ONE’s Analysis of the Outcomes of the G20 Pittsburgh Summit
29 September 2009
The Pittsburgh Summit on 25th September was another chance to highlight the need to bring Africa into the center of the global economic recovery. While the G20 agenda was primarily focussed on following up on financial system reforms from the London summit, they reaffirmed previous commitments that they have made to the poor. In addition, the leaders called on the World Bank to develop a new trust fund to support the new Food Security Initiative agreed at L’Aquila G8 Summit in July and agreed to review the capital needs of the multilateral development banks. However, on climate change, the G20 as a group failed to call for resources to help the poorest countries adapt to the harmful impacts of climate change, and tackle its causes, despite individual commitments by some G20 leaders to address this urgent need at the UN High Level Summit on Climate Change earlier in the week. A summary of the G20’s outcomes related to development is given below.
Perhaps the most significant development at this Summit is the announcement that the G20 will replace the G8 as the format to deliberate global economic issues. This is certainly a step forward in the inclusion of more of the global economy in major decisions. But it is unclear how Africans and the world’s poor will be a part of this new configuration.
- Resources for Multilateral Development Banks: The G20 importantly agreed to ensure that sufficient resources are available for developing countries through the World Bank and regional development banks (this includes the African Development Bank or AfDB). The AfDB has implemented the recommendation that it frontload grants and loans to support countries during this financial crisis. The frontloading of this countercyclical funding means that the AfDB has committed approximately 85% of its available funding and will has a significant funding shortfall by early next year. The G20 agreed to review the capital needs of these regional development banks in the first half of 2010. This review is welcome, but in order to be effective, the review must then be followed by quick action to provide the capital these banks need. Canada’s announcement of an additional $2.8 billion in loan guarantees to the AfDB is very encouraging.
- Agriculture: The G20 called on the World Bank to develop a new trust fund, as a way to implement the G8’s food security initiative announced at the L’Aquila Summit in Italy in July. This multilateral fund will support the set of principles championed by the White House to make aid for agriculture more effective, coordinated and geared towards the strategies developed by poor countries themselves,
- Climate Change: G20 failed to call for resources to help the poorest countries adapt to the harmful impacts of climate change, and tackle its causes.
- Millennium Development Goals (MDGs): The G20 reaffirmed its commitment to meet the MDGs including pledges of development assistance (including those made at the Gleneagles Summit), support for trade capacity building, and debt cancellation. The G20 noted a particular focus on sub-Saharan Africa.
- Reforms of International Financial Institutions: Commitments were made calling for the acceleration of the reform in order to give under-represented emerging markets and developing countries a more appropriate voice in the governance of the International Monetary Fund (IMF) and the World Bank. Although such reform is welcome, we must ensure that this will lead to an increase of African voices, rather than just those of emerging markets.
- Crisis Protection: The G20 asked their ministers to explore the benefits of a new crisis support facility in IDA to protect LICs from future crises.