Panacea of 'Structural Reforms'

The main commitments of the G-20 leadership, touted at the Brisbane summit, sound utterly
hollow.
Reading the communiqu issued at the end of the G-20 Leaders Summit at Brisbane over the
weekend of 15-16 November, what struck us was the out-and-out hollowness, the utter emptiness
of the main commitments made therein. Whether it is about lifting the global economy out of the
doldrums, or committing the urgently required funds for mitigation and adaptation in the face of
irreversible climate change, or even creating the edifice of genuine partnership and cooperation
among the G-20 leaders, they are all in a complete mess.
According to the official communication, the G-20 countries whose economies together make
up around 85% of the world gross domestic product (GDP) committed to work in partnership
to raise the G-20s GDP by at least an additional [our emphasis] 2% by 2018. Indeed, if the
commitments made are fully implemented, it is claimed that they will deliver 2.1%, and
thereby add more than $2 trillion to the global economy and create millions of jobs. How can
we take this with any measure of seriousness? Basically it is a question of quantifying the
cumulative impact of G-20 member-countries economic growth strategies, and one needs to
admit the high degree of unreliability in any such quantitative assessment, but the official
declaration is so cocksure about its figure of 2.1%.
And pray, what are those economic commitments that have to be fully implemented? Structural
reforms are at the core of them put in ordinary words, more of laissez-faire and hire and fire,
the latter, euphemistically called labour market flexibility. The communiqu rightly speaks of
the global economy being held back by a shortfall in demand, but then goes on to call for
putting debt as a percentage of GDP on a sustainable path, that is, in the absence of additional
mobilisation of tax revenue, resorting to slashing civilian government expenditure as a
proportion of GDP and thereby instituting more severe fiscal austerity. Indeed, while officially
the G-20 leadership calls for partnership to achieve its growth targets, a section decided to
cold-shoulder the Chinese plan to establish an Asian Infrastructure Investment Bank to finance
infrastructure projects in the Asia-Pacific region.
Even as such a huge opportunity to access finance for investment in the real economies of the
Asia-Pacific is foregone, the US stock markets are continuing to be driven sky-high through the
availability of trillions of dollars at rock-bottom interest rates to Wall Street for the financial
speculators to have a field day. The Japanese economy has plunged once more into recession; the
Eurozone is on the brink of a third, or, is it, fourth, recession since 2008, and indeed, the socalled emerging market economies have suffered a sharp slowdown. But with expansionary
fiscal policy ruled out on ideological grounds, and monetary policy apparently reaching its outer
limits, the G-20 leadership now wants structural reforms to lead the way.
What about all the claim of partnership and cooperation among and between the G-20s main
leaders? The leading representatives of US imperialism and its junior partners, whether the
Australian Prime Minister Tony Abbott or the British Prime Minister David Cameron, had,

before the summit even opened, openly peddled lies and other distortions about the Russian
President, Vladimir Putin. And at the Asia-Pacific Economic Cooperation (APEC) summit
earlier in the week, in Beijing, the US President Barack Obama hosted a private meeting of
potential members of the US-sponsored Trans-Pacific Partnership in the US embassy, a regional
free trade agreement in the making that excludes Russia and China. He even lobbied to jettison
the China-sponsored, APEC-promoted plan for the establishment of a Free Trade Area for the
Asia-Pacific.
Frankly, all the so-called commitment to partnership and cooperation is empty of all
meaning. Witness the trench warfare that ensued when it came to the question of committing
funds to the United Nations Green Climate Fund for adaptation to and mitigation of climate
change. The host-government of the Brisbane meet, opposed to such funding, described it as
socialism masquerading as environmentalism, and if it were not for the fortunate development
of the shale gas industry in the US, Obama would very well have supported Abbotts vociferous
defence of the fossil fuels industry.
G-20 got off the ground in the wake of the great financial crisis of 2008; its first meeting proved
useful. But ever since, national interests have overpowered the pressing need to cooperate and
collaborate at the global level. Cameron, who initiated the move to treat Putin like a pariah, was
perhaps right for once, when, making a statement to the British Parliament after he got back from
the Brisbane summit, he said that red warning lights are flashing on the dashboard of the global
economy. How true this is in the light of the artificial boosting of the worlds major stock
markets by the worlds three main central banks pumping trillions of dollars, yens and euros into
the hands of speculators of the major banks and other financial institutions. Will the resultant
wealth effect and the G-20-recommended structural reforms lift the global economy out of the
doldrums? You have got to be an obfuscator to peddle such a line.