Two weeks ago marked the 4th anniversary of the G20 summit. The 20 countries that make up 85% of the world’s economy met to discuss the progress made since their last meeting in March. This meeting was headed by the President of the United States, Barack Obama, and featured finance ministers and central bank governors from countries like Canada, Japan, France and Germany. Amidst the walkouts, arguments and agreements, the group was able to get through many topics that affect all of us – like the environment, and of course, the recession.
While the September summit did have its dramatic areas, it was quiet in comparison to the summit that took place in London.
Earlier in the year, another set of tensions had brewed outside the doors of the summit. The G20 had met in London in March to find a way to combat the recession. Thousands of protesters had lined the streets to protest the meeting of the G20. There were several issues advocated for including anger over the recession and the job loss that came with it. Another reason for protests was over the believed neglect of countries who do not contribute a significant amount to the world’s economy.
Protesters believe the G20 countries are doing whatever they can to alleviate the effects of the global recession at the expense of human rights. The G20 did include a small focus on international development, and a consensus was reached to lower the debt of developing nations, and assist them during the pullout of the recession using the World Bank and International Monetary Fund (IMF). To accomplish this, the group agreed to give hundreds of billions of dollars to these institutions.
The World Bank and International Monetary Fund are two of the largest organizations who lend money to countries. While lending money, they encourage countries to integrate into the world economy. Often times the countries that need the money are undeveloped. It is a large risk for investors to give money to a country where they unsure what the results will be. Because these countries are undeveloped, they may lack successfully democratic leadership which provides stability making it hard to tell if the money loaned will be paid back.
To compensate for the high risk, these countries must take on reforms given to them by the World Bank and IMF. Considering that the money a country receives from the IMF or World Bank is a loan, the money paid back to these institutions does include a profit. Often times, the regulations are more than a country is able to establish. It can be seen as ironic that this would be the route policy makers at G20 have chosen to follow.
The focus of the G20 in this regard is controversial. From the viewpoint of some protesters, giving these institutions billions of dollars to loan will only increase the debt of the countries receiving it. Others think it’s a way to reintegrate and encourage the development of poorer nations.
What do you think? Is it a bad idea for the G20 to give the World Bank and IMF more money? Or were protesters out of line?
You can leave your thoughts via the comments section below, at the end of the post!
By Jessie Ampofo
Blog Writer 2009-2010, Change Tomorrows World
