It was probably inevitable that climate change would fall off the agenda of the G20 summit. Emerging economies like China and Brazil are fiercely opposing any attempt to link global warming to the economic crisis because they fear it will allow the industrial world to impose more protectionist policies under the pretext of helping the environment.
So, although Gordon Brown has pushed for a genuflection to the issue in the final communiqué, there is a general agreement to let it wait until the UN Climate Change conference in Copenhagen in December. That's not ideal, but it may be a necessary compromise just now.
What cannot wait is action to assist the world's poorest nations, which look in danger of getting squeezed at the summit. The rich world has stopped buying much of what they export. The prices of their commodities have fallen. The money sent home by their expats in rich countries has plummeted. Currency shifts have reduced the value of aid. Food prices remain high.
On the trade front, despite continued rhetoric about the need to avoid protectionism, 17 of the G20 countries have instigated 47 policies that have restricted trade in the past four months. Some of it is what has been called "low intensity protectionism", such as the Buy American clauses in Washington's economic stimulus Bill. But Russia has raised duties on cars, pork and poultry. India has done the same with steel products, and on it goes. These countries need to be named and shamed by the World Trade Organisation to ensure that such anti-market policies are temporary and limited in scope, and guarantee that the rules-based trading system survives.
But positive measures are needed to kickstart trade. The summit is considering setting up a $100bn (£69bn) fund to underwrite export credit agreements to international trade. That figure needs to be at least doubled because the shortfall in such trade, since the banks have cut the credit they advance, is now about $300bn compared with last year. Tranches of this money need to be earmarked for the lowest income countries.
Two other measures could help the poor. It is crucial that agreement is reached on funding a substantial new allocation of Special Drawing Rights (SDR), the international reserve asset which is available to countries based on their contributions to the IMF. An SDR allocation of $250bn would mean $90bn in loans available to emerging economies and $19bn extra for the lowest-income countries.
It would be good, too, if there was agreement to sell a sizeable chunk of the IMF's $86bn gold reserves, since the price of gold is high at present; the money could be earmarked for the poorest nations so that they, too, can pursue a policy of increasing public spending to offset contraction in the private sector.
Finally, it is essential that any agreement on controlling tax havens is instituted as a multilateral mechanism, so that the information extracted from these opaque repositories is available not just to powerful nations via bilateral agreements but to the poorest governments too. The poor are too easily forgotten when world leaders meet. They must not be.Reuse content