Catarina's World

Now the permanent stewards of the world economy, will G20 keep the momentum going by improving the global economic regime that has been crafted over the years?

Will G20 leaders from developing countries manage to make their colleagues from the West realize that in order for the world economy to work properly, there need to be advantages for the poor as well?

G20 has come a long way – the new kid on the block in 2004 is now the leader of the pack. It started as an alliance to bring democracy to world trade at the WTO talks in Cancun and has become the main permanent body in the world responsible for economic co-operation, meeting annually at the leaders level

Hopefully G20 will not forget the importance of world trade. Will G20 again, manage to have an impact on world trade? The WTO trade talks in Cancun, as you may remember, collapsed as a result of G20 demanding fairer trade. If so, what strategies will be deployed to negotiate a trade deal that benefits not only multinationals in the North but also the poor in the South? How will G20 make the world focus on making international trade rules fairer? What steps will be taken to decrease rich countries protectionist policies?

G20 is now the key player on the global scene which, at least in theory, enables it to provide the conditions for developing countries to embark on peace, prosperity and pluralism. We have come a long way from G8 to G20 and it will go further. The developing world, representing four-fifth of humanity, is now much better represented on the global scene.

Poverty does not cause terrorism – but it causes frustration and resentment that help foster the kind of atmosphere in which extremist groups can thrive. A much better, and cheaper, way of defeating extremists than war on terrorism would be to give developing countries the possibility to trade out of poverty.

Trade has been shown to be the indispensable means for poverty reduction and growth. There also seems to be a close correlation between a country engaging in open trade and ultimately embracing democracy. With 40 percent of humanity living on less than $2 a day and approximately a billion living under military style dictatorships often engaged in civil war and genocide, we should care a lot. The most striking example of the benefits of a trade oriented economy versus a closed, self-sufficient one is the two Koreas. At the end of the Korean war in 1952 they were both extremely poor. And how North and South Korea have developed since then under their different systems is well known.

What will G20 do to craft a fairer world trade order? Most Westerners would like a fair global economic system. If, for instance, the issue of access to life-saving Aids drugs were put to a vote, the overwhelming majority would not support the position of Western pharmaceutical companies. The power of special interests is high – but will it still be if trade moves up the political agenda in G20? And once that has happened, will people in the West agree to anything that asks the poorest people in the world – the billions living on less than $2 a day – to pay the price? Will G20 leaders from developing countries manage to make their colleagues from the West realize that in order for the world economy to work properly, there need to be advantages for the poor as well? That’s the big question isn’t it ,and my hope is that they will succeed so that we can finally unlock the benefits of the world economy for all.

(Photo:www.flickr.com/photos/londonsummit/href=”http://www.flickr.com/photos/londonsummit)

How do you map health clinics or water delivery sources in a slum? Humanitarian agencies will be seeking answers to these and other questions as vulnerable populations settle in a sea of shacks on the outskirts of cities and towns across the world in the next few years.

So you thought you were badly hit by the recent downturn? Not compared to these people.

And to make the situation worse the global economic downturn could push as many as 21 million people in the Asia-Pacific region and at least 14 million people in Latin America into extreme poverty, according to the UN and World Bank. Many of them will, needless to say, seek their fortune in cities.

There hence is a huge need for programs to reduce vulnerability in urban settings. According to the World Bank’ Development Report 2010 half the world’s people now live in cities, a share that will rise to 70 percent by 2050. Of urban population growth (5 million new residents a month), 95 percent will be in the developing world, with small cities growing fastest.

So you thought you were badly hit by the recent downturn? Nothing compared to these people, I’m afraid. So what are we going to do to give them a decent life? Aid to developing countries from richer nations will fail to hit aid targets set five years ago at the Gleneagles summit, a study suggests. Total aid will be USD107 billion in 2010 against 2005 pledges of USD128 billion, the OECD has forecast. It also said that of the USD21 billion gap between promises and likely actual aid, the large majority – USD17 billion – was a result of the donors not hitting their targets, while just USD4 billion was caused by the global financial crisis reducing their national income. In other words the global crisis have hit the worlds poorest and most vulnerable people massively. And you thought you were badly hit by the recent downturn? Nothing compared to these people, I’m afraid.

Also we mustn’t forget that countries with a lot of poverty easily gets trapped in crime or worse, become failed states. And I don’t need to tell you how easily failed states can follow in the steps of Afghanistan and Somalia, do I? So it’s in the interest of all of us to help eradicate poverty in the developing world. But what can we do that will work and not turn out to be just another pledge never met? Now after the recent global crisis it is actually more urgent than ever.

Maybe a group of nearly 50 organizations came up with the answer? They said in a letter to political leaders circulated this month that a global tax on banks’ financial transactions should be introduced to fight poverty, protect public services and tackle climate change. The campaign for a “Robin Hood Tax” is backed by charities such as Oxfam, as well as aid agencies, unions, green groups, financiers and economists. Presumably the logic is that since they caused the global crisis that has pushed millions and millions of people into extreme poverty they have an obligation to help give the poorest a decent life?

Do you think a Robin Hood Tax is the way forward? Or what other solutions are there? As it is billions of people are leading a life you and I have seen but cannot really comprehend what it would be like. So now let’s move beyond self interest and come up with innovative solutions that work!

Photo: Flickr – Maciej Dakowicz