A new deal for the developing world?

The G20 summit may have yielded some significant victories for poorer nations, but G20 leaders will be under intense scrutiny from the developing world in the coming months as they attempt to translate their words into action

Sophia Furber London

A substantial proportion of the $1 trillion stimulus package agreed at the G20 could go towards helping developing nations beat the global slump. British Prime Minister Gordon Brown lobbied hard for assistance to the developing world at the summit, and $19 billion has been earmarked for the short-term loans for the poorest countries. This was considerably more than many in the emerging world had hoped for. However, a question mark still hangs over the 'historic' deal struck at the G20, especially, from the perspective of the world's poorest countries. Do the funds put aside for them represent a commitment by the G20 leaders to wage war on poverty -- or are these just more expensive loans?

Leading economists including Joseph Stiglitz believe that the real test of the G20 summit would be the solutions it offered for the developing world. This view was echoed among the thousands of demonstrators who flooded into London in the days leading up to the summit to demand a new deal for the world's poorest countries. International development organisations such as Oxfam, Christian Aid and War on Want were heavily represented in the alliance of over 150 civil society organisations that made up the 'Put People First' movement, an umbrella organisation that brought together groups of all political hues to demand action on 'jobs, justice and climate change'.

Many protestors were united in the belief that the poorest countries are now paying the price for the worst excesses of the West. "People in the developing world have been the worst affected by climate change and the financial crisis, not people in the industrialised nations who created these problems," said Guy, a politics student taking part in the 'Climate Camp' demonstration last Wednesday. "We want to see the G20 leaders adopt policies that put people in poor nations first, for a change," he told Hardnews. 

Tax havens were a major concern of protestors in the days leading up to the summit, with demonstrators waving banners carrying slogans such as 'tax justice not tax havens'. Half of all world trade is thought to pass through tax havens, and developing countries are estimated to lose revenues larger than aid inflows each year as a result of corporations, individuals and governments off-shoring money, according to the Tax Justice Network. With numerous tax havens such as Jersey, the British Virgin Islands and Gibraltar under its jurisdiction, Britain has made a significant contribution to the development of 'blind spots' in the world economy.

Fittingly, tax havens were one area in which Gordon Brown promised to take decisive action. The G20 leaders unveiled plans for a major crackdown on tax havens in the communiqué issued at the end of Thursday's summit, ahead of a proposed 'naming and shaming' of countries that refuse to comply with international standards.