G8 in Italy must prove its relevance

Caritas Internationalis and CIDSE say G8 countries meeting in Italy need to roll back years of broken promises if they’re to regain authority on their flagship issue of tackling poverty. Leaders of France, the United States, Britain, Germany, Italy, Canada, Japan, and Russia hold a make-or-break meeting 8-10 July in the Italian town of L’Aquila to prove the annual jamboree is not past its sell-by-date.

The summit comes in a critical year for international development. The global economic crisis threatens gains made in reducing poverty over the last ten years. As many as 100 million more people will remain poor or become poor as a result of the crisis. Negotiations on climate change are not making the progress needed to achieve an adequate deal to be signed in Copenhagen in December. Hopes are not high. G8 countries have backtracked on their aid pledges, particularly Italy and France, citing the crisis as an excuse. However, world military spending surged to a new high of $1.4 trillion in 2008 while $8.7 trillion of state financing was found to shore up banks

Caritas Internationalis Secretary-General Lesley Anne Knight said, “If the G8 is to have any credibility left after this summit, it must make up for the broken promises of the past. This means committing to a firm timetable for achieving its previously agreed aid targets. To be cutting aid budgets whilst pouring billions into a bankrupt banking system is like robbing the poor to feed the rich. The G8 has an opportunity this month to show real leadership in the fight against global poverty. If it fails, it will show itself to be irrelevant.”

CIDSE Secretary-General Bernd Nilles said, "G8 countries have so far failed to commit to the necessary cuts in greenhouse gasses to avoid dangerous climate change. They have also failed to commit to providing developing countries with the support they need to enable them to adapt to the impacts of climate change and to pursue sustainable development paths. They’re fiddling while Rome burns.”

The G8 is one of the few moments where leaders of the richest countries will meet in the run up to Copenhagen and should play a crucial role in unlocking stalled talks and securing a deal. The G8 must commit to a minimum of 40% cuts in greenhouse gas emissions by 2020, based on 1990 levels. They must provide their fair share of financing for adaptation and mitigation in developing countries. Conservative estimates indicate $153bn of additional finance will be needed for mitigation and adaptation in developing countries by 2020.

Read CIDSE - Caritas Internationalis G8 recommendations >>> here.

Civil Society Background Document on the UN Conference on the World Financial and Economic Crisis and its Impact on Development

We are facing a global systemic financial and economic crisis, which originated in the increasing financialization of the global economy, coupled with deregulation, over-reliance on trade liberalization and the use of financial instruments that created systemic risks and asymmetries. These factors have resulted in a financial industry disconnected from the real productive economy and in a severe slow-down in the real economy, with tremendous human and social costs. Before the financial crisis, the world was already suffering from a food crisis, and facing environmental challenges of historic dimensions. With this Conference, the UN as the most comprehensive intergovernmental forum, has a historic opportunity to start a longer-term inclusive process for a fundamental transformation of the economic and financial system and to make social and gender justice and the fulfillment of human and environmental rights the key objectives of all crisis-related measures. As a first step, global fiscal stimulus measures are crucial, both for industrialized countries, economies in transition, and developing countries, to stimulate their economies in a sustainable manner, and implement counter-cyclical policies, without, however, reverting to the same export-led growth model based on unsustainable over-production and over-consumption patterns. However, equally important are concrete commitments for an intergovernmental time-bound process towards long-term structural reforms to prevent future financial bubbles and economic busts. This UN Conference must be the beginning of a process for systemic change, crisis resolution and economic justice between developed and developing countries and economies in transition.

>>> Full text

UN takes the ball on global economic policy

The UN agreement on the financial crisis takes important steps toward a global consensus on response to the crisis, according to CIDSE, an international alliance of 16 Catholic development agencies working together for global justice. Member nations have already agreed the text of a final declaration of the conference, which ends today in New York. The document includes the recognition that the UN should have a role in ensuring in ensuring that the global economic and financial system should work for developing countries.

“Global economic policy should be like the World Cup, with every nation playing – not a tournament for rich countries and their invited guests. With this agreement, the UN took the ball,” said René Grotenhuis, President of CIDSE and Director of Dutch organization Cordaid. “The US ought to be particularly commended for supporting economic justice – anyone at the Bush or Bill Clinton State Department would have been fired for approving this. Agreement for countries to impose capital controls is a total reversal of Clinton and Bush-era policies. And US support for World Bank and IMF hiring according to geographic and gender diversity moves them part of the way from G8-dominated clubs towards accountability to the world,” said Aldo Caliari, Director of the Rethinking Bretton Woods project at Center of Concern, the US member of CIDSE.

Progress includes:
* Trade: Developing countries earn half their GDP from exports, and trade is the main way the financial crisis is hitting them. The document recognizes many countries will need to change trade and investment rules or impose capital account restrictions, to implement crisis recovery measures.
* Debt: Developing countries face more than $3 trillion in debt maturing this year. The agreement includes temporary standstills on debt payments for countries in crisis, and agreement to go beyond existing ad hoc responses to a structured mechanism for sovereign debt settlements.
* Stimulus: The agreement calls on countries with stimulus spending not to impose rules that hurt third countries.
* Continuing mandate: While some countries opposed follow-up to the conference, the UN will have a continuing working group to implement these measures and an expert group to provide “independent technical expertise and analysis” on the subject of the conference.

“This is slow progress for more than 50 million people are expected to lose their jobs, and 100 million newly hungry in the world. But the UN is asserting influence on the global economy, and that’s good news for the majority of people who aren’t represented at the G8 or the World Bank and IMF they control,” said René Grotenhuis.

Voices on the UN financial summit in New York

* Head of South Centre: Most collateral damage in developing world
The United Nations should be the place that “educates the innocent and the victims” on how to deal with the world economic and financial crisis, Martin Khor, Executive Director of South Centre, said at a press conference in the run-up to the UN conference on the impact of the global crisis on developing countries in New York. He said that, having played no role in causing the crisis, the developing countries had suffered the most “collateral damage”, with losses averaging 6% of gross national income as their economic growth was expected to fall from 8.3% in 2007 to 1.6% in 2009.
>>> Full text

* ITUC: Global crisis needs global coordination
As the United Nations kicks off a major three-day Conference in New York, the International Trade Union Confederation (ITUC) is drawing the attention of world leaders to the severe human costs of the deepening slowdown in the global economy. This is most evident in the jobs crisis, with increasing income inequality, rapid increases in unemployment, and growing hunger and poverty in developing countries. Women are bearing a disproportionate share of the hardships brought on by the global crisis.
>>> Full text

* CIDSE: Global crisis requires global reform
According to CIDSE, an international alliance of Catholic development agencies working together for global justice, the worlds’ poor risk being let down once more as no leaders from developed countries are expected to attend. Their constructive engagement in inclusive fora like the UN is needed for structural changes like a Global Economic Council, to address economic issues the way the Security Council addresses security-related ones, and in keeping promises like the development finance agreements made in Doha.
>>> Full text

Finance Ministers must find funds to secure climate deal

The G8 must commit $2bn to help poor countries adapt to a changing climate Oxfam urged ahead of a meeting of Finance Ministers in Lecce, Italy, on 12 and 13 June. The international agency also called for European Finance Ministers meeting in Luxembourg today to back a proposal from European experts for poor countries to receive €100bn ($142bn) a year to help them reduce emissions. Putting money on the table to fund least developing countries' most urgent adaptation needs would be an important first step by rich countries towards delivering on longstanding promises of assistance. At least $50bn per year is needed to assist poor countries deal with the impact of climate change and at least $100bn to help poor countries reduce their emissions.

In 2001, the Least Developed Countries Fund was set-up, and the poorest countries were invited to prepare National Adaptation Plans of Action to address their most urgent adaptation priorities. These plans need $2bn to implement; however, rich countries have committed less than 10% of the money to date. European Finance Ministers, meeting on 9 June, could also address a crucial issue threatening to undermine hopes of a global climate deal by backing a proposal which contains concrete figures on the level of support poor countries need to tackle their emissions. To date rich countries have not said how much public funding they think should be made available.

Rich countries are responsible for two thirds of green house gas emissions currently in the atmosphere but it is the world's poorest people who are being hit first and hardest by the changing climate. In Africa, changes to rainfall are already affecting food production, and rising temperatures are boosting the spread of disease. Antonio Hill, Senior Policy Advisor for Oxfam International said: "Funding to help poor countries adapt to a changing climate has been promised by G8 leaders - but it has largely failed to materialize. These politicians found the determination and $8tr to save the banks. They must now deliver the immediate financing which is needed to help the most vulnerable developing countries adapt to a changing climate."

Bernard Kouchner suggests a tax on foreign exchange transactions

As French Foreign Minister Bernard Kouchner stressed, development aid is a crucial tool to fight the impact of the recent financial turmoil on developing countries but not enough. According to him, innovative development funding is decisive, especially in the areas of education, health and environment. A pilot group in charge of thinking about solidarity contributions in favour of development was established in 2006 following an initiative from France, Brazil, Spain and Norway. The pilot group is a kind of think-tank and gathers 58 countries to which NGOs and international organisations are associated. France is currently chairing the group which gathered on 28 and 29 May in Paris.

Following a suggestion by Bernard Kouchner, a working group has been created to evaluate the technical and legal feasibility of a tax on foreign exchange transactions. The implementation of this tax could save millions of lives as well as facilitate the funding of global common goods in order to resolve the economic, social and environmental issues created by globalisation. This tax would not really affect the global economy as only 0.005% would be taken from foreign exchange transactions. According to Alain Joyandet, the French Secretary of State for Cooperation, between $30bn and $60bn per year could be raised through such a tax.

France and Belgium have already established a legal framework: France passed a law in December 2001 imposing this tax, but it will come into effect only if it is enforced at the European Union level; Belgium did the same in 2004. Civil society actors, mainly NGOs, are supporting the proposal: According to Jean-Louis Vielajus, president of Coordination SUD, "NGOs have asked the implementation of a tax on foreign exchange transactions for several years. We rejoice with the support of Bernard Kouchner and Alain Joyandet and urge them to bring this question at the European level and within the United Nations."

However, much effort remains to make the proposal a reality. The proposal of Bernard Kouchner has met the opposition of the French Economy Minister, Christine Lagarde, who declared that "nothing is prepared for the moment". Instead, she encouraged governments to implement taxes on airplane tickets (also known as "Chirac Tax") which is currently working. The proposal has also met the opposition of Great Britain and the United States, two of the biggest financial markets of the world.

Adapting to a changing climate: it’s time to talk technology

CIDSE and Caritas Internationalis, the largest networks of Catholic development and relief agencies in the world, say UN climate change talks in Bonn will fail the poor unless they provide the tools to deal with the dire consequences of climate change. They call on governments negotiating a new global climate change agreement not to forget about adaptation in their efforts to strike a deal on technology. In their joint report launched at the UN climate change negotiations taking place in Bonn since last week, Reducing Vulnerability, Enhancing Resilience: The importance of Adaptation Technologies for the Post-2012 Climate Agreement, CIDSE and Caritas Internationalis highlight the need for urgent enhanced action on adaptation technologies, which are key for adapting to climate change, reducing poverty and promoting sustainable development.

A substantial increase in investment and international cooperation on technology is one of the keys to reaching consensus amongst developed and developing nations on a new global agreement. Up until now, however, the negotiations have focused on high technologies for reducing emissions in developed and industrialising countries and technology for adaptation has received little attention.

“The negotiations must ensure a coherent and coordinated approach to technology and adaptation under the new agreement, and dedicate the financing and institutional capacity necessary to support them”, said Sol Oyuela, policy expert from the CIDSE and Caritas networks. “The negotiating text which has come out contains some promising language which can be built on in this direction, but there still is a need for more focus on the adaptation technologies, vital for the future of those most exposed to the effects of climate change,” she added. Sustainable afforestation projects in the Satkhira district of Bangladesh demonstrate how communities in developing countries are successfully implementing adaptation technologies. These projects not only protect riverbanks from erosion in face of increasing floods, the fruit provides additional income for the local community and the trees contribute to mitigation by absorbing CO2.

Please find the report >>> here.

European U-turn on the poor as economic crisis grips

As poor countries face the full impact of the economic crisis, European governments are falling short by nearly €40bn on their aid promises, a new report from CONCORD, the European confederation of development NGOs reveals. As Development Ministers prepare to meet in Brussels next week, the 2009 Aidwatch report, Lighten the load: in a time of crisis, European aid has never been more important, shows that European governments will not meet their 2010 aid target until 2012 unless serious action is taken now. Many governments are still inflating their aid levels by counting money that does not reach poor people.

Official figures show that in 2008, Europe allocated 0.40% of its gross national income (GNI) to aid. However, the report shows that most European donors have provided misleading aid figures. Out of almost €50bn provided as aid in 2008, close to €5bn went to debt cancellation, €2bn to hosting foreign students and close to €1bn to hosting and repatriating refugees. Real European aid amounted to only 0.34% of collective GNI. Missed targets and non-genuine aid will mean poor countries will have missed out on nearly €40bn by 2010 – enough to increase the income of 380 million Africans living in absolute poverty by one quarter.

CIDSE, the international alliance of Catholic development agencies, member of CONCORD and contributor to the report, urges the European Commission to set the example stepping up efforts in EU development aid. CIDSE observes a consistent gap between the Commission’s stated objectives and policies, on the one hand and the reality of the implementation and resources actually devoted on the other. It also reckons the Commission needs to step up efforts on equality commitments, poverty focus of EC aid and aid effectiveness. “Europe can and must get aid right, it is a matter of justice,” Bernd Nilles, Secretary General of CIDSE, said. “Making aid work means hope, while failing to do so implies privation and grim perspectives for our future.”

UNCTAD: Debt moratorium and stimulus for poor countries needed

UNCTAD's Secretary-General called for temporary debt relief for countries hard-hit by the economic crisis, telling a UN meeting that world attention to the crisis must not wane, regardless of signs of recovery in wealthier nations. Debt-ridden developing countries already struggling with the economic crisis will be particularly hard hit if they do not receive some form of debt relief in the immediate future, Secretary-General Supachai Panitchpakdi said at the annual dialogue at ECOSOC among the World Bank, IMF, World Trade Organization, and UNCTAD on 27 April. A temporary moratorium on their official debt servicing would give them some breathing space. “In the current global crisis situation, both debtor and creditor countries would probably be better served if scarcer foreign exchange earnings in the debtor economies were used for the purchase of imports rather than for debt servicing," he told the meeting.

The developing world, beset by declining export earnings, diminished foreign direct investment (FDI), and reduced remittances from citizens working overseas, as well as by rising social and financial difficulties, will also take much longer to recover from the crisis than will developed countries, Supachai said. And if better-off nations indeed begin their recovery this year and next – as some are predicting – the current sense of urgency may fade away, along with laudable measures now under way to assist less-wealthy countries. Any monitoring mechanism designed to predict or avert future crises should therefore consider trends throughout the world economy, including in developing countries, and not just in the advanced economies, he urged.

Supachai also recommended that supplementary International Monetary Fund (IMF) cash should be used to stimulate and expand developing-country economies, as the US and other developed countries are doing for their domestic economies. The IMF should not compel governments to curb public spending or tighten monetary policy, which would have exactly the opposite effect, he said. UNCTAD is predicting a US$2tr financial shortfall for developing countries, along with a 30% drop in exports in some sectors. A decline in food production is also likely, as is a recurrence of food crises in some parts of the developing world.

G7 sees economic encouragement (video)

>>> Statement of G7 finance ministers

Trade unions call on IFIs to act quickly on G20 goals

The international trade union movement has called on the World Bank and IMF to use the opportunity of their spring meetings in Washington to accelerate efforts to stem the global collapse in employment and economic prospects. In a statement released by the ITUC and its Global Unions partners, trade unions warn that global unemployment could increase by 50 million people in 2009 unless the IFIs and governments take immediate action to implement the commitments made at the G20 London Summit.

The statement notes that among the groups most affected by the financial meltdown are workers close to retirement in countries that adopted mandatory privatized pension funds as advocated by the World Bank. Global Unions suggests that the Bank participate in providing compensation for the loss of retirement incomes suffered by these workers. The trade union statement emphasizes that job creation and public investment must be an essential part of all economic recovery strategies, and further proposes the reform of global governance systems to ensure that the world economy remains sustainable after the crisis. Noting that longstanding demands for governance reform of the IFIs remain unfulfilled, the statement urges both the World Bank and IMF to quickly and substantially increase the representation of developing countries in their decision-making structures. It also suggests that the IMF should monitor recovery programmes and advocate for stronger fiscal stimulus measures if current expansion plans prove insufficient.

In addition to outlining the international trade union movement's proposals for new financial sector regulation, including the nationalization of insolvent banks, the statement encourages the IFIs to promote active labour market policies, extend social safety nets, and invest in "green" projects to shift the world economy onto a low-carbon growth path. It calls on the IFIs to work with the International Labour Organization to find employment-driven solutions to the crisis, to support the proposed Global Jobs Pact at the upcoming International Labour Conference, and to cooperate in establishing a global Charter for international governance that would include all the major international labour, financial, trade and development instruments.

IMF lending still requires harmful and inappropriate economic conditions

The Center for Economic and Policy Research (CEPR) released a new paper that finds that the International Monetary Fund (IMF) is still prescribing inappropriate policies that could unnecessarily worsen economic downturns in a number of countries. The paper, Empowering the IMF: Should Reform be a Requirement for Increasing the Fund's Resources?, examines conditions tied to the IMF's new lending to El Salvador, Pakistan, Ukraine and other countries and finds the IMF is requiring macroeconomic conditions that can unnecessarily exacerbate the effects of the global economic recession on these countries.

Among the harmful conditions cited in the paper are agreements that unnecessarily tighten fiscal and monetary policy in countries facing declining output and negative external economic shocks. The IMF has at the same time advocated the passage of economic stimulus packages and expansionary monetary policy in developed economies such as the U.S., Europe, and Japan. "The main purpose of the IMF's lending and the increased resources for the Fund right now is supposed to be to help low-and middle-income countries do what the high-income countries are doing - stimulate their economies," said Mark Weisbrot, Co-Director of CEPR. "It defeats the purpose to require them to do the opposite."

The authors also find that Fund-supported policies may have contributed to the vulnerability of countries in the current crisis, as it did in the run-up to the Asian crisis a decade ago. The paper concludes that governments allocating new resources to the IMF should first ensure that there is sufficient reform of IMF governance and past IMF practices, and that accountability mechanisms are put in place at the Fund.

G8 Agriculture Ministers admit failure on hunger

Agriculture Ministers have admitted that they will probably fail to deliver on promises to halve world hunger by 2015. The final communiqué from the G8 Agriculture Ministers meeting in Northern Italy says the world is “very far from reaching” the United Nations goal of halving the number of people facing chronic hunger by 2015. This is the closest Ministers have come to admitting they will not deliver on the Millennium Development Goal – one of the eight international development goals that 192 United Nations member states agreed to achieve by the year 2015. "G8 Ministers have made an extraordinary admission of collective failure. This would be a sack-able offence in any other arena," said Chris Leather, Oxfam International’s Senior Food Advisor. “The G8 has failed the world’s one billion hungry people.”

An extra 150 million people have become chronically hungry in the last year as a consequence of high food prices, making the world total near to one billion people. Without urgent action the number will increase rapidly due to the global economic crisis and in the face of climate change. The United Nations Food and Agriculture agency (FAO) has called on world leaders to take action in order to eradicate world hunger by 2025. However setting a new goal will achieve little if rich countries fail to deliver on their promises.

It now falls to G8 Development Ministers, who are meeting at the end of April, to come up with concrete proposals to tackle the food crisis. These proposals must be agreed by Heads of State when they meet in July. “When leaders of the world’s richest countries meet in July they must put an end to the grandstanding and take concrete action to end hunger," said Leather. Oxfam is calling for G8 leaders to commit to a legally binding international convention that aims to eradicate hunger. There is currently no way of holding governments to account for their failure to deliver on promises to tackle hunger. A legally binding commitment would enable civil society to hold governments to account for their failure to prevent people dying from hunger in a world where we have the means to prevent it.

The meeting of the G8 and G5 agriculture ministers in Cison di Valmarino, near Treviso in the Veneto region of northeast Italy, was the first of its kind. The ministers were asked to come up with concrete proposals to address food security in a declaration by the G8 Summit in Japan in 2008. But the meeting has not produced a single concrete proposal to fight hunger, not to speak about new financial commitments.

G20 results: Better done than the G8, but a long way to go

According to the European network on debt and development (Eurodad), political leaders did not agree ground-breaking measures to combat inequality or unsustainability or to transform global economic governance as had been suggested at the start of the enhanced G20 process last year. Yet the amount of money being pledged for developing countries is more than expected, if less than required. And on tax havens there are some useful steps forward, even if the model of information exchange will prevent many developing countries taking advantage of it.

The G20 has done better than many G8 and similar meetings in the past. But they have not sufficiently tackled the symptoms, let alone the causes of the crisis. The summit has certainly failed to “refound the financial system” as was promised before the G20 first met last November. However Eurodad wants to build on several elements in the statement, and plans active follow-up advocacy in the coming months.

Excerpts from a Eurodad statement: The communiqué states that $1.1 trillion extra money will be made available for the International Financial Institutions. Of this it states that $50 billion will be provided to “safeguard development in low-income countries”, but does not specify the time period for spending this.

The money comprises:
• $250bn in IMF Special Drawing Rights. Some $19bn of this will reach low-income countries.
• $500bn new contributions by governments to the IMF of which some $25bn over two years may be for low-income countries.
• $250bn in trade finance from export credit agencies, private companies and regional development banks, but unclear how much for low-income countries.
• $100bn extra via multilateral development banks, to be funded via bond issuances, but none for low-income countries.
• Around $6bn or so for low-income countries to be funded by IMF gold sales.

More than expected of the announced package is new money and $50bn is clearly earmarked for low-income countries, higher than expected. But there are four issues of concern. The amount for use in 2009 is not detailed, although one section of the communiqué suggests it will be over 2-3 years. During this year low-income countries are expected to face a crisis shock of $216bn according to the IMF. Also the finance is mostly in the form of loans or guarantees, not grant transfers. On lending policies or instruments the IMF is praised for its recent conditionality reforms and its Flexible Credit Line (FCL) – which Mexico has just started using – is also mentioned. There is, however, no decisive break with the economic policy conditionality that has partly caused this crisis and which seriously aggravated the social impact of previous financial crises.

The communiqué recognises that the crisis has “a disproportionate impact on the vulnerable in the poorest countries”. To deal with this it also reaffirms previous commitments to the MDGs and to ODA, and mentions that:
• The UN is asked to “establish an effective mechanism to monitor the impact of the crisis on the poorest and most vulnerable.
• Some of the low-income country money will be channelled through the World Bank’s Vulnerability Fund, but the nature of this fund is unclear.

On regulation Gordon Brown told the G20 London summit press conference that the G20 has announced an “end to tax havens that do not transfer information on request”. The Global Forum based at the OECD will today publish a list of non-cooperating jurisdictions. The “international standard for exchange of tax information” mentioned in the communiqué is not clear. But it is likely to be based on compliance with measures proposed by the Financial Action Task Force, IMF’s Review of Standards and Codes and perhaps the UN treaty on information exchange. The measures announced are a start, but will not make a significant progress in the fight against tax avoidance industry.

Other measures on regulation that were briefly announced include:
• IMF surveillance will be enhanced.
• Regulation will be extended to “systemically important hedge funds”, though nothing is said on how regulatory arbitrage will be avoided.
• The Financial Stability Forum will be strengthened and renamed the Financial Stability Board, with new members including all G20 members, Spain and the European Commission.

The leaders agree that IFI “mandates and governance must be reformed to reflect changes in the world economy”, but have agreed little specific. The IMF quota reform already agreed last year is re-announced and a further one pledged “by 2011”. The World Bank should propose further ways to change its governance “by 2010”.

G20 summit results: Chance for a new globalization?

According to the International Trade Union Confederation (ITUC) and the OECD Trade Union Advisory Committee (TUAC), the statement adopted at the London G20 meeting gives the chance for a new globalisation, with jobs at the centre and an end to the failed policies of the last three decades. "The G20 has given us the chance to turn back decades of deregulation and restore the role of government in making sure that finance serves the real economy, which in turn must serve people. Massive challenges still lie ahead in restoring economic growth and employment, notably how the structures and policies of the international financial institutions will be reformed," said ITUC General Secretary Guy Ryder.

Central for the trade union’s view are the following decisions taken at the Summit:

* A major emphasis on saving and creating jobs, with a key role for the International Labour Organisation (ILO) in monitoring developments and setting future global economic policies;

* Regulation of financial markets and action on tax havens and executive pay;

* Further support for developing and emerging economies, reform of the international financial institutions and a reaffirmed commitment to the Millennium Development Goals;

* Policies to avoid "boom and bust" economic swings and support for counter-cyclical economic activity;

* A renewed commitment to tackling climate change with a pledge to reach agreement at the Copenhagen climate summit in December 2009; and,

* Work on a new charter for sustainable economic activity.

"The enhanced role for the ILO is particularly welcome, and will be essential to meeting the G20's commitment that the recovery plan has the needs and jobs of working people at its heart. The Global Jobs Pact is the key to this," Ryder said. John Evans, General Secretary of the OECD Trade Union Advisory Committee, welcomed the movement on banking and finance regulation, but insisted that "trade unions must have the opportunity to influence the structure and workings of the new Financial Stability Board, and ongoing access to its decision-making and work programme, which has to be fully transparent and accountable. We cannot allow the same people who got us into this mess to be given the job of getting us out of it".

Advocacy work by trade unions around the world, including meetings with G20 leaders in the days prior to the Summit and in London itself, was a major factor in ensuring that employment is included as a top priority in the reform and recovery plan, and that the G20 is calling on the ILO to "assess the actions taken and those required for the future". The need and scope for further fiscal stimulus also remains a pressing issue, given the scale and depth of the jobs crisis. Governments need to begin now to prepare further job-creation measures to be implemented over the months ahead.

A number of important aspects of the G20 plan have yet to be finalised in detail. According to the unions, particular emphasis should be placed on reform of the financial institutions and their policies, ensuring that the stimulus packages and trade and development financing translates into decent and sustainable jobs, keeping the governments to their commitments on development aid and climate change, and guaranteeing that the ILO is able to play its role alongside the global finance and trade agencies. The Summit's agreement on the "desirability of a new global consensus on the key values and principles that will promote sustainable economic activity", and to start discussion on a "charter for sustainable economic activity", is especially welcomed by the international trade union movement.

G20 summit: We should look at specific numbers

Comment by Mary Robinson

I am worried about what the outcome of this G20 Summit will be for poor developing countries. I understand from experience how these kind of discussions are held and the pressures that are exerted. But I do get the strong sense today that the G20's focus is much closer to home - that this meeting is about reforms through stronger regulation and stimulus packages all designed to move the richer and more powerful countries out of financial crisis.

I have just returned from Liberia, the DRC, Rwanda and Kenya where I have been with poor people who are living on the very edge of survival. They are truly desperate. They are still suffering from the crippling effects of inflated food and energy prices, and from worsening climate change, and now they're being hit by a financial crisis that their governments played no part in causing. The financial crisis is hurting rich countries - but it is truly catastrophic for the poor.

Can I remind about Article 28 of the Universal Declaration of Human Rights. It's very short. "Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized." Today, I see our "social and international order" unraveling. There have been food riots. There will be others. The financial crisis is having a profound destablising effect. I believe that the security concern is an extremely strong one.

The developing world needs its own stimulus package to help ensure better global security and to meet finally the millennium development goals particularly to halve poverty and achieve people's rights to health and education. The amount of money needed to do this is minimal compared to the vast bail-outs of the banks; one of the biggest lessons we have learnt in the past 12 months is that huge resources can certainly be mobilized if there's a will to do so.

This afternoon we should look to the G20 for specific numbers to help poor and developing countries. We should be wary of rhetoric only. More money to the IMF and World Bank is welcome but alone will not be sufficient. The G20 must put poor countries at the centre of its agreement, not in the margins.

Mary Robinson is Honorary President of Oxfam.

Bank bailout could end poverty for 50 years

The $8.42 trillion promised by rich country governments to bailout banks would be enough to end global extreme poverty for 50 years and a massive step towards ending it forever, Oxfam said ahead of today’s meeting of G20 leaders in London. The $8.42 trillion – made up of capital injections, toxic asset purchases, subsidised loans and debt guarantees – is equivalent to more than $1,250 for every man woman and child on the planet. The annual cost of lifting the 1.4 billion people living on less than $1.25-a-day above this threshold is $173bn. G20 leaders could make a massive difference to the world’s poorest people by diverting a tiny fraction of the bailout money to provide an economic stimulus, social safety nets and health services for those affected by the economic crisis. Oxfam is calling for a $580bn-a-year rescue package for poor countries made up of an immediate fiscal stimulus for the poorest countries of at least $24bn, debt relief and fulfillment of existing pledges to increase development aid.

Urgent action is also needed to crackdown on tax havens, which deprive developing countries of hundreds of millions of pounds of tax revenue every year – much more than they receive in development aid. Barbara Stocking, Oxfam Chief Executive, said: “When you look at the amount of money that has been found for banks it seems inconceivable that G20 leaders will stand aside and allow the economic crisis to destroy poor people’ lives." An Oxfam report, published earlier this week, revealed women are hit hardest and are often the first to lose their jobs as countries slide into recession. For many, in developing countries the recession comes on top of high fuel and food prices that have already stretched communities to breaking point.

Oxfam is pressing for rich country governments to promote a ‘green new deal’ by ensuring their domestic rescue packages help tackle climate change by accelerating the transition to a low-carbon economy. Stocking said: “We cannot return to the situation where the greed of the richest was allowed to take precedence over the needs of millions. G20 leaders have a real opportunity to take a significant step towards a fairer, more sustainable world.”

Jobs, Justice, Climate

Further video >>> here.

Trade unions to G20: Half measures will not fix broken global economy

In a worldwide push for action by G20 governments to pull the global economy out of recession and chart a new course for job creation, financial regulation and global governance, trade unions across the world have delivered a common set of demands to their national governments. The five-point union plan, which includes detailed policy proposals, sets out the actions needed to tackle the crisis and build a fairer and more sustainable world economy for the future. It calls for:

* a coordinated international recovery and sustainable growth plan to create jobs and ensure public investment;
* nationalisation of insolvent banks and new financial regulations;
* action to combat the risk of wage deflation and reverse decades of increasing inequality;
* far-reaching action on climate change;
* a new international legal framework to regulate the global economy along with reform of the global financial and economic institutions (IMF, World Bank, OECD, WTO).

The Global Unions G20 London Declaration, developed by the ITUC and the Trade Union Advisory Committee (TUAC) at the OECD, sets out the steps which need to be taken by the G20 in cooperation with other governments. It was presented by national trade union movements to their governments, and will be formally submitted to the G20 Leaders’ Summit in London on 2 April. Trade unions from around the world are also joining their colleagues from the British TUC in a huge civil society mobilisation planned for London on 28 March, to press home the need for coordinated global action by governments.

Recovery and sustainable growth can be achieved, according to the Declaration, but only if the focus is on job creation and public investment, active labour market policies, extending social safety nets and special measures for developing and emerging economies. The trade unions also put forward an eight-point specific action plan for global financial regulation, with immediate action to nationalise insolvent banks.

The London Declaration points to the real risk of wage deflation, and highlights the fact that growing income inequality across the world has been a major contributor to the current recession, as workers’ purchasing power has been insufficient to help maintain demand for goods and services. Ensuring that all workers have the right to collective bargaining, and strengthening wage-setting institutions, will establish a decent floor in labour markets and feed economic stimulus through more household buying power. This is closely linked to the broader requirement for reform of the IMF, World Bank, WTO and OECD, with the inclusion of the International Labour Organisation at the centre of an effective and accountable system of global governance.

The union proposals also focus on the urgent need for impetus to tackle climate change, given the enormous environmental, social and economic costs of inaction. Already, governments should be using coordinated global fiscal response to the economic crisis to set the world on a “green economy” path. Creation of green jobs, and action to ensure “just transition” in communities and sectors affected by the move to environmentally-friendly production, are central to achieving the levels of greenhouse gas reduction needed, and will contribute to pulling the world out of recession.

The declaration is available >>> here.

Subprime Carbon report points to dangers of unregulated carbon markets

If it is not structured properly, global warming legislation could lead to the creation of an enormous, poorly regulated derivatives market with failures mirroring those that led to the current financial crisis, according to a report released by Friends of the Earth US. The report, Subprime Carbon? Re-thinking the World’s Largest New Derivatives Market, finds that existing financial regulations, as well as those in major cap- and-trade bills, are inadequate to govern carbon trading, creating a potentially huge regulatory gap.

“Global warming has reached a crisis point, and it’s imperative that Congress move quickly to put solutions in place, but it’s also important to be careful and do this the right way from the start,” said Michelle Chan, a senior policy analyst at Friends of the Earth and the author of the report. “If we aren’t careful, we could end up creating a massive, poorly regulated derivatives market that not only poses risks to the broader financial markets, but also undermines efforts to save the climate.”

The report outlines how lessons from the current financial crisis apply to carbon markets, which could become the largest derivatives markets in the world. In particular, it raises concerns about “subprime carbon,” risky carbon credits based on uncompleted offset projects (projects designed to sequester or reduce greenhouse gases). Subprime carbon credits may ultimately fail to reduce greenhouse gases and, like subprime mortgages, could collapse in value, yet they are already being securitized and resold in secondary markets. The report recommends that lawmakers include carbon trading in current debates about financial reform, and warns against hastily creating carbon markets without proper oversight.

The full report can be viewed >>> here.