Now the dust has settled, we’ve caught up on lost sleep, and recovered from that slight hint of Stockholm Syndrome created by the collective hysteria of a summit, it’s time to stand back and think about what happens next. As part of that exercise, here are the forward-looking processes that the G20 put in place to review, monitor, propose further steps etc. Paragraphs are taken from the G20 Leaders’ Statement, with my comments in italics:
On Tax Havens:
‘We have asked the FSB [Financial Stability Board] and the IMF to monitor progress, working with the Financial Action Taskforce and other relevant bodies, and to provide a report to the next meeting of our Finance Ministers in Scotland in November.’ [para 16]
And buried in the annex on ‘strengthening the financial system’ is the para ‘We are committed to developing proposals, by end 2009, to make it easier for developing countries to secure the benefits of a new cooperative tax environment.’
Tax campaigners will probably need to develop channels of communication and advocacy with the new FSB, an enlarged, strengthened version of the Financial Stability Forum. The review mentioned in the annex will be essential to make sure that whatever emerges can actually be used to stem the haemorrhage of revenue from developing countries.
On the IMF:
‘We commit to implementing the World Bank reforms agreed in October 2008. We look forward to further recommendations, at the next meetings, on voice and representation reforms on an accelerated timescale, to be agreed by the 2010 Spring Meetings.’ [20]
‘Building on the current reviews of the IMF and World Bank we asked the Chairman [Gordon Brown], working with the G20 Finance Ministers, to consult widely in an inclusive process and report back to the next meeting with proposals for further reforms to improve the responsiveness and adaptability of the IFIs.’ [20]
With the IMF emerging hugely strengthened from the summit, the issue of reforming both its governance and its policies is going to become a major focus of attention over the next few years. Gordon Brown’s review could be an important part of that process. The IMF’s Spring meetings are in Washington DC on 25-26 April, so there will be an immediate opportunity to generate further momentum around the reform process.
‘In addition to reforming our international financial institutions for the new challenges of globalisation we agreed on the desirability of a new global consensus on the key values and principles that will promote sustainable economic activity. We support discussion on such a charter for sustainable economic activity with a view to further discussion at our next meeting. We take note of the work started in other fora in this regard and look forward to further discussion of this charter for sustainable economic activity.’ [21]
This cryptic paragraph could be something or nothing – perhaps it marks the start of drawing up a ‘charter’ to replace the Washington Consensus, or perhaps it’s just a bit of communiqué padding that leads nowhere. We need to find out more about what lies behind this bit of text.
On Aid/Financing for Development
‘We have committed… that additional resources from agreed sales of IMF gold will be used, together with surplus income, to provide $6 billion additional concessional and flexible finance for the poorest countries over the next 2 to 3 years. We call on the IMF to come forward with concrete proposals at the Spring Meetings;
We have agreed to review the flexibility of the Debt Sustainability Framework and call on the IMF and World Bank to report to the IMFC and Development Committee at the Annual Meetings; and
We call on the UN, working with other global institutions, to establish an effective mechanism to monitor the impact of the crisis on the poorest and most vulnerable.’ [25]
Busy times ahead for anyone working on the IMF and debt relief. It will be interesting to see what the UN makes of the invitation to take the lead in monitoring the impact of the crisis. Potentially it could be a good place to pull together all the various institutions doing impact monitoring (World Bank, DFID, NGOs like Oxfam and ActionAid, think tanks like ODI and IDS) to build a really powerful narrative as the crisis develops and strengthen arguments for help for the poorest people and countries.
On Jobs:
‘We will support employment by stimulating growth, investing in education and training, and through active labour market policies, focusing on the most vulnerable. We call upon the ILO, working with other relevant organisations, to assess the actions taken and those required for the future.’ [26]
A clear mandate to look at the labour impact of responses to the crisis, and for the ILO to lead it. Shame they didn’t also include the ILO’s plea for a Green New Deal to make sure that fiscal stimuli also move rich economies onto a low carbon pathway.
And finally, on the G20 process itself, since it looks like it’s here to stay with a further summit by the end of the year [29], there are at least two issues to watch:
African representation: The G20 may be an improvement on the G8, but there are still 172 countries left outside, and the issue of their representation, especially of Africa (which currently only has one G20 member – South Africa), is vital. I was told by the African delegation that the four African leaders at the summit (3 of them at the invitation of Gordon Brown) were assured that Africa would be properly represented in future. Need to ensure that is not forgotten.
UN: The virtual exclusion of the UN from the G20 process is outrageous. There will be an opportunity to address this at the UN Conference on the Global Economic and Financial Crisis and its Impact on Development, from 1-3 June in New York, where the report of Joseph Stiglitz’ Commission (details here) will provide a real opportunity to assess the extent to which the G20 has really risen to the challenges presented by the crisis.