Toronto G20: `Toxic remedies' will make workers and poor pay for the crisis

By Damien Millet, Sophie Perchellet and Eric Toussaint. Translated by Christine Pagnoulle and Marie Lagatta

June 28, 2010 -- Committee for the Abolition of Third World Debt -- As at its previous meetings, the Toronto summit of the exclusive G20 club, to which the world’s richest countries invited the heads of state of the major emerging countries, once again raised great expectations only to end as an empty bubble. As in London in 2008, then Pittsburgh in 2009, the Toronto G20 discussions focused on a way out of the economic crisis. But a capitalist way out, favouring creditors and great powers.

For the last two years global financial regulation has been an elusive sea serpent, unsurprisingly resulting in no concrete measures. To appease their citizens who pay a high price for the consequences of the present crisis, although they bear no responsibility for it, governments pretend they are trying to redefine the rules in the global financial game whereas for decades they have promoted the cancellation of any rules that would protect the world’s peoples.

Regulation of the derivatives market, i.e. purely speculative financial innovations with no social utility, capital requirements for banks, limits on the new surge in bonuses for executive officers in major banks, taxation of major banks and financial transactions are issues that brought out sharp divergences within the G20. This is a very convenient way of not deciding on anything. This agenda won’t be discussed until the next G20 summit in Seoul in November 2010. This is an effective means of making no progress on this essential issue. Each media show is sure to feature the same harping against protectionism. All over the world, the World Trade Organization (WTO), backed by the World Bank and the International Monetary Funds (IMF), pursues its mission of doing away with national protections, viewed as obstacles to free trade. This means people’s fundamental rights, such as the right to food sovereignty, are sacrificed on the altar of growth and profits.

However, the various crises that have shaken the world in recent decades have their origin in this very liberalisation of trade and of the flow of essential speculative capital. The major financial deregulation in the 1990s, destroying complete sectors of national economies, and dismantling the state set the stage for the sudden offensive of capital holders against populations all over the world, first in the global South but now also in the North.

The current crisis and bank bailout plans have hugely increased the public debts of countries in the North. The hurricane of austerity measures unleashed on European countries has led to drastic public spending cuts while preserving returns on capital. The G20 thus committed itself to fiscal plans that will at least halve deficits by 2013 and stabilise or reduce government debt-to-GDP ratios by 2016. |1| The cuts needed to achieve this will put the burden on working-class people and favour affluent classes.

The toxic remedies first applied in the 1980s are back: wage cuts or freezes, higher VAT, deregulating the labour market, privatising public companies, retirement pension system “reforms”. The first victims of all these austerity measures will be found among the people whose situations are most precarious. Since 2008, the IMF has opened credit lines to some 10 European countries. In Iceland, the people have made clear that they would not pay for the financial and banking sector’s mistakes. In Romania the 15% cut in retirement pensions was ruled unconstitutional despite IMF pressure. In Ukraine, relations between the IMF and the government have stalled since the latter’s unilateral decision to raise minimum wages by 20%. Several major demonstrations have taken place in countries hit by these policies, as well as in Toronto, where anti-G20 demonstrations were brutally repressed.

The G20 summit was thus merely one more building block in a capitalist way out of the crisis. For everyone struggling for social justice, this G20 is an empty shell: it relentlessly makes the same unjustifiable demands and comes up with the same old phoney “solutions”. Leaving aside the illegitimate G8 and G20, the very root of these crises must be tackled, by expropriating banks and transferring them to the public sector under citizens’ control, by a citizen’s audit of the public debt to cancel illegitimate debts, by establishing genuine tax justice and a fairer distribution of wealth, by fighting massive tax fraud and evasion, by regulating financial markets through a register of shareholders and the prohibition of short sales, by a radical cut in working hours to create jobs while safeguarding wages and increasing retirement pensions. To achieve this we have to build a vast popular mobilization to unite local struggles on an international level and do away with socially regressive policies.

[Damien Millet, Sophie Perchellet and Eric Toussaint are spokesperson, vice-president of CADTM France and president of CADTM Belgium respectively.]


|1| The G-20 Toronto Summit Declaration

Submitted by Terry Townsend on Tue, 06/29/2010 - 14:57


By Stephen Leahy

BERLIN, Jun 26, 2010 (IPS) - The G8 bloc of wealthy nations promised five billion dollars Saturday for health and nutrition programmes that benefit women and children in developing countries.

The five-year Muskoka initiative announced at the annual G8 meeting, this year outside of Toronto, is intended to help prevent the deaths of hundreds of thousands of women and babies who currently die during childbirth each year. Nearly eight million children, mostly in Sub-Saharan Africa and South Asia, die before they reach the age of five.

Flavia Bustreo, director of the Geneva-based Partnership for Maternal, Newborn and Child Health, which represents more than 300 global and national organisations, welcomed the world's richest countries' focus on maternal and child health, which is a historical first, she said.

However, she told IPS from Geneva, "The glass is half-full when it comes to their financial commitment."

Oxfam and other NGOs also charge that G8 donor nations have been playing a shell game - making multi-billion-dollar commitments at such meetings but without increasing their overall spending on overseas development aid.

"No maple leaf is big enough to hide the shame of Canada's summit of broken promises," said Mark Fried, spokesperson for Oxfam.

Activists say the G8's "fair share" is at least four billion dollars a year, or 20 billion of the additional 30 billion dollars needed through 2015 to meet the Millennium Development Goals of a 75-percent cut in deaths of women related to childbirth and a two-thirds reduction in deaths of children younger than five by 2015, compared with 1990.

That 30 billion dollars would save the lives of an estimated one million women and 11 million children under five, and prevent 1.5 million stillbirths, the United Nations and the Partnership have calculated.

Canada, as host of the combined G8 and G20 summits, has made much of its commitment to maternal and child health, offering to contribute 1.1 billion dollars over five years.

"I am very pleased to announce Canada's contribution to this critical initiative," said Prime Minister Stephen Harper in a statement.

Critics point out that Canada's new five-year contribution to saving the lives of hundreds of thousands of women and children is less than the overall cost of hosting the back- to-back summits over three days. Hundreds of millions of dollars were spent fixing up and "securing" a remote area north of Toronto for the day and half G8 summit, that also happens to be the riding of Canada's Industry Minister Tony Clement.

The larger G20 summit is being held in Toronto Saturday and Sunday. More than 20,000 security personnel are involved including the Canadian military. The security costs, which include 5.5 million dollars for a security fence, have outraged the Canadian public. Last year's G20 Summit in London, England reportedly spent 30 million dollars on security.

The G20 includes the "world's most industrialised nations" (which also comprise the G8): Canada, France, Germany, Italy, Japan, Russia, Britain and the United States.

Its other members are Australia, Mexico, Turkey and South Korea, Argentina, Brazil, China, India, Indonesia, Saudi Arabia and South Africa, plus the 27- member European Union.

Although Canada did pledge 1.1 billion dollars of new money, it is less than the 1.2 billion being spent for three days of security at the G8 and G20 summits, said Robert Fox of Oxfam Canada. Moreover, other G8 leaders failed to give more because Canada is freezing its aid spending next year to bring down the deficit.

"We had hoped to see much more coming from the countries of the G8. It's a disappointment," said David Morley, president of Save the Children Canada.

There are also charges the Harper government is imposing its religious views on the rest of the world by stating that none of its money can be used to support abortion or abortion services irrespective of a county's laws.

Abortion is legal in Canada. Each G8 country chooses where and who gets its funding and under what conditions, Bustreo said, noting that the G8 documents do not make any specific references to abortion.

"This year the headline is maternal health, last year it was food. With overall aid frozen, the G8 are just shuffling the same money around to different pots," said Oxfam's Fried said in a statement.

At the last G8 Summit, donors pledged 22 billion dollars over three years to support agriculture in developing countries, but Oxfam calculates that at most 6.0 billion dollars of this is new money.

"The only promise that counts is the Gleneagles one to increase aid by 50 billion dollars by 2010 and that is the one they have abandoned today," said Fried.

The main focus of the G8 meeting has been on economics and deficit reduction, with Harper calling on G8 and G20 countries to pledge to cut their deficits in half by 2013.

"After the scandal of the G8's broken promises, the G20 now has the chance to stand up and deliver for the world's poor," said actor and Oxfam Global Ambassador Bill Nighy in Toronto.

"A Robin Hood Tax on banks is a simple but brilliant idea to raise hundreds of billions of dollars to help millions of poor people who have been hit hardest by global economic downturn, hunger and climate change," said Nighy.