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G-20 Reflections from Cannes

By richard - Posted on 16 November 2011

Read Tony Clarke's reflections on G-20 activities in Cannes

Polaris Institute Director Tony Clarke was recently in France for the G-20 meetings and has prepared a series of reflections on the state of the G-20, the global economy and the continued role of civil society.

Read Tony's reflections here

The following is an excerpt from the conclusion:

...these are some initial reflections arising out of the various activities that took place in conjunction with the latest G20 summit. Indeed, the G20 Summit in Cannes may well serve to mark a moment in time when the world seemed to turn upside down. In particular, this was vividly illustrated by two incidents which, in retrospect, have some profound implications for both the model of the global economy and democratic governance.

The first occurred during the Summit when euro-zone leaders turned to China and asked for financial support that appeared to be something resembling foreign aid assistance. In response, Li Daokui, an advisor to China’s central bank, reportedly told the G20 leaders: “You are the rich, you borrow money from the poor.” He went on to admonish them saying: “It’s not right for you to continue to lead a luxurious life.” While Li Daokui’s comments were largely ignored by the media, they were highly poignant. After all, not only was the G20 formed in part because it was the new emerging economies, rather than the industrialized economies, that had the foreign exchange reserves required to get out of the 2008 financial crisis, but also the luxurious life style of the industrialized economies is simply no longer sustainable.

The second occurred in the immediate aftermath of the G20 Summit when the elected prime ministers of both Greece and Italy resigned their positions and handed over power to so-called ‘technocratic’ governments. Even though both Greek Prime Minister George Papandreou and Italian Prime Minister Silvio Berlusconi were elected comfortably in parliamentary polls and were never defeated by any parliamentary vote of confidence, and regardless of how poorly they may have fared in office, they were both ousted and replaced by unelected ex-central bankers and former executives of hedge funds and investment banks. In effect, it is financiers who will rule directly over the lives of the Italian and Greek people, imposing austerity medicine in order to calm and stabilize international money markets. While these moves may achieve greater stability in global markets, they set a dangerous precedent for the future of democratic governance in the global economy.

These developments deserve much closer scrutiny by civil society groups between now and the next G20 in Mexico.

G20CrisisofGlobalEconomicGovernance.pdf80.64 KB