our effort to spur global demand to put our people back to work. We committed ourselves to economic growth that is balanced and sustained— so that we avoid the booms and busts of the past. We reached an historic agreement to reform the global financial system—to promote responsibility and prevent abuse so that we never face a crisis like this again. And we reformed our international economic architecture, so that we can better coordinate our effort to meet the challenges of the 21st century.

 We also established American leadership in the global pursuit of the clean energy of the 21st century. I am proud that the G-20 nations agreed to phase out $300 billion worth of fossil fuel subsidies. This will increase our energy security, reduce greenhouse gas emissions, combat the threat of climate change, and help create the new jobs and industries of the future.

Unfortunately anti-poverty and climate action groups bemoaned the fact that real action was deferred to sometime in the future, the Copenhagen Summit in the case of climate change (which begins in 72 days), and responsibility given to the International Financial Institutions like the International Monetary Fund and the World Bank to support the world’s poorest. The full text of the G20 outcome statement is available here.

The UN Millennium Campaign issued a press release at the conclusion of the summit saying:

G-20 leaders have focused on issues such as bonuses and compensation and not on the needs of the 1.4 billion people living on less than $1.25 per day whose very lives are threatened by the economic crisis,” said Salil Shetty, Director of the United Nations Millennium Campaign. “The G-20’s failure to address the needs of the world’s poorest is a worrying sign. Going forward it is critical that the G-20 focus its attention and resources on achieving the Millennium Development Goals.

During the Secretary-General's remarks to the G-20 Summit, he called for the developed world to deliver on promises of $50 billion in aid pledged at the last G20 meeting in London. "The picture it paints should alarm us all: The crisis is having a dramatic and potentially enduring effect on many of the world's poor and most vulnerable people. They are far from seeing any of the so-called green shoots of recovery.

 

No pot of gold at the end of the IMF rainbow

Anita Sharma April 27, 2009 - 3:55 pm

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At this weekend's IMF and World Bank spring meetings, Global ministers warned that the economic crisis risks derailing the MDGs and, in the closing communiqué, "urged donors to accelerate delivery of commitments to increase aid, and for us all to consider going beyond existing commitments."  But, in the end, they did very little to provide immediate relief to the world's poorest.<!--break-->

During the closing news conference held on Sunday, World Bank President Robert Zoellick warned that most of the UN Millennium Development Goals on poverty, hunger, education, equality, disease and infant mortality, were in jeopardy. "Before this crisis the Millennium Development Goals on overcoming poverty by 2015 already looked like a stretch. Our latest research shows that most unfortunately most of these eight globally agreed goals are unlikely to be met. We must continue to act in real time to prevent a human catastrophe."  More of his speech here

The ministers also called on the Bank to assess whether it has enough resources to aid the poorest nations and asked it to report back by October.

In advance of the meetings the World Bank and IMF released the Global Monitoring Report 2009: A Development Emergency (GMR). It warns that that achievement of the Millennium Development Goals are still within reach, but growing more elusive by the day. 

According to the report:

It is estimated that an additional 55 to 90 million people will be trapped in extreme poverty in 2009 due to the worldwide recession. The number of chronically hungry people is expected to climb to over 1 billion this year, reversing gains in fighting malnutrition and making the need to invest in agriculture especially urgent.

Civil society groups left the meeting disappointed because the IMF missed a golden opportunity to come to agreement to provide desperately needed debt relief through gold sales for the world’s poorest countries, instead re-affirming the commitment made by the G-20 to double new lending to poor countries, while instructing the IMF to explore ways of making those loans more concessional. 

The Guardian newspaper today takes a look at the super-sized IMF and its recent lending track record, quoting a study from the Washington-based Centre for Economic Policy Research (CEPR). They say that while rich countries are encouraged to undertake large-scale fiscal stimulus to kick-start economic growth, the IMF program forces poor countries receiving loans to cut back on spending and reduce budget deficits.

There is some window of opportunity because the communiqué leaves open the possibility to provide non-debt creating resources for poor countries from IMF gold. There are growing calls from key governments, African Finance Ministers, and anti-poverty groups to support up to $5 billion in poor country debt relief from the sale of IMF gold and to ensure that G8 countries take action before their July summit in Italy. 

Because Congress must approve new funds for the IMF, groups like the ONE Campaign and Jubilee USA are urging Congressional leaders to support IMF gold sales for debt relief and to advocate for the removal of harmful economic policy conditions on IMF loans.

The Millennium Campaign has consistently said (pdf) that additional resources must be delivered free of harmful conditionalities and without causing another downward spiral of debt.

And if it all these crises – food, energy, economic and climate change weren't bad enough, the World Health Organization reports that that growing cases of swine flu have the potential to become a global pandemic, furthering impacting the ability of countries to achieve the MDGs.

 

A Wholly Different Perspective on the G-20 Meeting

Anita Sharma March 31, 2009 - 9:37 am

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The Financial Times published the leaked G20 draft communiqué yesterday in advance of the summit’s Thursday meeting in London. According (pdf) the UN Millennium Campaign, “the global economic crisis threatens to reduce development assistance by at least $4.5 billion as a result of contractions in Gross National Income, force more than 50 million more people to live in poverty and set back the fight against poverty by up to three years. Already, more than 130 million people were pushed into extreme poverty as the result of soaring food and fuel prices in 2008. This is particularly cruel and unjust given that the crisis is of the rich world’s making.”

As far as the developing world and the United Nations are concerned, the communiqué reconfirms the commitment of the G20 countries to the Millennium Development Goals and promises an unspecified amount of money for "social protection" for the poorest countries.
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On MDGs and food security:

“The worlds poorest are most at risk from the crisis and we are resolved to support them. We remain committed to meeting the millennium development goals and to achieving our ODA pledges including commitments on aid for trade. We are making available $[x] in social protection for the poorest countries, alongside investing in food security and we support the World Bank's vulnerability financing framework.”

On trade:

“World trade is falling for the first time in [25 years]. We need to sustain the benefits of globalization and open markets, and promote trade as a crucial driver of growth in the world economy. Therefore: • we reaffirm the commitment made in Washington not to raise new barriers to investment or to trade in goods and services, including within existing WTO limits, not to impose new trade restrictions, and not to create new subsidies to exports.”

On IMF assistance:

“We have agreed to increase the resources available to the IMF to $[x] through bilateral borrowing from members of $[x] subsequently replaced by an expanded New Arrangements to Borrow of $[x] and borrowing in the market of up to $[x] if necessary.”

United Nations:

“We call on the UN to establish an effective mechanism to monitor the impact of the crisis on the poorest and most vulnerable. We have also asked the IMF to bring forward, by the Spring Meetings, proposals to use the proceeds of agreed gold sales to support low income countries.”

International Financial Institution voting rights and representation:

“We commit to implementing the package of World Bank voice reforms agreed in October 2008. We call on the World Bank to make concrete recommendations by the Annual Meetings on shareholding, voting, voice, and internal governance, taking account of the development mandate of the Bank, and guided by the principles of shared and common responsibility. These reforms should be completed by the Spring Meetings in 2010.

Although this doesn’t pertain directly to the plight of the worlds’ poor, you might be gratified to know that the G20 is tackling the issue of executive pay and bonuses:

“To endorse the [financial stability forum's] common principles on pay and compensation in financial institutions. These ensure compensation structures reward actual performance, support sustainable growth, and avoid excessive risk-taking. We have asked our supervisors to implement these principles.”

It is too early to give a full critique of the communiqué since the G20 leaders haven’t actually met yet and formally agreed to these points and hammered out actual figures, we can point to a few highlights and trouble spots:

Supporting the Millennium Development Goals, working to achieve Official Development Assistance pledges including commitments on Aid for Trade, allocating for social protection programs and investing in food security are good signs but much more needs to be done to achieve the long-term goals.

There will be significant resource inflows to the IMF and the Regional Development Banks which is welcome, but there is little to know discussion about restructuring International Financial Institution financing mechanisms to include more favorable conditions.

In advance of the Thursday’s summit, the UN Millennium Campaign issued a press release and policy document outlining recommendations for the G20 leaders. We’ll keep you informed on how they fare after the meeting.

G20 leaders must:

• Provide additional resources for poor countries deal with the crisis but caution not to let the solution become the problem; resources provided must come without harmful conditionalities and/or increase indebtedness

• Restructured international financial institutions must be more representative with poor countries having a greater voice.

• The economic crisis should not be used as an excuse for rich countries to renege on their aid commitments to poor countries, which are already bearing the brunt of the financial crisis. OECD member countries of the G20 must reaffirm their previous commitments to allocate 0.7% of their GNI for development assistance, establish transparent, time-bound calendars for the disbursement of funds.

• G20 leaders are being reminded of their pledge for a moratorium on protectionism made on 15 November 2008 and are being called upon to develop structures for effective monitoring and supervision to prevent further protectionism.

(Photo: Flickr)

 

BSG and the MDGs at the UN

Anita Sharma March 19, 2009 - 7:16 am

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It’s not often that the United Nations serves host to celebrities, sci-fi fans, and musicians, but that was the scene last night in New York when two events pushed the boundaries in an effort to raise the profile of the UN and award humanitarian achievements. An eclectic assortment of people gathered in the General Assembly hall to listen to speeches and musical tributes at the inaugural MDG Awards launch event.

Among the highlights:

Macy Gray got the crowd moving to her hit, “I Try,” Simply Red’s Mick Hucknall had the crowd clapping to an a cappella number, and Somalia rapper K’naan gained new fans with his hybrid music style that blends America and African musical traditions. Other performances included Toto founder, keyboardist, singer and main composer David singing the hit, “Africa,” and remarks by Armand Assante, Sol Guy and Jonathan Granoff.

Organized by the NGO, Humanitad, and hosted by Ambassador Francis Lorenzo, Deputy Permanent Representative to the UN from the Dominican Republic, the awards honored Archbishop Emeritus Desmond Tutu and Dr. Kevin Cahill for their tireless commitment to achieving the Millennium Development Goals (MDGs), a global effort to end extreme poverty and hunger, provide access to education, health care, and clean water, promote gender equality, and protect the environment. The awardees spoke passionately about their efforts to create a more peaceful and equitable world, with Archbishop Tutu saying that the all of huamanity should act like one big family, caring for those who need it most.

You can watch the program here:
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http://www.mdgawards.org/webcast.html

As Mark notes, across the hall, science fiction came to the United Nations in the form of Battleship Galatica. The slightly surreal panel discussion sought to highlight the relevance of the UN even in futuristic outer-space. The panel, organized through the UN’S new Creative Community Outreach Initiative, was moderated by Whoopi Goldberg, and included actors Mary McDonnell, Edward James Olmos, and Battlestar Galactica creators and executive producers Ronald Moore and David Eick. The UN was represented by Radhika Coomaraswamy, Special Representative of the Secretary-General for Children and Armed Conflict; Craig Mokhiber, Deputy Director, New York Office, Office of the High Commissioner for Human Rights; Robert Orr, Assistant Secretary-General for Policy Planning, Executive Office of the Secretary-General; and Famatta Rose Osode, Minister and Deputy Permanent Representative, Permanent Mission of Liberia to the United Nations.

 

More Bad News

Anita Sharma March 9, 2009 - 4:17 pm

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More bad news on the state of the global economy. According to a World Bank study prepared for next Saturday’s meeting of the Group of 20 finance ministers and central bank governors in London:

The global economy is likely to shrink this year for the first time since World War Two, with growth at least 5 percentage points below potential. World Bank forecasts show that global industrial production by the middle of 2009 could be as much as 15 percent lower than levels in 2008. World trade is on track in 2009 to record its largest decline in 80 years, with the sharpest losses in East Asia.

This is especially troubling for those least responsible for the crisis -- the extreme poor. The study goes on to warn of financing shortfalls of anywhere between $270-700 billion as commodity prices continue to decline, global trade collapses, trade finance and private capital flows dry up and remittances drop. The poorest countries lack the social safety nets to deal with the crisis and are becoming increasingly dependent on overseas development assistance.
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Unfortunately even before the financial crisis hit, rich countries were falling short of their commitments by about $39 billion a year. At least in the U.S., the President’s budget (PDF) goes against the tide. It designated $51.7 billion for the State Department and other International Affairs Programs, a $4.5 billion increase from fiscal year 2009.

As the situation continues to spiral download, some people are looking to the April 2 G-20 summit in London to provide more a pro-poor response. Today the UK government is hosting a major conference with Bob Geldof and Lord Stern, author of the eponymous review on climate change, among others, to look at the future of global development and the impacts of the crisis on achieving the Millennium Development Goals (MDGs). Its Department for International Development (DfID) is putting forth a proposal to lesson the impact of the global economic downturn on poor countries, while still reducing carbon emissions.

Plans include:

  • A new "rapid response" fund to provide a safety net for the world's most vulnerable people. The multibillion-pound fund would help meet basic needs including feeding children, medical care for pregnant women and "food for work" projects.
  • A "global poverty alert" system would be set up to link international organizations, aid agencies and research groups into a single network to provide instant updates on the impact of the economic crisis on the poor.
  • Action to modernize the World Bank to speed up payments and increase the amounts of cash it releases.

The economic crisis, in particular the impacts on the poorest and must vulnerable, will be on the agenda when the UN Secretary-general Ban Ki-Moon comes to Washington tomorrow.

 

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