Spotlight G-20: Why do NGOs go to G-20 summits?

Christina Weller, guest blogger

Part of the Triple Crisis Spotlight G-20 series.

Los Cabos, Mexico – It certainly feels incongruous, working for an anti-poverty NGO and travelling to exclusive resorts such as Los Cabos in Mexico as part of your job. There are lots of reasons to think it’s not worth it. Should NGOs be lobbying at all? What does the G20 have to do with developing countries? What about the lack of access to decision makers (not to mention the lack of decisions at Summits these days)?

The answers to the questions are obviously not unconnected.

The reasons NGOs should be lobbying is precisely because everything the G20 does has an impact on developing countries and especially on the poorest women and men within them. And it’s not just the development agenda – although attention to the huge persisting obstacles for poor countries in benefiting from globalization is welcome – the most important thing that the G20 could do for poverty eradication is to get its own house in order and get down to business on its core agenda.

First it needs to fulfil its pledge to fix the financial system to support sustainable growth and work for the benefit of the real economy (and real people). Yet financial reforms are too weak to prevent a $3 billion gamble by JP Morgan and yet another bank bail-out in Europe. Resolving sovereign debt problems still relies on fingernail-biting crisis measures and ordinary citizens shouldering the burden. And let’s be clear, when crisis hits G20 countries, it hits the poorest too. After 2008, textile workers in Cambodia had to go back to family farms to survive, when previously they had sent back money to pay for health and education needs, because demand for clothes dropped in G20 markets.

The lack of progress on taxing the financial sector is emblematic of the G20’s lack of will to change and lack of ability to achieve real results. The sector is under-taxed; rectifying this would directly increase its social usefulness – contributing to emptied public sector coffers and helping to finance efforts to combat poverty and climate change. Taxing transactions also has potential to have a regulatory impact – discouraging excessive, short-term speculation and increasing stability.

Even measures to combat food price volatility – an obvious and pressing case for reform – fall far short of what is needed; they don’t distinguish between market operators and legitimate commercial traders and do not regulate publicly insured institutions or “over the counter” transactions strongly enough. These gaps mean measures are ineffective to overcome the impacts of speculation on food prices and hunger on the poorest families for whom food takes up a significant proportion of income.

The lack of progress in tackling the deficit in global governance relating to international monetary coordination also directly impacts poor countries. CAFOD interviewed poor small-business owners in Zambia after the 2008 crisis, who complained that excessive volatility in exchange rates made their planning and long-term profitability difficult. Zambia has its own problems in monetary policy, but the lack of management of the international system certainly does not help.

The development agenda has also delivered too little to date – some rather mixed initiatives on addressing the critical need for infrastructure in low income countries. Yet relatively easy wins, such as making a commitment to assist countries to establish social protection floors that will ensure crises do not result in lost investment in education and health in poor households, have not yet been forthcoming.

There are some fundamental reasons the G20 is not delivering in these areas, and this answers our third question regarding lack of access and lack of decisions at G20 summits. There is no adequate mechanism to ensure that the G20 is held accountable to its objectives and commitments. Whilst financial lobbies are successful in diluting regulatory measures back home and at the G20, the absence of equal and systematic consultation with civil society groups and developing country governments has hampered the adoption and progress of a truly development-friendly agenda.

The G20 needs to measure its success according to its ability to fulfil its commitments and its progress towards real objectives of sustainability, shared wealth and improved well-being, not just meaningless increases in aggregate growth measures.

If the G20 begins to do just some of these things as a result of dialogue with NGOs, the pay offs will be huge. Financial Transaction Taxes alone will raise hundreds of billions per year for poverty eradication efforts, but perhaps more importantly the global economy will begin to be structured more fairly, so that the poorest can not only benefit, but also contribute.

Christina Weller is an economic policy analyst with the Catholic Overseas Development Agency (CAFOD).

The Triple Crisis blog invites your comments. Please share your thoughts below.