G-7 / G-8 : Fifteen years is enough
15 years after leaders of the world's major economies met in Halifax, they'll be heading back to Canada this summer, and yet again economic crisis tops the agenda. Here's a little pre-summit reading that might help them identify lasting solutions rather than the usual patch-up-and-mend measures.
Back in 1995 the by-line for the G-7 summit in Halifax was 'a time of change and opportunity', but the circumstances were dire: mounting deficits and indebtedness in developing countries; weak recovery in Mexico after its dramatic economic collapse; rapidly increasing inequality and no evidence that 'trickle-down' economics were having any effect; rising civil society concern that the 'Washington Consensus' had failed to deliver on its promises and the international financial institutions were too fixated on economic liberalism and were forcing one-size-fits-all policies that patently ignored the differing circumstances of diverse countries in Africa, Asia and Latin America.
15 years on global circumstances have deteriorated dramatically. Financial crises in the late 1990s were followed by market crashes in North America and Europe, which in turn were followed by speculative booms that culminated in the extraordinary financial market collapses of 2007-09. G-7 morphed into G-8, and has now been eclipsed by G-20, but the dithering continues and while the vocabulary of the political bla-bla has adapted slightly to public concern, the reality at the political level is that neither the World Bank nor the International Monetary Fund have shifted their agenda or their policy prescriptions. Worse, the massive fiscal stimuli that kept the financial markets on life support throughout 2009 and beyond have boosted the G-8 economies sufficiently to remove the pressure for immediate reform, and with important elections in UK and USA in 2010 there's little likelihood that urgently needed reforms will happen. Not unless civil society takes the lead and forces reform onto the agenda.
15 years after the G-7 summit in Halifax, both G-8 and G-20 will be meeting in Canada this year, this time in Toronto. In the intervening period civil society has delved deeply into the roots of the economic crises of the past 30 years and, going against the grain of the 'There Is No Alternative' claims of the orthodox economists, is now advancing an increasingly detailed agenda for comprehensive reform of the global financial architecture and the policy prescriptions of the Washington Consensus.
In the run-up to G-8 /G-20 2010, the Halifax Initiative, an organisation created in response to the patent inadequacies of the 1995 G-7 summit, has published a report, Fifteen years is enough, which traces the roots of the global crisis and outlines serious policy solutions. Issues covered include:
- The place of the dollar in the global economy, and the move towards a new global reserve system;
- The challenge to conditionality in the context of policy prescriptions that exacerbate the impact of the crisis;
- Truly sustainable responses to debt, in the context of a looming debt crisis; and
- Tax justice in development, in the wake of a growing global movement challenging tax havens.