Sao Paulo, Brazil
Reuters
The legitimacy of the Group of 20 economic powers depends on its impact on the world’s poorest people, not just controlling inflation, the head of the United Nations Development Programme said on Tuesday.
Finance ministers from the G20 are meeting in Brazil this week with President Luiz Inacio Lula da Silva putting inequality and poverty, as well as climate change, at the top of the agenda.
Achim Steiner, administrator of United Nations Development Programme, speaks during an interview with Reuters in Sao Paulo, Brazil, on 27th February, 2024. PICTURE: Reuters/Paulo Lopes
“The G20’s legitimacy in sending absolutely consequential signals into the global economy and financial system must also be measured by its impact and consequences for the world’s poorest,” UNDP’s Achim Steiner said in an interview ahead of the meeting.
“Their decisions have immediate consequences on the ability of governments to play the role of government, which is to stabilize social impacts to address poverty, inequality, hunger, and to also mobilize the investments that are needed for the great transitions of our time: Climate change.”
A sense of injustice among citizens created by government policy can itself create financial instability as evidenced by France’s yellow vest demonstrations against fuel tax increases or Chile’s 2019-2022 protests over bus and subway fares.
While a draft G20 communique on Thursday said the global economy is likely headed for a soft landing, Steiner warned that scores of developing nations are facing a hard landing and potential financial disaster.
Many of these countries spend more on servicing their debt than on education or health, also leaving little resources for addressing climate change and transition away from fossil fuels, he said.
Financial markets must change the way they view their role in the world as they are charging poor nations punitively high interest rates, contributing to the problem, Steiner said. The world must incentivize markets to invest in solutions rather than purely financial returns, he said.
Brazilian President Luiz Inacio Lula da Silva is pushing to give developing nations of the Global South more voice in G20 meetings during Brazil’s presidency. Steiner praised Brazil’s approach for addressing poverty, climate change and multi-lateral reform and said he hoped the final communique later this week would reflect those priorities.
