G20 as “work in progress” – beyond Syria, St Petersburg delivers mixed results
The official declaration from the St Petersburg Summit contains some good outcomes - particularly on unfair tax rules - and some disappointments - especially on its agenda to help low income countries, but mostly it is unfinished business – particularly on climate change, financial architecture and regulation.
CAFOD's lead economic analyst Christina Chang said: "It is commonplace to wonder whether the G20 is worth it, whether they will reach any meaningful consensus and whether these high level summits ever result in changes on the ground. But the G20 is making progress, although we’d like to see much more."
"In St Petersburg we saw little new thinking on development, despite lessons learned from the economic crisis on the importance of tackling inequality head-on and focusing on those sectors that create jobs to ensure that everyone can participate in and benefit from the economy. Particularly disappointing was the failure to focus on small, rural businesses in its infrastructure initiatives, the failure to set up mechanisms for more systematic input from those representing poor small business-owners, and the failure to adopt the principle of “development coherence” to ensure that all G20 efforts work towards its goal of inclusive and sustainable growth."
"But there was some progress – for example welcome progress on tackling unfair tax rules that deprive poor country governments of billions of dollars in income every year. The G20 kept up momentum from the G8 and endorsed the development of a new global tax standard for automatic exchange of information that will help countries to tackle excessive tax avoidance by global companies. But for this to be meaningful, we also need reporting on profits by those companies on a country by country basis and accurate open data to tell us who really controls and benefits from companies, without exception."
On financing for investment:
“Leveraging financing from the private sector is not a silver bullet for bridging the huge gap in infrastructure spending. The benefits of private participation in these projects is not automatic and there are also pitfalls to be considered. A true cost-benefit analysis needs to be at the core of these decisions and we need to ensure that the proper safeguards and decision-making processes are in place to ensure that they have good outcomes. The G20 should also identify critical infrastructure investment gaps where the private sector will not invest – these are often those of greatest importance to poor men and women, such as rural roads, where there is little profit to be made."
On strong, sustainable and balanced growth:
"CAFOD welcomes the continued strong focus on jobs by the G20, but they still fail to focus on small business in developing countries which accounts for up to 90% of jobs. They also fail to explicitly tackle inequality – even though the World Economic Forum tells us this is the biggest risk for global economic stability, the IMF tells us that it stunts growth and the World Bank tells us that it stops growth translating into poverty eradication. If the G20 truly wants inclusive growth, it is going to need to become more inclusive itself – it cannot work well for entrepreneurs in developing countries, who are the key to unlocking inclusive growth, if their representatives are not included in discussions. Russia made a good start in formally including civil society in discussions, this needs to become more systematic and on a par with discussions with business groups."
On Climate change:
"Commitments to phase out fossil fuel subsidies are long-standing and vastly overdue. Whilst we welcome statements reiterating support for climate change negotiations and continued interest in the Green Climate Fund, there is little in the way of real progress in this urgent, critical area."