Why David Cameron Needs a Trip to St Petersburg

For CAFOD, this G20 comes at a critical moment: the Russian presidency needs to continue the momentum on the good work started by the G8 on transparency, to make sure that developed and developing country governments can ensure they are getting their fair share in taxes from global firms.

This past week has seen Brits being unusually cheerful as we experience a rare combination of sunny weather and some decent news about the economy. Britain's growth forecasts are being revised up - manufacturing output is up, consumer spending is up, house prices are up. So with everything looking up, you could wonder why David Cameron is bothering to go to the G20 Summit in St Petersburg next month.

It's certainly true that the G20's glory days seem to be behind it. It has never rediscovered the drama and the drive of the early years of the financial crisis, when it brought together the leaders of the world's most important economies to stave off an impending global depression and fix the most egregious flaws in the financial system.

But despite the idea we might be on the road to Boom Britain once again, the less glamorous but no less vital work of the G20 still needs to get done. Even as Barclays Bank scrambles for extra pennies to fulfil the banking capital reserves requirements largely pushed by the G20, there is still a way to go to ensure citizens never again pay to bail out a failed financial sector; shadow banking is still inadequately regulated; we still don't have a good plan to deal with institutions that are "too big to fail".

And speculators gambling on commodity markets can still affect food prices across the globe, hitting the poorest men and women struggling to feed their families hardest. If governments do experience a crisis and get into trouble with debt, there is still not a good way to settle with creditors in a way that shares risk fairly. Right now in Argentina the government is being sued for billions by Vulture Funds that bought up debt from the country's economic crisis of the early 2000s.

These are all outstanding items on the G20's to-do list.

For CAFOD, this G20 comes at a critical moment: the Russian presidency needs to continue the momentum on the good work started by the G8 on transparency, to make sure that developed and developing country governments can ensure they are getting their fair share in taxes from global firms.

Russia also has the important task of leading the G20 in reinvigorating its work plan for assisting the world's poorest countries in their economic development. For most poor men and women in developing countries, local small businesses are the most promising route out of poverty. But they face significant hurdles in getting goods to market because of poor roads, and they struggle to invest in growing their businesses in light of low and unreliable demand in local markets. The G20's development work has done little to help them so far. Its agenda on infrastructure has focused too much on facilitating partnerships with the private sector to build large projects, and not enough on filling the funding gap to build rural roads.

The G20 needs to make supporting these small businesses a much bigger part of its new agenda in order to ensure that we get growth in those countries that creates jobs and reduces poverty. For example, it can help them by assisting governments to set up social protection systems which have been successful elsewhere in boosting local small businesses. In Malawi one such scheme generated an extra two dollars of business - mainly benefiting local firms - for every one dollar transferred to the poorest households.

More importantly, the G20 needs to make the whole of its agenda - not just that of its Development Working Group - work for development. As the world is deliberating on the best successor to the Millennium Development Goals, how the global economy works and how well global trade, investment and finance are regulated will be critical to how successful we are in achieving these goals. Getting these elements right at least starts at the G20, the self-appointed 'premier global forum for economic cooperation'.

As a member of the high-level panel appointed by the UN Secretary General to present ideas on the next global agreement on development, David Cameron has a vested interest in ensuring that the G20 does its bit. CAFOD, at least, is pleased that we will be seeing him in St Petersburg.

Close

What's Hot