Will the G20 deliver for the world’s poor?
With over 8 million children dying each year from preventable causes, a global financial transaction tax could be the solution
To be in South Korea as part of its hosting of the G20 summit which will be held on 11 and 12 November is to witness a piece of history.
In the lifetime of South Korea’s leaders, and in a triumph of development, the country has gone from having a GDP per capita lower than much of sub-Saharan Africa to being one of the world’s largest economies, and is now a larger aid donor than some European countries. It didn’t get here by following the “guidance” of the international financial institutions. Instead, South Korean growth came from redistributing wealth, managing market engagement and making massive public investment in human capital.
Indeed, the success of east Asia, and the failure of the Washington Consensus, prompted me to ask the G20 representatives attending the recent High-Level Development Conference in South Korea earlier this month whether we should swap the Washington consensus for a Seoul consensus. The eclipsing of the G7/G8 by the G20 marks a change in the global political economy. It changes the culture of global meetings too. I’m pretty sure, for example, that this is the first time a host government of such a meeting has had an official pop song.
But for those who had hoped that the expansion of the old colonial G8 into the more inclusive G20 would bring a greater focus on poverty, there will be some disappointment. The G20 do not want to discuss aid or debt for example, and it was a struggle to even get development on the agenda.
Even with development now an official topic of discussion, I had one (western) government representative at the meetings confess: “I don’t know much about development, I’m an economist.” And though the chairman of the African Union is invited as an observer, the AU is still not a permanent, equal member of the forum. “There has to be a balance between efficiency and inclusiveness,” goes the mantra. Those who complained about the old G8 but made it into the G20 go along with this. All reminiscent of the natural human tendency that when you’re waiting for a bus in the rain, you shout at the buses that keep driving past; but when you get into the bus, you join in with the others shouting to the driver that the bus is too full to keep stopping at all the stops to let rain-drenched passengers in.
The civil society groups attending the meetings of Civil G20 have taken a different approach, with more than 100 participants from across the world. It is a wonderfully diverse group: in my first five minutes at a meeting I met an obstetrician, a teacher, a lawyer and a priest. But it is a hard group to organise. At times we got a little sidetracked. Discussing a civil society submission paper to the G20, someone asked another participant: “Are you upset because of the comma?”
Financial transaction tax to help fight poverty
For those focused on global poverty, the most important issue being discussed at the G20 is the idea of an FTT, a financial transaction tax to help raise the money needed to fight poverty. It sounds wonkish, but at a rate of just 0.05%, and applied globally, this could raise between £256bn and £446bn annually, roughly four to seven times the current level of overseas aid.
Among the G20 representatives, opinion is divided. A senior official from a major economy told a group of community activists from Asia, Latin America and Africa that while the idea of taxing irresponsible traders may seem attractive, in the end the costs would fall upon “ordinary people like me and you”. In the middle ground was the government representative who acknowledged that the FTT was a good idea but declared that it would be “hard to do”. (Can the world’s “premier economic forum” not do hard things?)
But a representative from another G20 country urged me: “Please keep pushing on the financial transaction tax. We need you to do so. It’s like with the landmines treaty. Governments said it couldn’t be done. You in the NGOs kept pushing. And it happened. This can happen too. It will happen – if you keep pushing us.”
Civil society advocacy stands little chance when all governments are opposed to us – but when an issue is in contention, like this one, we can be the force that makes the difference, that pushes an issue beyond the tipping point. The world is short of more than 3.5 million health workers, and an FTT could help pay for them. For some of the more than 8 million children who die every year from preventable causes, that could mean life instead of death. An FTT won’t be agreed this month or next month, but if we can keep it on the agenda, as the French start to organise for their chairing of the G20 in 2011, we can help to ensure that it does happen, and that we make another piece of history.
• Ben Phillips is Save The Children’s Asia strategy director. Currently based in Bangkok, he has previously lived in India, South Africa, Japan, the Netherlands and the US. He is the author of Learning to Survive: How Education for All could prevent millions of deaths from HIV/Aids, and Must Try Harder: a school report on donors’ aid for education. He tweets at http://twitter.com/atbenphillips