News and Comment: the G20 and Africa Part 2

The G20 has a lot of issues on its plate and at the top of the list, obviously, is the on-going financial crisis.  I have already commented on the problems African countries face in getting their voices heard. On that point, Africa may have an ally in Pope Benedict who, recently returned from his Africa travels, noted the problems of adequate representation from those “who suffer most from the harmful effects of a crisis for which they do not bear responsibility”. The Pope suggests states rely on the UN and associated institutions. Jeffrey Sachs has also jumped on this bandwagon, noting that while South Africa will be present “South Africa by itself represents South Africa”.  And we all know that South Africa is not a “typical” African country (if there is such a thing).

On the point of South Africa, it might be useful to remember that President Motlanthe himself may not be in the strongest position to represent his country’s interests, given all the recent upheaval within the South African political system and the temporary nature of his position as President.

NGOs, such as Oxfam, are trying to use their influence to encourage the G20 to commit to aiding Africa as it deals with the crisis. Duncan Green, head of research for Oxfam, highlights their main requests of the G20 in a recent blog post. He comments as well on a leaked copy of a G20 communique, obtained by the Financial Times.  Indeed, the way these conferences usually go, it is likely that at least some of the major decisions have already been negotiated ahead of time. Which leaves one to wonder whether adding an African voice at this point could make a difference.

The World Bank has published figures (reported on BBC News) that somewhat echo the gloomy global economic forecasts of the IMF and OECD.

The forecast predicts that developing countries will need $1.3tn in external financing to repay debt and cover balance of payments problems, and may fall short.

The idea that African countries, in particular, could be major losers in this crisis has been underscored by a number of analysts and commentators including Egypt’s finance minister, Oxfam’s Duncan Green (commenting on the case of Zambia), and Kofi Anan (who argues that the crisis “hits Africa twice”).

Other G20 news:

Apparently, protestors see the G20 meeting as an opportunity to demonstrate their unhappiness with a wide range of global issues, from the financial crisis to the “siege of Gaza” to the wars in Afghanistan and Iraq.  While I understand their frustrations with global leadership on these matters, I don’t think it helps their cause to get into fights with the British police.  Apparently, these frustrations are being vented worldwide.

China is trying to exhibit its leadership potential as well.  This has included lobbying for a new “super-sovereign reserve currency to replace the U.S. dollar”, the provision of advice to rich countries, and lobbying to stop states from moving towards trade and investment protectionism.

The Chinese are not the only ones worried about protectionism. Pascal Lamy, head of the WTO, has warned that moves towards protectionism may further impact the already troubled Doha round of trade negotiations.

News and Comment: The G20 and Africa

In my Africa in World Politics class this week, I’ve been talking about the role of African states in global economic governance. This has been a focus of my own research, stressing the important roles coalitions can play, but how those roles are strongly influenced by the institutional and strategic environments that states operate in.  At the World Bank or IMF, African coalitions tend to have no impact due at least partly to the power and voting structure of those institutions. At the WTO, coalitions have had major impacts in negotiations (the Cairns Group in the Uruguay Round, the “Cotton Four” group of African countries more recently).

Right now many of the important issues regarding our global economy are being debated by a forum of industrialized and emerging market countries, the G20. Their meeting in London next month, appropriately is targeted at dealing with the current financial crisis and its spillover effects.There is one African state member of that group, South Africa, and other African states are expected to be present in less formal roles as well.

There is some hope that African issues will have a place on the agenda at the G20 meeting. But as Kofi Annan argues in a guest column on AllAfrica.com, Africa needs to have more systematic representation at the G20 if the G20 is going to be an important decision-making forum. Also, African states need to continue their hard lobbying for greater voice at the IMF and World Bank, especially given the important role the IMF plays in developing the norms of the global financial system.  My suggestion would be that African states concentrate on encouraging decision-making rules that favor coalitional behavior.  If the lessons of the WTO tell us anything, it is that some institutional settings provide greater scope for developing country influence than others.


See also: Daniel Bradlow’s post at Opinio Juris

Duncan Green on the IMF’s gloomy forecast

“IMF finally calls it – the world economy will shrink in 2009, and developing countries are hit harder than we thought

Every revision of global growth predictions has been heading towards zero, and now the IMF, in its report to the G20 finance ministers’ meeting last weekend, has taken the next step. It predicts the world economy will shrink in 2009, (by minus 0.5-1%) for the first time in 60 years. It’s pretty safe to assume that this won’t be the last downward move.

Take a look at the chart. Developing country growth is the only positive bar left (though well below the rate of population growth), but it was the largest downward revision in the forecast, marking the increasingly rapid contagion via finance, trade, remittances, commodity prices etc. In terms of the difference between growth in 08 and 09 only Japan takes a bigger hit than the developing world.”

From Poverty to Power by Duncan Green » Blog Archive » IMF finally calls it – the world economy will shrink in 2009, and developing countries are hit harder than we thought.

News stories I have been following

The impact of the finanicial crisis on Africa:

The Financial Times notes that Sub-Saharan African growth will continue, albeit at a much slower rate than in recent years. Recent news from southern Africa has been cautiously optimistic.  And China plans to increase its investments in Africa. However, ActionAid reports that the crisis will cost African economies as much as US$49billion this year. And in Nigeria, some banks have asked employees to take early retirement, reportedly as a result of the crisis.

The Financial Times also reports that African states are trying to increase their voice in on-going G20 talks about the crisis.

The crisis in Madagascar:

Global Voices has a round-up of news about what appears to be a very fluid situation.