G20 Update #6

What this issue of the newsletter offers you

Introduction by Nancy Alexander

Historically, Summit agendas have a way of being hijacked by current events and the 2011 Summits will be no exception. On May 26-27, the G8 Summit can be expected to address threats in the Middle East, especially Libya; in the Eurozone (where sovereign debt ratings for Spain and Portugal have been downgraded), and in Japan. Some G20 Leaders want the G8 to die a quiet death; they perceive G8 Leaders “pre-cooking” outcomes for their Summit, which is not until November. Meanwhile, as events unfold, the G8 and G20 Ministers and working groups continue to work in parallel. (See a calendar of known meetings here.) Even before these calamitous events, the G20’s efforts to boost economic recovery and rebalancing were proving ineffectual. The IMF’s Managing Director Strauss-Kahn warned that, “ultimately, we must extricate ourselves from the ruinous cycle of privatized gains and socialized losses.” (See: The Triple Comeback - The Impact of the Financial Crisis on Global Economic Governance, Dominique Strauss-Kahn) In an uncharacteristic slam against its major shareholders, an IMF staff report warns that efforts by the US and Europe to rescue the global economy may be hurting it.

In her article – “The US: Still CEO of the Free World?” Nancy Alexander (Heinrich Boell Foundation) draws from a Wikileaks cable to describe the U.S. sherpa’s discussions with his European counterparts and to caution against dismissing the G20 as a sideshow of the political glitterati. Instead, the G20 is a prism to view alliance-building among powerful countries that are shaking up the international financial institutions and establishing new rules for global governance. Amelie Canonne, President of ATTAC-France issues a call to action, “French Mobilizations on the G20,”which articulates this view – namely that the global financial system is not on a road to recovery. She states that the outcome of the February G20 Finance Ministers meeting is unacceptable and that “We need movements to unify their forces in calling for the kind of regime change that will democratize global governance and act on the premise that – without social and environmental justice – our future is at risk.” Alliance-building is essential in a body as diverse as the G20. A document in the “Must Read” column, “Challenges and Opportunities for the French Presidency: The G20—2011 and Beyond, ”describes the staggering difficulties of the G20 in reaching a common diagnosis of global financial problems that might allow the body to move forward with solutions.In their article, “French Efforts to Rebalance the Global Financial System and Regulate Commodities,” Graciela Rodriguez and Karen Lang of International Gender and Trade Network (IGTN) and Our World Is Not for Sale (OWINS)critique proposals for economic rebalancing and regulation of commodity prices, delve into the alliances between food exporting vs food importing states in the G20, and underscore the need for global leaders to promote “food sovereignty.” The “Must Read” section links to a leaked document on price volatility in food markets written by nine agencies at the direction of the G20. In describing this document, we highlight the implications of the G20 providing mandates to whole groups of international organizations which build consensus without the knowledge or input of civil society. Lack of transparency might have been a factor in the December cyber attack on some 150 computers in the French Finance Ministry in an attempt to capture information on the G20. There are bright spots on the horizon. The Europeans are moving closer to the adoption of a financial transactions tax (FTT), even though the US Treasury is working with its allies to prevent adoption of the tax in the G20. Another bright spot is described by Tom Cardamone, Managing Director of Global Financial Integrity in his article “G20 Countries Tackle Corruption.”Ironically, Tom’s article mentions the corruption of Teodoro Obiang, the son of the notorious Teodoro Obiang Nguema Mbasogo,, dictator of Equatorial Guinea who, as President of the African Union, will be a guest at the next G20 Summit. Obiang is featured in the box “New Faces at the G20,”which also includes a link to the just-released list of names of the G20’s High Level Working Group on Infrastructure Financing and Safeguards. One of the “Must Read” items links to proposals of the World Economic Forum for “redesign” of the global architecture, particularly through public-private partnerships (PPPs). Views of PPPs are increasingly shaped by the perception that, increasingly, the private and public sectors are the senior and junior partners, respectively. As the senior partner, the private sector often captures the state and its regulatory apparatus. Indeed, to one extent or another, state capture is a thread running through a succession of highly improbable or unimaginable events (so-called “black swans”), such as the US-triggered global financial crisis, the Gulf oil spill, and the nuclear meltdowns in Japan. Alarmed that state capture was not only preventing the regulation of financial markets, but also undercutting democracy, European elected officials have launched a financial watchdog group, which is modeled to some extent on Americans for Financial Reform. After the Gulf oil spill, the G20’s Energy Experts Group began work on “global marine environment protection” and, now, it is likely to begin work on nuclear safety. The Group awaits the outcomes of a Clean Energy Ministerial on April 6-7 in the UAE and one can hope that the ministerial will focus resolutely on renewable energy alternatives that do not pose a threat to the human race and the ecosystem.