Tag Archives: G20
G-20 Nations: Race to the Bottom will Continue

G-20 Nations: Race to the Bottom will Continue

I have been writing about the G20’s austerity plans for the past few weeks (here and here for example.  Well, it has been approved by the G20.

I’ll be writing more about the austerity and other G20 declarations tomorrow.

Here is Dawn Paley’s excellent piece on the Toronto declaration.  Read the original from Vancouver Media Coop here

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G-20 Nations: Race to the Bottom will Continue A critical analysis of the G-20’s Toronto Declaration

by DAWN PALEY
As the G-20 summit winds down behind the fences surrounding fortress Toronto, there are at least 560 folks in jail, and anyone left out on the streets is facing detentions, beatings, searches and arrests.

This is the context in which the Group of 20 gathered to write the Toronto Summit Declaration, a 27 page document released earlier this evening. An early critical reading of this text makes it evident that those who have taken great risk to mobilize against the G20 have done so on behalf of the health of communities, and the planet.

Because though the Toronto Declaration begins with a populist appeal to sustainability, job creation and financial regulation, it enshrines a commitment to force the poor and working class around the world to tighten their belts yet again as states implement strict new austerity programmes.

The Declaration proposes an ambitious new structural adjustment agenda, designed by the IMF and the World Bank, that aims to halve first world deficits by 2013.

Shoring up financial sector abuse of public funds is likely one of the most pressing concerns of publics, who have been denouncing the bank bail out all around the world. But the language in the Toronto Declaration does little to guarantee meaningful public oversight of the financial sector.

The Declaration welcomes the recently passed US Financial Reform Bill, which according to Newsweek “effectively annoints the existing banking elite,” without putting a cap on executive compensation. Nor does the bill crack down on the banks that are supposedly “too big to fail,” including J.P. Morgan, Goldman Sachs, Citigroup, Bank of America and Morgan Stanley.

Financial oversight will remain with elites, led by the IMF and other Multilatral Development Banks (like the Inter American Development Bank and the African Development Bank), which the declaration proposes should become “even stronger partners” in the future.

The Declaration indicates that G20 countries will pump $350 billion into Multilateral Development Banks, doubling their lending capacity, so that they can “focus on lifting the lives of the poor, underwriting growth, and addressing climate change and food security.”

The move towards putting MDBs on the front lines of global lending could be a response to the growing global rejection of International Financial Institutions like the World Bank and the International Monetary Fund. This shift is reminiscent of a move away from global trade and regional agreements like the Free Trade Area of the Americas and the World Trade Organization, and towards smaller regional deals and bilateral agreements.

The Toronto Declaration makes a point of noting that Haiti’s debt with International Financial Institutions will be cancelled, but avoids mention of the larger debt that the country owes to the Inter American Development Bank (IADB). Haiti owes less than $200 million to the World Bank and the IMF, while their outstanding debt to the IADB is upwards of $441 million. The IADB has also positioned itself to become the lead development bank behind the $10 billion reconstruction of the country.

In addition to an increased role for the IADB and other regional development banks, the Toronto Declaration promises more privatized “development financing” for low income countries. This could mean further subsidies for transnational corporations active in resource extraction and the maquila sector.

Language in the document around increasing global output, create tens of millions of jobs, and reduce global imbalances flies in the face of recommendations for countries with higher debt loads to continue a regulatory race to the bottom by “maintaining open markets and enhancing export competativeness.”

The Toronto Declaration also welcomed the launch of the Global Agriculture and Food Security Program, which proposes to create food soverignty between public and private partnerships. This flies in the face of demands from peasent groups, including Via Campesina, who stated at the end of 2009 that “The absence of the heads of state of the G8 countries has been one of the key causes of the dismal failure of [the November 2009 Food and Agriculture Summit]. Concrete measures were not taken to eradicate hunger, to stop the speculation on food or to hold back the expansion of agrofuels””

The Declaration asks that the OECD, the ILO, World Bank, and the WTO facilitate their version of events by having them “report on the benefits of trade liberalization for employment and growth” at their next meeting. States are cautioned to stick with World Trade Organization measures and avoid new “barriers to investment or trade in goods and services.” Items that potentially included among these barriers are new environmental legislation and new forms of taxation on corporate activity.

On the topic of climate change, G-20 countries that support Cophenhagen issued a weak call for other nations to “associate with it.”

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Democracy Now! on G20 Summit Toronto

Great G20 summit coverage!

Watch in full above (recommended!) or watch each part below:

1. Fortress Toronto: Massive Security Clampdown for G8/G20 Meetings Most Expensive in Canadian History – go to video

2. CODEPINK Activist Detained for Over 48 Hours at Canadian Border After Being Denied Entry to Canada – go to video

3. Indigenous Activists Protest G8/G20 Meetings in Toronto – go to video

4. Indigenous Leader Art Manuel: “Indigenous People Are the First Ones Impacted” by Western-Driven Resource Extraction – go to video

5. Indigenous Groups Lead Struggle Against Canada’s Tar Sandsgo to video

6. Canadian Activist Stefan Christoff Targeted by Government Surveillance, Harassment Ahead of G20 Summit – go to video

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G20 protest – 3 reasons

Three Reasons You Should Attend The G8/20 Protests

by Greg Shupak

If you are interested in social justice you should attend the protests that will take place in Toronto during the G20 Summit from June 25th-June 27th and in the days leading up to the arrival of twenty of the world’s “leaders.” Though I will present three reasons why you ought to be in the city as though they were separate, I want to stress that they’re intimately linked, cause and effect.  In no particular order:

1.The G8/20 proliferates war.

The G20 might properly be called an international arms dealers summit.  The Canada Peace Alliance notes that G20 countries are “responsible for more than 85 per cent of global military spending and 95 per cent of global arms production.”

According to Foreign Policy in Focus, five G20 countries (the United States, Russia, China, Japan, and South Korea) spent nearly $1 trillion in 2008 on the military but “for about one-tenth of this . . .we can achieve more genuine security by eliminating global starvation and malnutrition, educating every child on earth, making clean water and sanitation accessible for all, and reversing the global spread of AIDS and malaria.”

At home, meanwhile, the Harper government has committed Canada to spending $490 billion on the military over the next 20 years.  Think of that when you are told that there is not enough money around to fund your parents’ and grandparents’ pensions.  The consequence of these military build-ups is, predictably, death.  To give just two recent examples:  the New America Foundation notes that 871 Pakistanis were killed by American drones in Barack Obama’s first sixteen months as President; and in June 2009, NATO bombed civilian houses in Afghanistan’s Farah province killing more than 100 people.  If citizens of Western countries were killed at this rate we’d call it terrorism.

2.The G8/20 deepens poverty.

The G8/G20 decides the policies of the World Bank (WB) and the International Monetary Fund (IMF).  Under the guise of debt relief, these institutions provide loans to the Global South with conditions attached that, in collaboration with local elites, force these states to limit spending on health and education, to weaken labour and environmental laws, to produce cheap export goods for the Global North, to flood their own markets with goods from the North that make local production unprofitable, and to allow international corporations privileged access to national wealth.

This is done because it supposedly produces economic growth in the developing world.  Yet the economist Mark Weisbrot points out that over a twenty year period “of IMF and WB-directed reforms, the vast majority of low-and-middle-income countries have suffered a drastic slowdown in economic growth.”

Specific examples of the consequences of IMF and WB “reforms” are outlined in Mike Davis’ masterpiece Planet of Slums, including:  Ivory Coast, where urban poverty doubled in just two years; Nigeria, where extreme poverty went from 28 percent in 1980 to 66 percent in 1996; Mexico, where the percentage of the population living in extreme poverty rose from 16 percent in 1992 to 28 percent in 1999.

The UN’s Human Development Report 2004 notes that, in an era characterized by the implementation of WB and IMF prescriptions, “an unprecedented number of countries saw development slide backwards.  In 46 countries people are poorer today than in 1990.  In 25 countries more people are hungry today than a decade ago.”

Why would G8/20 leaders advocate such policies?

Because their result is that the world’s poorest nations end up subsidizing the richest.  Professor David Harvey points out that from 1980-2007 $4.6 trillion was transferred from the Global South to the Global North.  (Keep this in mind whenever some condescending politician in the developed world brags about how much “aid” his or her nation sends to less developed countries.)  Many in the Global North world who are unemployed, haemorrhaging student debt and/or are appalled by the federal government’s withdrawal of funding from the First Nations University of Canada might well wonder what happens to all the money the G8/20 obtains via grand larceny.

3.The G8/20 is undemocratic.

Reasons one and two are among the best arguments I can think of for economic democracy and community self-management.  The G20, however, is wildly undemocratic.  The summit’s webpage notes that “Although participation in the meetings is reserved for members, the public is informed about what was discussed and agreed immediately after the meeting of ministers and governors has ended.” In other words, the meetings are held in secret and once our sage mandarins have decided what is best for us they will tell us what they think we ought to know.

While G20 governance over the Global North is undemocratic, its rule over the Global South is downright neo-colonial.  Though the G20 does include a few less developed countries, unlike the G8, the Alberta Council for Global Cooperation notes that “the G20 functions mostly as a sounding board” for the G8 and “does little to alter the elite nature of the G8.” This is what plutocracy looks like.

There are many equally important reasons to protest the summit that I haven’t mentioned so I’d encourage everybody to investigate the relationship between G20 policies and issues such as environmental degradation, First Nations sovereignty and global gender inequity.

I encourage everyone to visit the website of The Toronto Community Mobilization Network (TCMN)* for details on demonstration times and locations and to come on out.  We have a world to win.

*I am based in Guelph, Ontario, where I do most of my activism, and should note that I am not directly affiliated with the TCMN and do not speak on their behalf.

Greg Shupak is a writer, activist and PhD student in Guelph, Ontario.  Versions of this article have appeared in The Ontarion and The Peak.

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Bank tax & the G20 [Part II]: Canada’s ‘responsible’ banks

Bank tax & the G20 [Part II]: Canada’s ‘responsible’ banks

[continued from Part I]

[PDF of full article]

Is Canada really an inspiration for the world’s troubled banks?

A great deal of Canada’s authority on these bank tax issues is based on the perception that the country’s traditional banking sector was able to withstand the financial crisis. The historical record is murkier – there is much more to the story than mainstream media accolades of bank prudence and wise Conservative government policy.

In the late 1990s (and again in the early part of the new millennium) the five Canadian banks aimed to merge into three institutions to obtain the capital base to compete internationally with banks such as Citigroup, UBS, and Royal Bank of Scotland. They hoped to enter the “major leagues” of investment banking and non-traditional speculative banking: the very markets that were at the heart of the crash. The banks were unsuccessful in their quest, as the Canadian government blocked the mergers.

Many critics have argued (here and here, for example) that it was not a prudent fear of systemic risk, or the Liberal government’s foresight that stopped the mergers. Rather, it was news of the banks’ ambitions and public outcry about branch layoffs and closures and increased service charges that forced the Canadian government’s hand, pushing it to block the banks from joining together. Canadian financial elites and the business class harshly criticized the government.

Yet it may have been fortunate for bankers, and the current government, that the Canadian public was not swayed. Otherwise, Canadian banks likely would have needed a US or UK style bailout in the 2008 crisis.

According to political commentator Murray Dobbin, the current Conservative government actually has offered a great deal of money to banks in the past two years, and he questions whether this was a form of bailout in itself. The Canadian government spent $70 billion to buy up risky mortgages from the big five banks (Dobbin wonders, if Canadian banks are so wonderful, why does the government need to buy these mortgages?), created a $200 billion fund called the Emergency Finance Framework to insure banks when they need it, and currently ensures 100% of all mortgages through the Canadian Mortgage and Housing Corporation – eliminating risk for banks.

The fiscally sound Canadian bank appears to be more fable than fact.

US position key

Unsurprisingly, the US position leading up to the June G20 meetings is likely to be a major determinant of the success or failure of the G20 bank tax talks. The enormous US bank bailouts have made it difficult for the US government to point to their strong financial sector as a reason to oppose bank taxes. Nevertheless, the US, ever averse to taxation of any kind, has also come out strongly against the Tobin tax and has reacted ambiguously to the idea of an international bank levy.

On the other hand, the Obama administration has made public statements over the last few months about a domestic bank levy proposal. This may lead the US to be more open to an international levy given that it would shield them from capital flight if all nations bought in.

Conclusion: is consensus on a bank tax possible at the G20?

Because consensus is required for G20 policy decisions, the growing Atlantic divide leaves any tax or levy plans up in the air. Meanwhile, the positions of the other 15 G20 countries are still being developed and do not seem to be getting much attention from the major players.

Though tax watching might seem like a dull sport, it is worth observing the developments both during Harper’s trip to Europe this week and this June at the G20 summit. The European powers backing these taxes have been shaken by the crisis and pressured by their electorate to do something about the banks. The taxes are not radical solutions to more fundamental systemic problems, but at least they point in the right direction: towards the banks.

—–

Darren Puscas is the editor of the G20 newsblog www.g20breakdown.com. He is currently a researcher on a multi-country project on women and unionization at McMaster University in Hamilton, Ontario. He lives in downtown Toronto, not far from the summit fence.

[This is an updated version of a bank tax backgrounder that first appeared in The Dominion in its Special Issue on the G8/G20]

–> Further information on the bank tax at G20 Breakdown

–> Plug-in to the campaign against the tax

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University of Toronto closes for G20 summit

University of Toronto closes for G20 summit

The University of Toronto has decided it will close for 4 days during the G20 summit.   The school is 15-20 blocks of dense city from the G20 meetings. They are saying the closure is because the G20 ‘designated speech’ march will be ending couple of blocks away at Queen’s park.  Hyper-sensitive?  Overreaction? What is the labour and community march going to do that is such a threat to the University (especially for 4 days!)

Looks like U of T students will have to go out to the marches now – they’re both pissed off and have the free time!

It makes you wonder what the University is really doing.  Maybe they are giving up the space to G20 security so they cast an even wider net.

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