G20 must look beyond growth to help poor and create new Seoul development consensus

By Oxfam

Washington, DC – International humanitarian organization Oxfam America called on the G20 to step up and provide the leadership that the world needs to overcome the continued interlinked threats of economic, food, and climate crises.

In a new briefing paper (attached), Oxfam urged the G20 to agree to a historic new Seoul development consensus, but cautioned that focusing on growth only is not sufficient to lift poor people out of poverty. G20 officials are meeting in Seoul, South Korea at the end of the week to lay the foundations of the G20’s approach to development ahead of the Heads of State summit next month.

“The establishment of the G20 was an extraordinary achievement, but its record so far has been mixed,” said Gawain Kripke, Oxfam America’s policy director. “The G20 is no longer the new kid on the block. A Seoul development consensus for a long-term development agenda would mark a turning point for the G20’s role, from crisis response to that of providing long-term leadership to overcome the biggest challenges facing the global community today.”

The Oxfam paper shows that people living in extreme poverty largely missed out on the benefits of growth in the last two decades of the 20th Century. The poorest received only 1.5% of the $1.9 trillion additional global gross domestic product (GDP) even though they accounted for a third of the world’s population at the start of the period. Today, the poorest 40% get just 5% of the world’s income. This is compounded by the fact that the poorest have been hit hard by the recent global slump, with the World Bank estimating that 64 million have been pushed into poverty by the crisis. Poor governments are suffering a $65 billion fiscal hole, forcing them to make cuts to health, education and agriculture spending.

“Economic growth is vital to help poor people escape poverty, but history teaches us that it is not enough on its own, said Kripke. “We need to see a new Seoul Consensus that not only drives economic growth but is sustainable and ensures the poorest receive a fair share of the benefits.”

Oxfam used the example of the G20 host country, South Korea, to challenge leaders to preach what they have practiced.  Half a century ago, South Korea’s annual per capita income was just $82, less than half that of Ghana at the time. Today, however, it stands at $19,000 – an astonishing 200-fold increase. Ironically, some crucial policies that allowed South Korea and other Asian ‘tigers’ to roar are missing from those now being prescribed by the G20.

Grasping and managing the challenges of growth in a new era of resource constraints is crucial for a new G20 development consensus, according to Oxfam. This includes protecting poor people’s access to land and water vital for growing food in the face of a growing number of international land acquisitions and doing more to achieve the fair trade rules the Doha round of negotiations promised but has failed to deliver.  In the face of climate change, Oxfam urged the G20 to raise the current level of ambition, strengthening the global political commitment to action and securing the binding treaty the planet urgently needs.

Oxfam is calling on G20 countries to meet their existing promises to increase overseas aid and ensure that investment in agriculture, free health care and education are stepped up, not reduced in response to the economic crisis. Oxfam also urged the G20 to introduce a financial transaction tax on the banks, hedge funds and other institutions whose greed did so much to cause the economic crisis.

“There is still no clear evidence that the G20 can develop and deliver lasting global solutions to global problems,” said Kripke. “If the G20 is the pre-eminent global economic body, then it has to act on issues beyond the immediate pre-occupations of its members and begin addressing global challenges. Doing so would give the G20 much-needed credibility.”

To read the Briefing Note, go here.

 

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