Press release: CAFOD analysis of the Los Cabos final declaration

CAFOD’s economics analyst Christina Weller said:

ON THE EUROZONE:

“The G20 needs to get its house in order. Problems in the Eurozone have huge implications for the economic prospects of developing countries. Behind the figures are real people losing jobs. Countries such as Zambia historically rely on Europe for up to a third of its trade and half of its aid. When the crisis hit in 2008 exports plummeted and a third of jobs were lost in the dominant copper mining sector. Poor traders and producers in Zambia need more than a quick fix for the Euro, they need the G20 to get down to its core business of ensuring that these crises don’t happen again and making global rules fairer, so they are not at the mercy of volatile and distorted markets.

“It's unclear whether it's the Eurozone crisis killing progress again or just that the G20 is too slow and ill-equipped to deliver real progress, but there is a lot in the declaration that we have seen before. The G20 has been around for long enough now that we can reasonably expect it to begin to deliver on its commitments and ambitions.”

ON MEXICO’S LEADERSHIP:

“Mexico has done well to raise the profile of some critical issues, despite the urgency of addressing problems in Europe. As a result, there are also some novelties in the draft document, but important issues appear to have got watered down during the consensus-building process. “Mexico has done a good job of reaching out to broader groups than other G20 presidencies to date, notably to civil society. However, this has not become systematised in the way dialogue with business and labour has. Resistance from other G20 members, such as China, has won the day on this.”

ON FINANCIAL REGULATION:

“The G20’s basic business should be to regulate the financial sector – after all that’s why it got together again in 2008 and has been meeting at summit level ever since. Progress here has been painfully slow. G20 steps to date have not prevented Spanish banks yet again needing public bail-out or JP Morgan making massive losses. This matters for poor men and women who lose their jobs in export sectors when G20 economies stagnate and flounder. They cut spending on food, education, health and other essentials. The impacts can be devastating and long-term.”

ON GREEN GROWTH AND RIO+20:

“The G20 has set the right tone for Rio+20 negotiations next week by focusing on making economies inclusive and green, emphasising that tackling poverty and environmental sustainability need to go hand-in-hand and that policy-making needs to factor in social and environmental costs. However, the G20’s approach to infrastructure to date is neither green nor inclusive. Last year’s infrastructure action plan included controversial projects such as the Inga Dam project in DRC which will do little to increase energy access for the poorest and will have dire environmental consequences.”

ON FOOD SECURITY:

“Food security has rightly received unprecedented attention at this G20. At a time when almost one billion people are hungry and new challenges of increasing demand, climate change and food price volatility are putting pressure on an already broken food system, the urgency is clear.

“There has been welcome emphasis of the importance of smallholder farmers in tackling food security. But the concrete steps are small: yesterday we saw the UK, Canada and Australia take the first step in implementing the Toronto Summit (2010) commitments on increasing investment in research and development to benefit those farmers.

"Moreover, the G20 needs to shift its focus from increasing production as the solution to tackling the power imbalances that mean farmers themselves go hungry in a world where there is currently enough food for everyone. Tackling vulnerability and volatility will be key to strengthening smallholder farmers’ position in markets. Here too, the G20 could do better: reaching agreements on biofuels targets and better regulation of commodity speculation to combat shifts in food prices, neither of which have progressed at the Summit.”

ON DEVELOPMENT:

“Development fills an impressive number of pages in this year’s outcome documents. Mexico deserves real credit for that. However, it’s quality not quantity that matters and we haven’t seen the progress on promises that we hoped for.

“The G20 has only reiterated its commitment, made in Cannes, to supporting social protection floors in low income countries. These safety nets are vital to support the livelihoods of poor men and women and to ensure that crises do not result in drops in spending in health, education and nutrition in poor households. A new platform to coordinate efforts among agencies is planned. However, we need a concrete plan of action to implement this pledge and there is no commitment to funding to help with high start-up costs in those cash-strapped countries.”

ON G20 FITNESS FOR PURPOSE:

“It’s not that there is no progress at all, but it’s too little and too slow. Commitments, such as the phasing out of fossil fuel subsidies, have been outstanding since Pittsburgh and there is no real barrier to progress than political will. Ending these harmful subsidies will not only make economies greener, but also free up vital funding for tackling poverty and climate change.

There is still no timetable for phase-out, but we would welcome the peer review mechanism mooted in the declaration.

“Some critical and urgent issues have no mention in the draft text, but optimists can hope that the G20 might eventually deliver something more substantive. Despite the warm words of Barrosso this week on a financial transaction tax, there is no progress on innovative financing. However, a climate finance study group has been set up; we can only hope that it can deliver the goods. “But what is really needed is a mechanism to make the G20 accountable on delivering its commitments and objectives. The Mexico Presidency has taken steps to improve this aspect of G20 working, and with some months left of its tenure, perhaps we can hope for more progress.”

ENDS

For more information contact Pascale Palmer ppalmer@cafod.org.uk +44 7785 950