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Towards an Economic System That Works for People and the Planet

A civil society statement on the G20 summit from IPS Director John Cavanagh and coalition members.

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Rich world leaders and institutions not only promoted the frenzy of deregulation and privatization in their own countries, but pushed it on developing countries through aid and loan conditionality. As they mobilize trillions of dollars to clean up the mess at home, they must do their fair share to redress the devastating impacts of their mistakes on the South. This should include cancellation of all unsustainable and illegitimate debts claimed from countries of the South and restitution and restoration of the social and ecological debts owed to peoples of the South. These resources, together with the rapid and full disbursement of previously scheduled aid increases, should be provided free of macroeconomic and structural conditions. The right of all countries to define their own paths toward sustainable and healthy economies must be respected. The onerous conditions attached to existing aid, loan, and debt-reduction programs should be removed before they do further damage.

3. Curb the power of the IMF, World Bank, and WTO: The present crisis has again demonstrated how we are all impacted by three powerful global institutions whose policies have been instrumental in its creation: the IMF, World Bank, and the WTO. Nonetheless, much of the current debate among financial institutions and governments involves giving them enhanced roles. The WTO, for example, continues to press for further deregulation and privatization of the financial sector, principally through its General Agreement on Trade in Services. For individual countries and the global community to adopt critical new regulations of the financial sector, not only should the WTO's current Doha Round be suspended, but also existing WTO rules constraining regulation of financial services should be rolled back. Likewise, efforts by the IMF and World Bank to expand their influence as a result of the financial, climate, energy and food crises should be rejected. Furthermore, global, regional and national economic governance institutions must be democratic and accountable to the women and men they are supposed to serve.

4. Regulate the global economy effectively: Governments should take immediate action to develop a new international regulatory architecture with democratic checks and balances that is aimed at promoting the interests of workers, small-hold farmers, consumers, and the environment and preventing future financial crises; the United Nations should play a central role in its development. This should cover not just banks but also the parallel and under-regulated financial system, including hedge funds and private equity funds. Some first steps should include regulating derivatives, stopping speculation on staple food commodities, applying stricter international capital reserve requirements, a speculation tax on international transactions, closing tax havens, and stronger transparency rules. Governments will also need to renegotiate the dozens of free-trade agreements and bilateral investment treaties that currently ban governments from placing controls on capital flows and applying other sensible conditions to foreign investment and other financial transactions.

Such steps are possible and many more will be needed to build a truly just global economic system that works for people everywhere, local communities, and the environment. This is the change that the world needs and for which we will continue to struggle.

Signatories (526 total: 211 organizations from 52 countries and 315 individuals):

International and Regional Organizations (10)

1. ActionAid International, Johannesburg, South

2. Africa

3. Africa Jubilee South

4. CADTM International Network (Com. para la Anulación de la Deuda)

5. Comité Ejecutivo Regional Asamblea de los Pueblos del Caribe

6. European Solidarity Towards Equal Participation (EUROSTEP)

7. Jubilee South

8. JUBILEO SUR / AMÉRICAS

9. Social Watch

10. South Asia Alliance for Poverty Eradication (SAAPE)