Adhemar Mineiro, guest blogger, part of our 2011 Spotlight G20 Series
The meeting in the beginning of November will be somewhat of a new experience for Brazilian partners in the group. In all previous meetings Brazil was represented by President Lula da Silva and Foreign Minister Celso Amorim, who both had not only experience and inclination for the discussion of international issues, but also high profiles and proven leadership capacity in this kind of meeting. In the next meeting Brazil will be represented by President Dilma Rousseff and Foreign Minister Antonio Patriota, two newcomers with low profiles in general.
On other side, the international economic crisis remains the main problem on the agenda: the G20 as a group has a quite insurmountable problem. Besides its old problem of scarce or nonexistent legitimacy stemming from the idea that a small group of countries cannot represent the whole world, the G20 now faces a new issue. After its three year existence, and despite the use of available resources and political will, the group was unable to overcome the financial and economic crisis and find a new development path. In other words, it is not only the G20’s legitimacy that is now in question, but its ability as well.
Shortly after the November 2010 G20 meeting in Seoul, the crisis reappeared clearly in its multifaceted form. Speculation in commodity prices is here to stay. In the case of agricultural goods this means the increased the likelihood of hunger and the inflation of food products; In the case of oil and other energy goods this means countries will face difficulties providing fuel and energy to their people. The G20 was unable to dismantle “fiscal heavens” or generate proposals to re-regulate the world financial system – the so called “macro prudential” agenda of the group seems absolutely insufficient to deal with financial speculation and financial flows that have caused, for instance, the EU to be on a “tight spot” at this moment.
Fiscal adjustment seems to be the only proposal of European governments, consolidating the crisis in Europe and dismantling any possibility of social solidarity to deal with the problems in the region. The emphasis in Europe now– as in the 2009 measures proposed and financial resources made available to deal with the crisis at that moment– seems to be the rescue of the private banks and financial corporations. Even the creation of the FTT is now seen by governments not as a tool to get money into development and the provision of social services, but as a new way to finance fiscal adjustment and the save financial corporations. As Europeans focus on adjustment, they contribute to the persistence of the world economic problems, and the crisis continues.
Besides that, the agenda of the G20 seems to focus on some issues only as new possibilities for businesses. Climate change is seen as offering a possibility for new business and financial expansion through funds. The trade discussion is unfortunately focused on the conclusion of the hostile Doha Round, and the possibilities of regulating trade and fair trade remain pushed aside as the discussion in the WTO is restricted to more and more liberalization and does not understand that free trade, like free financial flows, are pillars of the same model in crisis. The so-called development agenda of the G20 is in fact an agenda of possible new business opportunities (a set of financial and construction opportunities) rather than an effective discussion of a new development path. The financial regulation is reduced to a discussion on IFI quotas when what we need is a change in the financial environment, including transforming the existing IFIs.
The G20 discussion seems to be attached to an old agenda that Latin American countries faced for almost 20 years – adjustment and liberalization, and business as usual. People in the region resisted, and the new governments in the region since the beginning of the new century have been seeking alternatives to this old agenda. The good news now is that Argentina and Brazil are willing not only to operate more closely inside the G20, but also with other countries in South America. Perhaps the low profiles of President Dilma and Minister Patriota can help in this way.
Adhemar Mineiro, economist, works at DIEESE (Interunion Department for Statistics and Social Economic Studies) for REBRIP (Brazilian Network for the Integration of Peoples), CUT (one of the Brazilian Trade Union Confederations) and TUCA (Trade Union Confederation of the Americas).
You seem to find a window of opportunity for Brazilian leadership with a new agenda in this context . Hopefully Brazilian clout can reign a couple of other countries from other regions in preparation for the Mexican summit , which otherwise will be a rehash of the crudest neoliberalism and ajustment medicine . If this cleavage were to persist , we might see the G20 turn into a Doha look alike very soon, and few would be very sorry.
My concern is that Brazil seems to be moving with Dilma in the same direction, to some extent, with a fiscal adjustment program in place. Let’s hope she moves fast to her old days, pushing for fiscal stimulus.