The $5 trillion commitment by the G20: Now, Make it Happen, Make it Work
With multilateralism in crisis, the G20 Leaders’ Summit demonstrated welcome unity in the face of a global pandemic. At face value, their commitments are strong:
- Protect lives,
- Safeguard people’s jobs and incomes,
- Restore confidence, preserve financial stability, revive growth and recovery stronger,
- Minimize disruptions to trade and global supply chains,
- Provide help to all countries in need of assistance and
- Co-ordinate on public health and financial matters.
Importantly, these commitments come with a bold figure. Over $5 trillion dollars has been declared to date by G20 governments for “targeted fiscal policy, economic measures, and guarantee schemes.” The immediate challenge is to ensure the money is committed effectively and is targeted enough to reach those directly in need. The money needs to come with the right conditionality for businesses.
The history of international forums, and of the G20 in particular, is one of bold commitments and impressive figures that do not materialise in the end. Assuming that support measures come in time, the other key question is for how long will they last? “Whatever it takes” sounds great if implemented to support business and workers in the short term and lays the foundation for longer-term recovery.
Let’s not repeat the mistakes of the past. The fiscal stimulus packages introduced in 2009 were withdrawn abruptly in 2011 in many parts of the world with the Toronto agreement of the G20 to cut public deficits. This sharp turn towards austerity ended all hopes for a sustained recovery that would reach working people.
Today, the urgency of the situation demands bold commitments that are sustained and real.
The vital support for frontline services, and for health workers, in particular, is critical to saving lives. The crisis is a dire reminder of the need for quality public services with universal coverage, which must be brought upfront on the G20 agenda. A global commitment to universal social protection is more important than ever and G20 funding must be used to support this. The world is only as safe as its most vulnerable citizens.
Equally, supply chains for medical equipment, including PPE and medicine must remain open. Then, there are other essential products and services on which we depend and that still need to cross borders. This requires employers and unions working with governments and relevant international structures to keep production, transport and distribution routes open as well as protecting all of these frontline workers.
Then, there is the impact of economic closures and the emerging social and economic devastation where this is not addressed with the right protections and liquidity measures. Lay-offs and bankruptcies as a result of the present crisis need to be avoided.
For workers, twelve countries of sixty-nine analysed to date by the ITUC have addressed the majority of the immediate needs supported by trade unions. This means real-time wage and income assistance vital for individuals and vital for economies. While there is more to do even in many of these countries and others are coming on board, the vast majority of countries are yet to step up. However, too many nations do not have the resources to do so. They need to be supported — especially with vulnerable workers, informal economy workers and those in low wage, insecure and unsafe work in global supply chains in mind.
The international commitment to debt relief and liquidity swaps that support vulnerable countries is real leadership but again these instruments must be deployed in defence of the real economy and in line with the SDGs.
In this context, the G20 commitment to protect workers and business must be inclusive of countries where non-essential supply chains are collapsing. The social devastation and the economic risk to these economies multiplied across the global economy needs collective action. With international support, employers and unions are ready to help governments and international institutions to design and deploy vital funding. Jobs, incomes and production need to be secured for the capacity to either retool quickly to current demands or have the capacity to reopen as soon as possible.
With 60% of the world workforce in the informal economy, a failure to regulate labour markets cannot mean that they bear the risks and are excluded from protections. The underlying and fundamental weakness of our economies indeed lies in the unbalanced and unfair trade system that still prevails. In the long run, the G20 must take a serious look at how our supply chains are organised to ensure a more balanced stable global economy.
The $5 trillion commitment might entail another round of massive bailouts and public equity stakes in private businesses, to keep our economies afloat. Fairness and accountability will be crucial. At all cost, we must avoid the disasters of the 2008/2009 bailouts for the financial sector that left people and small business without support, and that led to privatising the gains while socialising the costs.
The G20 was created to address the Global Financial Crisis in 2008. The upcoming weeks as we respond to the health social and economic costs of the global pandemic will be a test of its leadership.
G20 Leaders have set out their commitments. Now it’s time to make it happen, make it work, and make it work with social dialogue in the real economy involving unions and business to design and implement measures nationally and globally. G20 Labour and Finance ministers must work together with social partners to that end. Trade unions across the world are ready to play their part in making this work.
Sharan Burrow, General Secretary, International Trade Union Confederation and Pierre Habbard, General Secretary, Trade Union Advisory Committee to the Organisation for Economic Development (OECD)