G20 must create new Seoul development consensus

Growth is necessary but not sufficient to lift poor people out of poverty, international agency Oxfam said as it published a briefing paper calling on the G20 to agree an historic new Seoul development consensus to help the world’s poorest. The paper, The Making of a Seoul Development Consensus, shows that people living in extreme poverty largely missed out on the benefits of growth in the last two decades of the 20th century. The poorest received only 1.5% of the $1.9trillion additional global gross domestic product (GDP) even though they accounted for a third of the world’s population at the start of the period. Today, the poorest 40% get just 5% of the world’s income.

By contrast, the poorest have been hit hard by the recent global slump with the World Bank estimating that 64 million have been pushed into poverty by the crisis and the poorest countries suffering a $65bn fiscal hole, forcing them to make cuts to health, education and agriculture spending. This comes at a time when millions of poor people are already struggling as a result of increased food prices and extreme weather linked to climate change.

G20 officials are meeting in Seoul on Thursday and Friday this week to lay the foundations of the G20’s approach to development ahead of the Heads of State summit next month. Jasmine Burnley, Oxfam policy adviser and co-author of The Making of a Seoul Development Consensus, said: “These startling statistics show the scale of the failure of the discredited Washington consensus and the need for G20 leaders to break with the past and provide real global economic leadership in tackling poverty. Economic growth is vital to help poor people escape poverty, but history teaches us that it is not enough on its own. We need to see a new Seoul Consensus that not only drives economic growth but is sustainable and ensures the poorest receive a fair share of the benefits.

“The G20 should ensure that investment in agriculture, free health care and education are stepped up, not reduced in response to the economic crisis. Malaria alone costs Africa $12bn each year in lost revenue and improvements in education are clearly linked to increases in GDP. In this way helping the poorest will boost the global economy to the benefit of all.”

Oxfam is calling on G8 countries to meet their existing promises to increase overseas aid. It also wants the G20 to take action to fix the hole in poor countries’ budgets by introducing a financial transaction tax on the banks, hedge funds and other institutions whose greed did so much to cause the economic crisis. Burnley said: “It cannot be right that while banks have received trillions in state bailouts poor countries are left without any alternative but to slash essential services to the poor as a result of a crisis they did nothing to cause. Taxing the financial sector is the fairest way to protect the poorest from the damage done by the global financial elite.”

* Please find the report >>> here.