G20-BRICS Update #17 - G20 Growthcery
G20-BRICS Update #17 - G20 Growthcery
Highlights of the Russian G20 Summit
Introduction by Nancy Alexander, Heinrich Boell Foundation-North America
At the September 2013 G20 Summit in St. Petersburg, Leaders faced conflicts relating to the Syrian crisis and decelerating global growth and, particularly, the role of the monetary policies of advanced countries, especially the U.S., in destabilizing developing country economies.
Meanwhile, having reached its five year anniversary, the G20 Summit released a vision statement congratulating itself for its achievements as the premier forum on international cooperation, but failing to acknowledge its deficits: a) the susceptibility of the global economy to another financial crisis; b) the interdependence of crises relating to finance, climate, and society; and c) the near-exclusion of non-member countries in designing policies that deeply affect their future (See box, “St. Petersburg Accountability Report on G20 Development Commitments, p. __.)
Ironically, while crafting the vision statement calling for deeper engagement with outside groups, including civil society, Leaders ignored the Russian government’s repression of domestic civil society and shunned the civil society presence at the Summit. Only business and labor were invited to the Leaders’ meeting with “social partners”; civil society was excluded.
It is no surprise that the Summit’s “outcome documents” are more reflective of the recommendations of the transnational corporations (TNCs) in the Business 20 than those of the Civil 20 (C20) or even the Labor 20 (L20). On the eve of the Summit, civil society’s Counter-Summit delivered a strong Final Declaration denouncing the capture of governments by TNCs which causes systematic violations of the rights of people and nature.
Arguably, the Summit’s main breakthrough relates to its endorsement of an Action Plan to change tax rules in order to stop multinational corporations (MNCs) from shifting their profits to low- or no-tax jurisdictions and, instead, require them to pay taxes to the countries where they do business. Yet, pressure on the G20 is needed to strengthen and implement these and other actions, as the newly-elected Australian Prime Minister Tony Abbott takes over the G20 Presidency on December 1, 2013. Upon taking office, Abbott’s opening salvos included throwing Indonesian refugees out of the country, cutting the foreign aid budget, moving the aid agency into the foreign office, and vowing to abolish the country’s Emission Trading System.
In “Investment in the Future: Preliminary results of Russia’s G20 Presidency,” O. Buklemishev (Associate professor at the Economics Department of Moscow State University and member of the Expert Council for Russian G20 Presidency) provides an in-depth perspective of not only of Summit outcomes, but also the economic challenges and tensions with which the G20 is wrestling.
He reminds us that, since the 2012 Mexican Summit, the economic seesaw has tipped in favor of many developed countries and against many developing countries – some of which are experiencing signs of the onset of recession. Moreover, according to Buklemishev, the U.S. and others are making monetary policy in a “go it alone” mode, flaunting the G20 pledges to work in a collaborative fashion. He underscores the breathtaking cost of recent monetary policies for developing countries where the value of national currencies relative to the U.S. dollar has been plunging.
Finally, Buklemishev describes the future G20 policy agenda and ways Russia will continue to provide leadership on this agenda as it assumes the G8 Presidency in January 2014.
In “Building on mixed success – from St Petersburg 2013 to Brisbane 2014,” Nancy Waites, (Head of Policy Research & Government Relations, World Vision Australia) emphasizes some misfortunes of the Russian Summit relating to civil society representation and exclusion from dialogues with officials. Still, Waites emphasizes the G20’s momentum on issues championed by civil society: combating tax avoidance; tackling inequality through inclusive growth; and creating jobs, particularly for the most vulnerable.
Waites comments on the St Petersburg Development Outlook, including its five core priorities: food security, financial inclusion and remittances, infrastructure, human resource development, and domestic resource mobilization.
Finally, she notes that Australian national elections on 7 September made it impossible for the Prime Minister to attend the Summit. The Australian Foreign Minister attended, as did the Chair of the new Civil 20 Steering Committee, Tim Costello, CEO of World Vision.
In “The G20 St. Petersburg Summit – Bubbles, Casinos and Inactivity,” Sameer Dossani, Advocacy Coordinator of ActionAid International’s Reshaping Global Power Program, highlights the fact that, while the G20 is fixated on growth, it is relatively ineffectual in dealing with root causes of the financial crisis (e.g., “too big to fail” institutions; monetary dilemmas; and corporate tax dodging). With regard to monetary dilemmas, Dossani notes that currency markets in South Africa, Brazil, India, Turkey and Indonesia seem be stabilizing after losing as much as 25% of their value against the US dollar over the past year. In an integrated global market, falling currency values mean rising prices; in some countries, food, fuel and other essential items are becoming even more expensive.
On the bright side, Dossani says that the G20’s tax reforms offer a “once-in-a-lifetime” opportunity to tackle tax havens and transfer pricing schemes that are kept in place by a complex network of treaties backed up by armies of lawyers.
In “Reflections from the 2013 Russian G20 Summit,” Michael Switow of the Global Council of the Global Call to Action Against Poverty (GCAP) reviews highlights of the G20 Summit as they relate to: international development, remittances, infrastructure, gender, and tax avoidance. He also recounts how civil society got its messages across to a media fixated on Syria.