Ethiopia: Unmet Demands of the G20
The creation of the Group of Twenty (G20) was believed to serve as a remedy to the harsh realities of the world today.
The initial formation of the Group of Seven G7 could do little to avert pertinent challenges both the developing and the developed nations face frequently. So a new pull of twenty large economies of the world needed to converge together to form the current group of twenty nations in late 2000. Actually, G20 composition of 19 individual countries and the European Union (EU).
As the presidency of hosting the G20 since August 2014 was the official duty of Turkey, the Eurasian country has been busy organizing the multifaceted pre-leaders’ summit. Finalizing so many engagements across the board prior to the leaders’ summit kick-started, Turkey instigated what it calls the three “I”s (Inclusiveness, Implementation and Investment) strategy to the table of member states which include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, the US, and EU.
Major players of the world who represent some 85 percent of the world economy and two third of the global population have convened to react on what has been on the table. However, the unfortunate barbaric attacks in Paris, France cast a dark shadow on the meeting. An immediate statement was been released from Antalya where heads of state were politicking. The US President Barack Obama was asked questions related to the Paris attacks by journalists. The Russian strongman, President Vladimir Putin, was was also the center of attention. The host president, Recep Tayyip Erdoğan, was bold in addressing journalists how the attackers should be responded too. He further mentioned how the G20 is planning to create thousands of jobs and ensure gender equality between now and 2018.
In any case, though Turkey advocates G20 shall be seen as a group that considers “inclusive and robust growth” to the rest of the world, its prime concerns are merely of that of member states. Both during the presidency of Australia last year at the Brisbane Summit and this week at the Antalya Summit in Turkey, the group had been busy figuring out most domestic issues. For instance, the members have agreed to boost economic growth within the group to hit at least a 2.1 percent growth a year until 2018. They have conferred diplomatically to reduce or perhaps eliminate subsidizing fossil fuel vis-à-vis showing their concerned for environment.
What is G20 for Africa?
The G20 has long been a considered to be a white collars club. Lately, the statements coming out of some members suggest that the group is required to be more inclusive. In the case of Africa, the group seems to be presenting itself as an NGO. They have claimed to extend support for some 600 million people in Sub-Saharan Africa for access to energy. In addition to that, they have pledged to work on how to avail Africa and the rest of the poor communities elsewhere by way of taking food security measures. According to Turkey’s officials, the food waste generated out the G20 members adds up to reach about a trillion dollars per year. Reducing that figure could mean to have additional resource to assist the food insecure regions of the world, mainly Africa.
Nonetheless, since 2014 assuming the revolving presidency of the G20 which rarely happens to be assumed by developing member states, Turkey has done some activities which could be considered as inclusive approaches. For the first time in the G20’s normal routine, Turkey has arranged to invite energy ministers from Africa and beyond to discuss issues of access to energy and how that can be achieved. In that regard, many have voiced that it is not bad to have a fresh start and have talks. However, how pledges of support would be realized and how working together in such areas is something left for China as the Asian giant chairs the next summit.
With regard to tax evasion and profit shifting, though it is not purely to serve Africa, the G20 has maintained a strong stance.
That said the Turkey summit has made a few references to a conference Ethiopia has hosted recently. The UN has initiated a summit as known Finance for Development (FfD) conference and while concluding the Addis Ababa meeting, the UN has announced the agreements countries have reached on. The document is now called the “Addis Ababa Action Agenda”. From this document, the G20 have promoted their interest at least in areas of eradicating poverty so that countries commit to their pledges for the implementation of the Addis Ababa Action Agenda. The UN-led Sustainable Development Goals (SDGs) has envisioned that by the end of 2030 member countries should attain poverty eradication.
In addition to that, reducing the cost of remittances across the developing and least developed world is planned to be reduced. According to the G20’s statement in line with the Addis Ababa Action Plan, the cost is targeted to go down as low as five percent from the existing 12 to 20 percent for one dollar remitted to the developing world and among the G20 members. When it comes to alternative financing, the Addis Ababa Action Agenda calls for multilateral institutions in addition to the International Monetary Fund (IMF) and the WB as means of financing sources. Though it did not mention specific ways of accessing other sources, the G20 have commended the Addis Ababa accord.
Restructuring IMF is beyond the G20
However, most cases seem unrealistic and are yet to materialize. For instance, since the aftermath of the global financial crisis that hard-hit elite economies, developing nations were calling for the reform international financial institutions like the International Monetary Fund (IMF). They have staged a number of smear campaigns against the IMF and called for the regulation of its authorities. However, nothing happened over the course of nine years or so.
The only challenge they say they are facing is the US. It is America which dominates the Bretton Woods system so reforming the IMF requires a go ahead from the US. That, however, does not come easy. Simply because China and the rest of the developing camp of the G20 members are insistent that the move would bring no change at all. One sure thing for the US not to do so is because it is the major shareholder in the IMF.
Yet again if the promises of President Obama to reform the IMF are to be kept, there is the US congress which these days reject and says no to everything the president attempts to introduce. So the question of reforming the monetary fund has been long halted this way. During the week in Antalya, leaders called on the US to speed the ratification process and affirm the required reforms and changes to happen at the Fund.
Along this line of defense, the US has led a coalition to establish a Trans-Pacific Partnership Trade agreement where China has been excluded. For some, the move has been seen as a deviation from the group. But others view the move as a retaliation to what China has done recently to establish an Asian Infrastructure and Investment Bank (AIIB) which is believed to compete and to some extent with the IMF.
Basically, the rest of the G20 and by extension other economies across the board might have been more interested to see the quota systems and other binding ceilings the IMF imposes on countries to access to finance eased up. However, that move has been long awaited until the US says okay and let it happen.
A critic published in the East Asia Forum website could elaborate why the reforms voiced against the IMF are serious. “The IMF has not been able routinely to provide liquidity for countries threatened by the international withdrawal of capital funds. The IMF does have a Flexible Credit Line (FCL) and a Precautionary and Liquidity Credit Line (PLL). However, countries need to pre-register for these programs, based on having a strong policy framework in place and a good track record in economic performance.”
