Family portrait of G20 leaders during the G20 Summit in Antalya, Turkey. (Photo: GCIS, Government of South Africa)
G20 almost rises to the challenge of the next global recession
The G20 summit in Antalya, on Turkey’s southern, Mediterranean coast, ended today with a communique that almost rises to the challenge facing the global economy. The main headlines are about terrorism and the refugee crisis, hardly surprising given the events in Paris and Antalya’s proximity to the Turkish border with Syria.
But the work of the G20 is and always has been primarily economic – forged in responding to the global financial crisis of 2008/9. At that point, the G20 managed to stave off a global depression, but conservative forces took over so that by 2010 economic orthodoxy had been restored and the G20 provided intellectual cover for the austerity that has prolonged and in some cases caused recessions. That orthodoxy has kept what recovery there has been weak and ineffectual, and has created the conditions for a possible further global recession next year, according to the ILO.
The G20 could not fail to recognise the gathering clouds, especially in emerging economies like Turkey’s, although it failed to acknowledge the scale of the problem. John Evans, the General Secretary of the Trade Union Advisory Committee to the OECD, commented that:
“The G20 is off target to meet the 2% extra growth target made last year in Brisbane. The leaders talked of ‘sound economic policies’ but what is needed is a stimulus to public investment and wages of the bottom 40% of wage earners. The OECD, at the release of the most recent Economic Outlook one week ahead of the G20 Summit, has called for ‘collective action to increase public investment’ in Europe. But this has to be followed up by action by governments. The price of failure to act is the risk of a further recession.”
The communique talked the talk about inclusive growth, action plans to create jobs and raise wages, even social dialogue. The global unions welcomed the summit’s acceptance that inequality was a major obstacle to economic growth (I’ll write more about inequality tomorrow), and there is indeed a remarkably good passage in the main communique that builds on the Labour and Employment Ministers Meeting declaration in Ankara in September:
“We are committed to ensure that growth is inclusive, job-rich and benefits all segments of our societies. Rising inequalities in many countries may pose risks to social cohesion and the well-being of our citizens and can also have negative economic impact and hinder our objective to lift growth. A comprehensive and balanced set of economic, financial, labour, education and social policies will contribute to reducing inequalities. We endorse the Declaration of our Labour and Employment Ministers and commit to implementing its priorities to make labour markets more inclusive as outlined by the G20 Policy Priorities on Labour Income Share and Inequalities. We ask our Finance, and Labour and Employment Ministers to review our growth strategies and employment plans to strengthen our action against inequality and in support of inclusive growth. Recognizing that social dialogue is essential to advance our goals, we welcome the B20 and L20 joint statement on jobs, growth and decent work.”
Despite the Turkish Government’s track record of abusing workers’ and union rights, the Turkish G20 worked with trade unions in the twenty countries and ensured that the L20 that brings them all together had access to Ministerial meetings and space to argue the trade union case. An L20 meeting held on the two days before the summit – I was there representing the TUC – discussed the G20’s agenda and the L20 submission before a special session bringing together the L20, G20 leaders and the business community, or B20.
The L20 event heard from the B20 as well as representatives of civil society and women (C20 and W20) – the first time a W20 had been held – and the leaders of the ILO and OECD, Guy Ryder and Angel Gurria. We used our presence on the fringes of the summit to do last minute lobbying of the ‘sherpas’ who do the heavy lifting for the G20 leaders on the way to the summit (cute, eh?) so I took a delegation to meet Tom Scholar, the Cabinet Office official who led the UK team on behalf of Prime Minister David Cameron.
But the G20 failed to take the steps necessary to prevent the oncoming storm. Maybe it won’t take the action that’s needed until the Chinese G20 next year, when the worst has happened. Maybe it won’t. But if we are to escape what’s coming, then the G20 will need to rediscover what it did when it was created, and take co-ordinated action to restore demand and promote sustainable growth.