French presidency of the G20 conference on development
Paris, October 21, 2011
President of the African Development Bank,
Members of parliament,
Representatives of non-governmental organizations,
In two weeks, France will preside over the Cannes summit, where the G20 countries will make crucial decisions after one year of work led by the French presidency. Before this major event, I wanted to reaffirm France’s commitment to development.
In the past, development was a domain that only concerned the old powers of the G7. Fortunately, those days are over, as are those not-so-distant days when people thought that the European economy and the world’s other major economies, including the United States and China, were independent of one another.
We now know – and the crisis reminds us daily – that a community of nations sharing a common destiny governs the global balances.
All countries are concerned by the issue of development, whether they receive aid or give it, whether they have recently emerged from extreme poverty or have been in its grip in recent years. All must make their proposals heard in order to re-establish a stable, lasting and prosperous model.
This is the ambition of the G20 countries.
The world’s economic powers, who are gathering to respond to the major economic challenges of our day, cannot ignore developing countries.
The G20 is not the sum of the interests of its member countries, because the G20 must embody the public interest.
The G20 therefore has a duty to bring development issues to the forefront of the global scene.
That is the condition that must be met if together we are to find ways to guarantee development in the least developed countries.
Given the exceptional conjuncture we are facing today, I wanted to reaffirm this need for multilateralism, this need for transparency, this need for openness towards civil society.
The G20 responded to the crises in 2008 and 2009. Now that we are facing a debt crisis in developed countries, the imperatives of current events mustn’t cause us to neglect our long-term collective action in support of development. We must see beyond the current crisis, we must look to the future. And the future cannot be achieved without development. Nothing would be worse than forgetting the very founding principles of the G20: to act together in response to crises, but also to engage in fundamental reforms to ensure the lasting growth we need for the future. This very day, we must both rectify the dysfunctions of the global economy and prepare the new drivers of growth.
By focusing on the issue of development, we will establish the foundations of tomorrow’s growth, starting today. There is no contradiction between the requirements of development and tomorrow’s growth for the world. Today’s least developed countries are the developed economies of tomorrow. Let us not have a Malthusian vision of growth. We mustn’t believe that the world needs a Third World, that it is in the interest of developed countries to maintain poor countries in a state of dependence; that the growth of some will interfere with the growth of others. There will be no future and lasting growth for the global economy without shared development.
Over 50 years ago, blatant inequalities around the world caused a stir in public opinion. Things have changed. Hundreds of millions of people have been lifted out of poverty. Today, I want to say this because I believe it: the old distinction between North and South is no longer relevant. It has been overcome by events.
We must change the way we view development and the continents undergoing change, including not only Asia and Latin America but also, and most importantly, Africa. We live in a new world, whose balances have shifted.
Therefore we must not envision development as something that restores the balance between two groups of countries, but as a commitment by all for the interest of all.
Support to developing countries is a major component of global economic recovery. This recovery requires an increase in consumption and investment in developing countries, including low-income countries.
By increasing growth in poor countries, stimulating domestic demand and reducing inequalities, we will create a momentum in developing countries capable of boosting the entire global economy.
We know today that the least developed countries are not a problem for global growth, but rather part of the solution to increase this growth. This is true for the short term; it’s true for the long term.
I wanted civil society as a whole to gather here today, because development depends on the participation of states as much as it depends on the mobilization of associations, of the private sector and, above all, of public opinion.
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I came here today to put forward the concrete proposals that France intends to make to the G20 countries for building growth that is more lasting and more effectively shared.
Four main areas: food security, infrastructure, social protection and the very difficult issue of financing for development. In each of these areas, the French presidency has set the goal of preparing specific projects and determining the priority actions to be carried out.
Through these choices in favour of development, together we are designing the new face of globalization. For that is the issue: what kind of globalization do we want? We want globalization that is removed from short-sighted choices, globalization that no longer aims for the immediate profitability that caused the global economy to nearly collapse three years ago and that still threatens it today. We want globalization that creates lasting and shared wealth. We want globalization that is able to anticipate future issues and rise to the global challenges that each of us must face.
The most urgent issue today, and Bruno Le Maire can confirm this, is to overcome the food challenge. It’s the absolute priority. Global agricultural production is currently insufficient and does not meet global demand. We must increase global agricultural production by 70% by 2050 if we expect to feed the nine billion men and women who will be living on our planet by then.
The solution is political. In its report on the 2008 food crisis, the FAO stated that in one year, the number of underfed people in Africa had risen by 8%, while that figure remained stable in Asia. Therefore, nothing is inevitable. This means that political leaders and institutions have the power, and the duty, to act.
I have asked the G20 ministers to propose an action plan for agriculture and food prices at the Cannes summit. Certain measures from this plan are already being implemented, such as the creation of AMIS, an international database on agricultural production, consumption and stock. Or the Rapid Response Forum to prevent and manage food crises, implemented by the FAO. In the same vein, France supports the African Union, the NEPAD and the emergency regional food reserve project hosted by ECOWAS in West Africa.
Beyond our response to food crises, we will have to produce more and more efficiently. Investment must be encouraged in agriculture, everywhere. We need Chinese agriculture, we need American agriculture, we need Malian agriculture; we need European agriculture. To set them against each other would be absolutely pointless. Of course we are going to support agricultural research, but we must also develop hedging instruments, and new insurance tools designed not just for the wealthiest farmers. We must urge development banks to invest in the agricultural sectors of the least developed countries which, if truth be told, they have neglected for so many years.
We must encourage investment in agriculture, in infrastructure, in transportation, in energy. This implies increased mobilization of the private sector, alongside international institutions. It was the private sector that enabled foreign investment in Africa to be multiplied by seven in eight years. This is why, for the first time, the French presidency has asked representatives from the private sector, under the guidance of Mr Tidjane Thiam, to work with multilateral development banks. Together, they selected a dozen exemplary projects with a transnational scope that will be able to mobilize public and private investors. We will present these projects in Cannes.
The French presidency wanted the social dimension of globalization to be a field of action for the G20. Once again, lest we be unjustly accused, we are not trying to impose a single model. But it is our duty to define minimal protection for the weakest, continuing on from the work conducted by Michelle Bachelet on behalf of the United Nations.
I repeat that it is completely unacceptable that countries belonging to both the G20 and the ILO have not ratified the eight core ILO conventions. Completely unacceptable.
If a country is a member of the ILO and the G20, there is absolutely no reason for the slightest distinction to exist, or else let it be said that the ILO is not recognized. That’s another issue and it is not my role to make judgments in that domain, but when a country is an ILO member, then it ratifies the ILO’s eight core conventions.
Today, eight people out of 10 worldwide have no social protection system, and one-third of the world’s individuals have no access to any type of healthcare facility. In the wealthiest nations, public social security expenditure represents 20% of GDP; in the poorest countries that figure is five times smaller. Who can understand this? And who can accept it? With the ageing of the population, the need for protection will become increasingly pronounced. In the poorest countries, only 20% of people aged 65 and over receive some type of retirement income. Who believes that the world can function like this?
It is interesting to point out that in 2009, countries that had set up the most efficacious social systems experienced a less severe recession. I strongly disagree with those who say that an efficient social system prevents growth. The crisis has demonstrated exactly the opposite.
So of course, we must talk about financing, and that will be my conclusion. In the current context, state budgets are very restricted to say the least, and most countries are having trouble honouring the commitments made by the international community. Two years ago in Copenhagen, we collectively agreed to contribute to the fight against climate change by pledging $100 billion each year, beginning in 2020.
Today we all agree that innovative financing needs to be found. Prime Minister Meles Zenawi has done a tremendous job on this topic. The World Bank and the IMF have made innovative financing proposals – and this can be confirmed by Philippe Douste-Blazy – with regard to maritime and air transport. On my request, Bill Gates will present several innovative financing proposals in Cannes, following the mission we gave him.
I would also like to remind you that France has taken initiatives in this area, with Germany. France and Germany would like a tax on financial transactions. They would like, they request, they demand this tax. The European Commission has taken up the French-German project, which proves that progress is being made.
Who could dispute that it is legitimate to ask the financial sector for a contribution? Wasn’t the financial sector the main cause of the 2008 crisis? The financial sector should therefore be the primary contributor to the refounding of the global economy and its future development.
This would be to its credit. It would be to its credit, and in its interest, if it were to say, “Given the way we behaved, through this tax we are going to contribute to economic recovery.” Because who doubts that a tax that would make it possible to finance development would also contribute to global growth? And so both for moral reasons, if this word means anything, at least for those I am addressing, and for reasons relating to efficiency and interest, everyone should be in favour of the tax on financial transactions.
At a time when states are making outstanding efforts to improve their public and highly challenging finances, when citizens, too, must make a large number of sacrifices in their day-to-day lives, the financial sector cannot continue to move forward, absolutely indifferent to the world that surrounds it, triumphant about who knows what. Carefree and even unconcerned about the chaos in which it played a decisive part.
Naturally, this isn’t about doing away with financial activities. Who would propose such a stupid position? It’s about regulating these activities, providing a framework for them, making them accountable.
There is no freedom without rules and this “law of the jungle” in the financial sector leads to catastrophe. In its own interest, regulation should be an objective.
Proposing a tax on international financial transactions is not lapsing into ideology. Moreover, I do not accept this reproach from the ideologists themselves of a society with no rules, no constraints, no stability and no regulation.
Requesting a tax on financial transactions isn’t tantamount to supporting the latest woolly-minded idea of deglobalization – a ridiculous idea if ever there was one, from those who miss the days when only France, Great Britain, Germany, Italy and Spain existed in the world. What a wonderful period it was when Africans had to remain silent, when Latin America didn’t have the right to speak and when all of Asia was sentenced to poverty! Is that the world we want? The world of the 19th century? In today’s world, in today’s globalization, all of the continents have a voice – and rightly so! Unless we believe that, depending on the colour of one’s skin, one has more right to speak than others? From this point of view, globalization that forces yesterday’s leading nations to share the power with the leaders of today and tomorrow, that’s progress. But what do we want? Do we want Indians and Chinese to shun development so that half of their population starves to death? What future are we offering to two billion Africans? And come to think of it, when we imagine the strange spectacle of a tiny portion of France rejecting globalization, that’s going to impress Indonesia! We can see China shaking! And we see Africa, which has placed so much hope in us, looking at us in despair, wondering when we are going to wake up.
Conversely, globalization must be managed, globalization must be regulated, globalization must follow certain rules, one of which is going to be, will have to be, a tax on financial transactions. And I don’t want anyone to come and tell me they agree with this goal on the condition that the whole world adopts it. Enough hypocrisy! If we wait for the whole world to adopt this goal, there is a good chance that your grandchildren will find themselves in this same room, listening to this same speech.
The question is: who will dare to say that the legitimacy of a tax on financial transactions is disputable? Who will dare to say to public opinion, “We don’t want to tax financial transactions, because the financial sectors behaved so admirably that we must reward them”? Who will dare to bear this message? My hope is that there will be an international public opinion willing to express the anger and revolt when faced with this type of statement.
At least for France, we are fully determined and we want to see, at the very least, a group of leading countries adopt a tax on financial transactions, and I firmly believe that in the upcoming weeks and months, public opinion in the countries that don’t adopt this rule will violently question their government, saying “Why do you refuse to take this action?”
And there you have it, ladies and gentlemen.
There are many other things I would like to say to you, the topics are countless. But you see, I believe that it is no longer time for speeches, the time has come for decisions.
I will close by saying that the crisis is an opportunity to decide more quickly, not an excuse to refuse to make decisions. It is because there is a crisis that we will be able to make stronger decisions, more quickly and more structurally. It is because there is a crisis that we must tackle all the subjects at the same time, because all the subjects are interconnected, just as all countries are interdependent in the face of today’s events.
Thank you for your attention./.
¹ Source of English text: French G20 presidency website.