Issued by the Office of the Chairperson, International Coordinating Committee
The G-20 was originally set up after the Asian financial crisis in 1999 as a forum for finance ministers and central bankers from the world’s largest economies including China, India, Brazil and South Africa. Its expanded membership beyond the G7 was both a reflection of the historic shift towards a more multi-polar world order but also an attempt by the old imperialist powers to keep so-called “emerging economies” within their ambit.
Despite failing spectacularly at preventing a repeat of the 1999 financial crisis, the G20 was elevated to the status of “premier forum for global economic coordination” in the wake of the 2008 global financial meltdown to stabilize the world economy that was reeling from the worst crisis since the Great Depression of the last century. Since then, its core tasks have been to secure financial stability, reignite capitalist growth and prevent the slide to “protectionism” among capitalist economies.
Eleven summits after the Lehman Brothers collapse, the G20 has clearly failed on all counts.
Despite playing up the need for regulatory reform to curb financial speculation and shadow banking practices that led to the 2008 financial crisis, the actual measures undertaken by the imperialist countries are ensuring that even greater and more dangerous convulsions are in store in the near future. Bank bailouts have transformed the private debt crisis into a sovereign debt crisis, with total government debt outstanding now at $59 trillion – twice its level in 2008.
The ultra-loose monetary policy adopted by the imperialist central banks have certainly succeeded in putting more money in the hands of the financial oligarchy. But this has inflated total global debt – including government, household, corporate and bank debt – to $199 trillion by mid-2014, up 40% since 2007 and growing at a much faster pace than global GDP.
Moreover, instead of stimulating more investment, job creation and spending in the real economy, much of the extra liquidity pumped into the system through quantitative easing is being funnelled into share buy-backs, mergers and other speculative activities that are inflating asset prices of equities, bonds and property in some countries. Thus new asset bubbles are forming everywhere, setting the stage for new financial crises to erupt and disrupt the system anew.
Meanwhile, even by the optimistic forecasts of the IMF, growth prospects for the global economy remain dismal and highly vulnerable to new economic and geopolitical risks. It expects the global economy to grow by just over 3 percent this year. But the advanced capitalist countries remain essentially stagnant with only 1.8 percent growth while the underdeveloped economies most dependent on raw material exports are expected to contract with the continued decline in commodity prices in the face of a protracted global depression.
Official figures also show that joblessness is at an all time high of 200 million people globally, with another 3 million expected to join the ranks of the unemployed over the next two years.
Moreover, for the first time in three decades, the volume of world trade has been slowing relative to world GDP, which is not even growing significantly. Indeed, in dollar terms, world merchandise trade fell by 13 percent and trade in services declined by 6.5 percent last year due to depressed demand globally. Not surprisingly, this stagnation in global trade is being accompanied by a rise in protectionist measures as competition between monopoly firms and their states intensify.
According to the WTO, more trade-restrictive measures were adopted by countries in 2015 compared to previous years, and G20 members were responsible for the bulk of these despite repeated ad hominems against beggar-thy-neighbor policies. Between mid-October 2015 and mid-May 2016, G20 economies applied 145 new trade-restrictive measures, equating to an average of almost 21 new measures per month. Leading this trend towards protectionism is the US and Russia while at the same time forcing other countries to open up their economies. The intensifying trade wars between states parallel the marked rise in geopolitical conflicts and confrontations in virtually all regions of the world.
In this year’s Summit in Hangzhou under China’s leadership, the G20 once again promises to deliver more “inclusive economic growth” through coordinated macroeconomic policy, open trade and innovation. But the final declaration released at the Summit’s conclusion last September 5 is long on rhetoric, short on concrete and measurable actions. It lists vague commitments to promote a “new industrial revolution”, “digital economy development” and “innovative growth”. But these remain premised on fostering private sector innovation (e.g. through protecting monopoly intellectual property rights, subsidizing infrastructure development for industries, and enforcing trade and investment rules that favor transnational corporations).
All these will only intensify of the exploitation of the masses of the world, increase the concentration and overaccumulation of capital in the hands of the monopoly bourgeoisie, and exacerbate the crisis of overproduction that is at the root of the global economic malaise that the G20 is purportedly trying to resolve.
As the imperialist powers redouble their efforts to resuscitate and preserve the global monopoly capitalist system, then more so must the people become more astute in exposing the real roots of the crisis of the global capitalist system and oppose the false solutions and new attacks on the people by the G20, the international financial institutions and the US and other imperialist states.###
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