Basic Overview of the G20 Part II:
Part II:
Table of Contents
1. What is the G20?
2. The History of Capitalism and the G7/G20
1) The birth and background of the G7
2) The structure and role of the G7
3) The Asian financial crisis and the birth of the G20
3. The Economic Crisis and the G20
1) The 2008-2009 economic crisis
2) What has the G20 done?
Part II:
4. Main Issues
1) So, is the G20 a decent institution?
2) How should we understand financial regulation?
5. What Should be our Goals in Protesting the G20?
1) A fight against the Lee Myung-bak administration
2) Refusal to pay for capital's crisis and a struggle against complex crises
3) A movement for a new world
4. Main Issues
1) So, is the G20 a decent institution?
-There are some who say that the G20 is more inclusive than past international institutions, which have been dominated by a few powerful countries. Therefore, they say, we should adopt an stance critical engagement with the G20, not direct opposition. Is this the right strategy?
-No. The G20 is fundamentally unrepresentative, illegitimate, and undemocratic. It is unrepresentative because, as a group of only 20 countries chosen based on the size of their economy, there is no way it can represent the interests of the 190 countries of the world. It is illegitimate because the countries that dominate it are the ones responsible for forcing neoliberal policies and creed on people around the world and, in so doing, creating the global economic crisis. It is undemocratic because participation in meetings is closed to non-members and meeting proceedings are not made public.
-Like the G8, the G20 has no basis in international law. There is no clear standard for why it includes 20 countries. Rather, the 12 emerging economies chosen were included based on the size of their economies and geopolitical factors at the end of a two-year period of trial and error. The G7 made the final decision on who would be invite in and who left out.
-It is true that some developing countries are now participating in the G20, but most of them are the 'strong men' in their respective regions and, as such, are supporters of the U.S.-centered world order. There is no means for the 170 countries excluded from the G20 to voice their opinions or have their interests represented.
*The need of an open democratic framework
-These problems are the reason that 900 social movement organizations in 115 countries, including Jubilee South, ATTAC (Association for the Taxation of Financial Transactions for the Aid of Citizens) , and others signed onto a 'Statement on the proposed 'Global Summit' to Reform the International Financial System.' This statement calls for a new framework for discussing alternative ways to solve the current economic crisis, one that protects democratic participation and debate. These organizations propose that an international conference convened by the United Nations replace the G20 as the body for discussing reform of the international economic system.
-While the UN clearly has is own historical and structural limitations, the fact that hundreds of organizations signed this statement demonstrates widespread recognition of the G20's fundamentally problematic nature. The simple question posed by Filipino alterglobalization activist Walden Bello--'Who gave them the authority to solve this crisis?'--speaks to the same recognition. Anti-G20 struggles are being carried out around the world based on this understanding.
*An internationalist perspective
-The inclusion of South Korea and a few other developing countries in the G20 does not in anyway alter the G20's basic nature. The G20 must be understood from a perspective that prioritizes the universal rights of people all over the world, not from the perspective of national self-interest. From this perspective, it is clear that a new democratic framework is needed to replace the G20. This new framework should centralize the needs of the people of the global South who have historically been victims of capitalist plunder, not of countries of the North, which have built their wealth through histories of imperialism, and which are responsible for the current crisis.
2) How should we understand financial regulation?
-From its first Summit on, the G20 has been promising stricter financial regulation. Unfortunately, after two years, it has shown little by way of results. Therefore, social movement organizations around the world have been calling for stronger controls on financial capital than those being discussed at the G20.
*ATTAC's demands
-In December 2010, the ATTAC released as statement entitled, 'The time has come. Let's shut down the Financial Casino: ATTAC's Statement on the Financial Crisis and Democratic Alternatives.' The statement includes the following four demands: 1) creation of a new democratic global economic order; 2) end to the dominance of financial capital and that the real economy and social needs be put first; 3) that those responsible for the economic crisis pay for its cost; 4) introduction of policies for controlling finance through reform of central parts of the financial system.
*Other demands being made
-The financial regulations being pursued by the G20 cover only a very small part of only the fourth of these demands. They are clearly insufficient to bring about substantial change to the current economic order out of which the crisis developed. As such, social movement actors have been making demands that each of the reforms being discussed by the G20 be notched up a level. For example, demands are being made that hedge funds and private equity funds be required to reveal to the public the exact portfolios and extent of leverage of the assets they have invested. Demands are also being made that the system for regulating financial commodities be changed from a negative system (listing only the types of commodities prohibited) to a positive system (listing all commodities that are allowed) so that each new financial commodity with be clearly brought under public supervision. And, demands are being made that tax havens for speculative capital and offshore financing centers be completely abolished.
*Financial Transaction Tax
-Another demand that has gotten significant attention is that for a tax on all financial transactions (called the Robin Hood tax or the financial transaction tax) . The financial transaction tax is an expansion of the Tobin tax proposal, which involves a tax on foreign exchange transactions. The financial transaction tax would be a levy of 0.001% ~ 0.05% on all financial transactions, including those involving stocks, bonds, and foreign exchange. Proponents of the Robin Hood Tax believe that the principle of taxing the profits made on commodity transactions should be applied to the financial sector without exception. They hope that such a tax would reduce the scale of short-term financial transactions. Moreover, they are calling for a fixed amount of the massive resources procured through this tax to be used to battle climate change and contribute to the development of impoverished countries--hence the name, 'Robin Hood Tax'.
*The need for comprehensive change
-How should we view these various demands for stricter financial regulations? Simply put, they are needed, but they are nowhere near enough. The majority of these demands are asking for only micro-level changes. They do not address most of ATTAC's demands, namely the call for a new framework to replace the G20, for putting social needs and the real economy before financial capital's profits, and to make those responsible pay for the crisis. In terms of the fourth call for fundamental policy reform to control the power of finance, this can be achieved through the introduction of a financial transaction tax if it is coupled with prohibitions on Large and Complex Financial Institutions [LCFIs], prohibition on privatization of public enterprises and pensions, and a transformation of distributive policy.
-The strategy of critically engaging with the G20 amounts to using lobbying tactics to get the reform measures being proposed within the G20 made a little but stronger, or getting one or two policies, such as the financial transaction tax, added. This strategy does not make fundamental systemic transformation possible.
*How can we bring about real change?
-It is not possible to truly constrain the power of financial capital with a piecemeal approach. Because the opinion of each country is different and financial capital is still powerful, reform policies discussed within the G20 necessarily get distorted in the process of trying to mediate competing interests. The G20, which is linked to the interests of the U.S. and European powers, and through them to the interests of financial capital, has no reason to promote real change. Without a complete change of direction based on agreement about the need to root out neoliberalism and financial globalization, individual policy reforms cannot be effectively implemented. Therefore efforts that focus on the possibility of implementing micro-level policy reforms will have a very difficult time even achieving their stated goals. Beyond this issue however, is the problem of seeing limited financial regulation as an end in itself, rather than as one step in a larger process of transformation. We need use the fight for financial regulation as a means through which to expose the essence of neoliberalism and create the force necessary to propel a movement for an alternative to global capitalism--an alterglobalization movement. Therefore, we must frame demands for thorough financial regulation within the context of wider demands for systemic change.
5. What Should be our Goals in Protesting the G20?
1) A fight against the Lee Myung-bak administration
-The Lee Myung-bak administration has painted South Korea's holding of the G20 Summit as a 'great diplomatic feat' and 'splendid occasion' for the nation. The government is now even carrying out a campaign to get Korean people to adopted the proper 'etiquette' while the Summit is going on. What should we make of these propaganda efforts?
*Is South Korea's winning the chairmanship of the next G20 Summit a 'great diplomatic feat' of the MB administration?
-There are essentially two reasons why South Korea is getting to hold the G20 Summit. First, it was South Korea's turn, by rotation, to chair the upcoming G20 Meeting of Financial Ministers and Central Bank Governors. Last year the U.K. got to host the G20 Summit for the same reason. Even more important than this, however, is the position South Korea occupies within the G20. South Korea plays the role of the 'model developing nation', which faithfully represents the position of advanced countries, led by the U.S. From the perspective of dominant countries, South Korea, which has on its own adopted free trade principles and sings the praise of capitalist development, is very welcomed in comparison to the countries of the global south and social movement forces who are annoyingly criticizing the inequality inherent in the current system. From there perspective, South Korea is very symbolically important.
*The destruction of civil and democratic rights
Civil and democratic rights are being destroyed under the guise of the G20. The Lee Myung-bak administration is using the G20 as an excuse to carry out widespread crackdowns against migrant workers, street vendors, and homeless people. Government discourse paints undocumented migrant workers as potential terrorists who threaten the safety of international meetings, and street vendors and homeless people as defiling Seoul's streets. In addition, the government has passed a 'Special Law on the Safe Escort of the G20 Summit', which allows the Blue House Minster of Escort to establish areas in which demonstrations are completely prohibited at will, and even permits the mobilization of the army to put down dissent.
-Such measures are being implemented far beyond South Korea as well. The G20 is acting as a strong force of repression against democratic rights and social movements around the world. Each of the four G20 Summits held in the last two years stimulated critique and protest. In response, the governments of the countries hosting the meetings enacted measure that restricted people's rights to express their opinion and violently put down protests. The G20 Summit held in Toronto, Canada, last June is case in point. The Canadian government erected a 3-meter high wall of concrete and iron around the meeting site, and mobilized 20 thousand police, who indiscriminately arrest 600 protestors while firing tear gas canisters and rubber bullets randomly.
-These acts of repression are starting to set a new standard. Similar measures occur around every international meeting and are becoming more and more frequent. In the end, even the basic concepts of civil rights and democracy are being destroyed. This problem is spreading around the world through the mechanism of international meetings.
-The Lee Myung-bak administration sees the G20 as its main project for the second half of the year. If we are going to send a message of warning that we will not tolerate violations of civil and democratic rights and put a stop to MB's violence, we have to be prepared for mass struggle at the time of the G20 Summit.
2) Refusal to pay for capital's crisis and a struggle against complex crises
*The crisis has not ended
-The economic crisis has not ended. Countries around the world have been implementing fiscal and monetary policies in attempts to get past the crisis. In this process, common people have been forced to pay most of the costs. The principle of 'privatization of profits, socialization of loss' is being put into practice over and over again.
-Despite all the money we have shelled out, doubt remain as to whether all the speculative bubbles have been extinguished and all the bad assets of financial institutions have been disposed. In addition, some countries, particularly developing countries in Europe, are facing continued crises perpetuated by excessive spending and trade deficits.
-It is highly likely that the fiscal crises now faced by countries who spent heavily in their efforts to overcome the global economic crisis will get worse. In addition, warnings that economic stagnation could return in the form of a 'double dip' are growing stronger. This is because recovery in the real economy is being retarded by the fact that high levels of debt-driven consumption are now no longer an option.
*Complex social crises growing more severe
-The problems of poverty, climate change, energy, and agricultural are also getting more severe. Although the threat of climate change grows more severe every day, no party has yet stepped forward to offer a sincere solution. Air pollution and global warming due to fossil fuels are getting worse, yet the transition to environmentally-friendly renewable energy is proceeding at a snail's pace. Small farmers and their families are dying due to the unsustainable practices of corporate agriculture, and the price of cereals is rising due to commodity and fuel speculation. Economic growth has become detached from employment, such that unemployment is increasing, while labor unions and labor rights are under attack. Inequality and poverty rates remain as high as ever and are even rising in some areas. These problems only stand to worsen amidst continuing economic crisis unless assertive solutions are found.
*Refusal to pay for capital's crisis
-Economic and social crises have very uneven effects depending on region and class. Groups that do not have the resources to respond to crises are the ones who are victimized the most. This is not the only problem. The cases where policies implemented as 'solutions' to the crisis only exacerbate these geographic and class inequalities are numerous. Those who are responsible for creating the crisis are the ones who should pay for it. It is essential that a proper solution to the crisis be implemented immediately.
-We need a movement that opposes the privatization of profit and the socialization of loss. When capital makes massive profits through risky speculation, it keeps all those profits for itself. On the other hand, when a problem arises, workers are laid off and wages are cut, while tax payers' money goes to save corporations. The case of Ssangyong Motors in South Korea is typical. Our movement must be able to expose this pattern of pushing the burden onto common people and to stop it.
*A struggle against structural adjustment and the diminishing of social welfare
-Our movement must fight against structural adjustment in the public sector and the reduction of social welfare. Since they have spent vast amounts of money to support corporations, many countries are now saying its time for austerity measures. At the Toronto G20 meeting in June, heads of state agreed to a basic framework for austerity measures. Most austerity measure result in an attack on workers in the public sector and diminishing of social welfare. At the same time, tax cuts to the rich are further reducing revenues. The Lee Myung-bak administration's plan for 'advancement of the pubic sector', which involves unilateral cancellation of collective bargaining agreements and structural adjustment, is an efforts to facilitate these measures. Fiscal health needs to be achieved through heavy increase in taxes on the rich and corporations.
*A struggle to protect labor rights
-Our movement has to stand up to the destruction of labor rights and the flexibilization of labor. All over, the economic crisis is being used as a pretext for cutting wages and weakening labor standards. The G20 has agreed that the economic crisis should not be an excuse for destroying labor rights, but this is nothing but talk. In countries around the world, workers are under attack and labor flexibilization is become more severe. In South Korea, the Lee Myung-bak administration is using such tactics as non-recognition of unions, the time-off system, and the cancellation of collective bargaining agreements in an attempt to annihilate the labor movement. The government is also pushing forth new labor flexibilization policies including the expansion of agency work and introduction of a flexible work-time system. It is essential that workers come out in force for the worker's day demonstrations (November 6-7) and to protest the G20.
*-A struggle against interrelated social crisis
Our movement also has put an end to governments' avoidance of multiple social problems such as climate change and poverty, and demand real solutions. The G20 has said it would promote development in poor countries, work on the issue of climate change, and abolish fossil fuel subsidies, but it is in fact taking a passive attitude towards these problems. We cannot rest our hopes on the G20. We must come up with real solutions our selves. We must make our struggle a fight for complete forgiveness of foreign debts, massive funding towards the abolition of poverty, direct reduction of greenhouse gases, and general use of renewable energy sources.
3) A Movement for a New World
-The continuing crisis brings with it a clear message: It is time for a new world!
*The alterglobalization movement
-During the past ten years a movement against neoliberal globalization has developed. This movement has grown from being simply a negative 'anti-globalization' movement into a positive 'alterglobalization' movement. The alterglobalization movement must have following characteristics:
1) The movement is based on the principle of people's rights and self-determined action. The movement is working to define concrete people's rights as a way to move past the fallacy of international economic organization's call for 'globalization with a human face' and the conservative and regressive elements of anti-globalization discourse. Instead, the movement seeks to eliminate the cause of people's alienation from one another in the midst of globalization and create the conditions necessary for the fulfillment of mutual and expansive rights. The movement also prioritizes the achievement of alterglobalization goals through people's self-determined action.
2) The movement seeks the development of revolutionary strategy and demands necessary for collective struggle against financial globalization. These strategy and demands cover the political, economic, and social arenas. For example, in the face of foreign debts crises in peripheral and newly industrialized nations, the movement demanded the dismantling (or fundamental transformation) of international financial and trade institutions, forgiveness of the foreign debt of third world countries, and a financial transaction tax as a means for controlling capital. The farmers' movement, one of the most active forces among global social movements, is currently carrying out a struggle for food sovereignty (meaning not simply national self-sufficiency in food production, but also farmers' rights to land, biological diversity, genetic resources, and agricultural knowledge) , land reform, and the introduction of a new agricultural model. Women in the alterglobalization movement are developing demands and a struggle against the femanization of poverty and increasing violence against women caused by globalization.
3) The movement emphasizes solidarity between national groups and communities that have been historically and geographically divided. It rejects the world vision produced through western imperialism and seeks to replace it with an internationalist perspective. It actively seeks a framework for communication and solidarity between diverse areas and social movements.
*The anti-G20 struggle
-The struggle against the G20 for the last two years can be seen as generally fitting into the alterglobalization framework.
-The future depends on our ability to create and strengthen a movement that dreams of a new world. Let us fight for this new world. Toojeng!