Monday, November 20, 2006

G20 hindsight

This weekend’s G20 summit of world economic leaders in Melbourne was disrupted by violent protests on Saturday. A 3,000 strong march walked to the Grand Hyatt hotel in central Melbourne where they were met by a strong police cordon. About 100 of the demonstrators dressed in boiler suits and masks attempted to scale the police barricade and began hurling bins and other missiles. Eventually they were repelled by a line of baton-wielding police. There were 11 arrests and ten police officers were injured.

The predicted violence detracted attention both away from the objectives of the protesters and also of the meeting itself. Australia's AID/WATCH group said a 2006 review of global aid found that of $30 billion in new aid since the war on terror began, $10 billion had gone to Iraq and Afghanistan. The group released a statement that said "Aid is now centred on good governance, law and order and military assistance, and geared to Australian strategic interests rather than to regional development priorities." High profile opponents of the summit included Pearl Jam and Bono who led 14,000 fans at a free "Make Poverty History” Concert at the Myer Music Bowl not far from the economic forum venue. Tim Costello, co-chairman of the Make Poverty History coalition, told the crowd that the war on terror was soaking up too much global aid. “We cannot win the war on terror unless we win the war on poverty” he said.

That view may or may not have been shared by his brother, Australian federal Treasurer Peter Costello. But he couldn't be as forthright as his brother. Peter was the G20 economic meeting’s chair and co-host alongside Reserve Bank governor Glenn Stevens. Costello (Peter) condemned the violence as an attempt to trash Australia's reputation, saying: "We won't stand for that." However he hailed the meeting itself as a success as it saw "wide-ranging discussions on substantive issues in the global economy under the overarching issues of building and sustaining prosperity.” The meeting theme was building and sustaining prosperity. The key agenda issues were global energy, minerals markets, and reform of both the International Monetary Fund and the World Bank and population growth in developing countries.

The G20 is a forum for finance ministers and central bank governors. The Group of 20 was set up in 1999 as an informal gathering of the world's major economies. Its members represent two-thirds of the planet’s population and 85 per cent of global economic growth. The G20 was set up to prevent a repeat of the world financial crisis which swept through Asia, Russia, and Latin America in 1997-98. According to its own website, it is an “informal forum which promotes an open and constructive dialogue between finance ministers and central bank governors from systemically significant industrial and emerging market economies.” Its members include the G8 nations - the US, Germany, Japan, France, Italy, Britain, Canada and Russia - as well as the European Union, Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Saudi Arabia, South Africa, South Korea and Turkey. Senior IMF and World Bank officials, including Paul Wolfowitz, also attended the meeting.

The communiquĂ© released at the end of the meeting was optimistic that the global economic outlook remained positive. It reaffirmed the belief that growth depended on open trade, and called for an early resumption of the stalled Doha Round to secure further growth and alleviate poverty. The G20 reaffirmed its 2004 Accord for Sustained Growth to direct domestic policies towards investment and enhancing competitiveness. It acknowledged peak oil (under the guise of “long-term resource security) and climate change as key global challenges. The meeting also called for reform of the two Bretton-Woods institutions, the IMF and the World Bank. The group advocated modernisation of the European-based IMF and collaboration between the two institutions.

The G20 also acknowledged that support for international aid must increase. All G20 members pledged support for the 2005 Paris Declaration on Aid Effectiveness (PDAE). The PDAE was signed by a hundred ministers last year and committed their countries to increase harmonisation and management of aid. It called for a practical, action-orientated roadmap to improve the quality of aid and its impact on development and it has targets and indicators of effectiveness backed up by a strong mechanism of accountability. The OECD ranked Australia 15 out of 22 donor nations with a pitiful 0.28% of gross national income (GNI) in international aid compared to the average of 0.42%. Australia has a long way to go to the target of 0.7%.

The annual G20 meeting has been a continual target for anti-globalisation protests since the first meeting in Berlin in 1999. This year, the protest was co-ordinated by a group called G20 convergence whose peaceful goal was to challenge policies that “push corporate-led globalisation, neoliberalism and capitalism onto the world's people and ecosystems, and to present alternatives”. South Africa faces the challenge to keep the peace next year. The country’s Finance Minister Trevor Manuel will chair the meeting near Cape Town. Manuel said he would use South Africa’s presidency of the G20 to work with other African countries to see how aid can be more effectively implemented.

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