The G20: Balancing the books on the backs of the most vulnerable?
Next week leaders of the world’s 20 largest economies gather in Seoul.
The focus will be on the state of the global economy, securing long-term recovery from the economic crisis, development, trade and climate change.
Within the discussions about development and a durable crisis recovery, growth seems set to take centre stage. According to Baroness Vadera (adviser to the Korean G20 Presidency) the Korean government have decided to focus on economic issues such as growth, domestic resources, and aid-exit strategies, to remind people that ‘aid is about investment, not charity.’
But G20 leaders would do well to recognise that they have a responsibility far greater than producing an economic roadmap. Governing 90% of the world’s financial resources, these leaders are trustees for future generations. They have the power to bring about transformative and equitable change.
In 2009, these actors committed to use that power to secure an equitable recovery from the economic crisis. However, as a new Save the Children briefing serves to demonstrate, efforts to ensure equitable recovery have been piecemeal. Aid has filled only 13% of the crisis-induced fiscal hole in low income countries (LICs). Meanwhile International Financial Institutions’ (IFI) lending restrictions increasingly limit LIC’s potential to safeguard public services.
If G20 leaders are serious about protecting the poorest and most vulnerable from bearing the brunt of this crisis, four outcomes are essential
- a commitment to speed up disbursement of the 2009 aid commitments
- donors meet the $13 billion shortfall from their 2005 Gleneagles commitments to Africa. Innovative financing may be important is one alternative means of raising some of these funds
- G20 members agree to use their influence on the International Monetary Fund (IMF) board to restrict loan conditions and ensure debt sustainability. The IMF should be pressed to strengthen existing poverty impact analysis and balance fiscal and social stability in its lending decisions
- G20 countries should support efforts in low income countries to develop and implement nationally owned social protection strategies. Donors should commit to long-term recurrent funding to enable recipient governments to take social protection programmes to scale.
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