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01 SEP 2016

G20 faces big test in China about its effectiveness

This year’s G20 Summit will raise the stakes for the group to prove itself against growing doubts about its effectiveness – not least for people living in poverty, says Oxfam.

The G20 meets in Hangzhou, China from September 4-5 amid a sluggish and uncertain global economy, spiralling inequality that threatens the otherwise successful fight against extreme global poverty, and two worsening human crises – global displacement and record-breaking climate change – that each carry massive economic threats too.

This year’s G20 will focus on ‘innovation-driven’ development and to include all member countries.

Oxfam G20 lead Steve Price-Thomas said: ‘They want to separate economic issues from security concerns, which will be difficult. It will be doubly hard to get over 20 different nations cooperating at a time when many are turning inward and becoming surly, or even pursuing economic policies that are contradictory with one another.’

Taxation will remain a key G20 issue, part of a series of reforms to make economic governance more balanced, reliable and effective.

‘G20 nations must make it clear that they will work together to dismantle tax havens and halt harmful tax competition. Without fair and transparent tax rules, the “wealth grab” by the rich and powerful will become even more outrageous and threaten future prosperity for all,’ Price-Thomas said.

Millions of people will be anxious, Oxfam warns, to hear the G20’s take on climate change. NASA says that each consecutive month so far in 2016 has broken its own ‘hottest ever’ record since monitoring began in 1880. Oxfam works with people around the world, particularly in farming communities, who are facing problems to the point of hunger and ruin from crop failures.

‘The world is literally roasting, and driving bigger and more destructive hunger crises like El Nino,’ said Price-Thomas. ‘The G20 members are responsible for 74 per cent of the world’s greenhouse gas emissions and so they must go at a much quicker pace in search of clean energy alternatives and to provide more money to help poorer countries cope.’

This year’s G20 also wants to encourage support for multilateral development banks, especially for infrastructure and industrial investment in Africa. This is being strongly backed by the influential B20, the business grouping of G20 countries.

‘Oxfam will look at this issue with wary interest. Development investment is something that has helped lift millions of people out of poverty and of course we encourage that, especially with the emergence of the US$100-billion Chinese-led Asian Infrastructure Investment Bank,’ Price-Thomas said.

However, in the past year Oxfam has exposed the World Bank Group, for instance, for failing to control billions of dollars in ‘hands off’ development lending to third parties that has led to severe human rights abuses, and for pushing dangerous privatisation schemes and rolling back on its social and environmental standards. ‘The G20’s backing of multilateral banks must be mirrored by it insisting on better policies to ensure their lending does no harm,’ Price-Thomas said. ‘The G20 should encourage new banks like the AIIB and the BRICS New Development Bank to show the World Bank how smart lending can be safe lending for the people affected by their projects.’

Oxfam says the G20 must not push the global displacement crisis into the margins of the summit. ‘This crisis has guaranteed long-term economic implications. But in the short-term, Oxfam has already exposed the richest six G20 members as not hosting their fair share of migrants and refugees. This meeting is a good chance to see some correction,’ Price-Thomas said.

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About Oxfam 

Oxfam is a worldwide development organisation that mobilises the power of people against poverty. 

For media enquiries, please contact: 

Sarah Chu (Senior Communications Officer)
Telephone: (852) 3120 5280 / (852) 9276 0064
Email: sarah.chu@oxfam.org.hk