Up, Down, Appendices, Postscript.
G8/G20: if you can read these communiqués without choking - good on you, kitchen-sink-ism at its best (or worst or somewhere in-between, whatever): G-8 Muskoka Declaration, and, The G-20 Toronto Summit Declaration - sure, the "tens of millions" of new jobs sounds good until you remember that this is just wallpaper window-dressing fol-de-rol, they have no intention of anything of the kind, no more than their 2 degree limit to global warming stated in L'Aquila last year, or the end of fossil fuel subsidies pledged in Pittsburgh, the purest ignorant and uninformed ad-hoc-ism; but still, the Globe applauds like the well-trained rah-rah monkey it has become since Edward Greenspon was fired, and our Nobel laureate economist Paul Krugman says NAY! (to the G20 statements but not to Growth itself)
... and all of them as far as I can see, pundits & pols alike, are still yearning for growth, how silly is that? Growth is not the solution nor even part of it you capital 'K' Knuckleheads - Growth is the PROBLEM!
more pundits signing in, the chief pooh-bah k-k-Canadian Oil Baron, Gwyn Morgan, hems and haws, and David Rosenberg, Chief Economist & Strategist of Gluskin Sheff & Associates (whatever that is) half-assedly endorses Paul Krugman's take on it - and I have to observe, I thought Adobe and their pdf was as bad as it could get, but Scribd has trumped 'em at Trippy-ness :-)
and I admit that I got it wrong, economic recession, depression, collapse, whatever, is not our best hope, rather it may be our last faint hope ... 10,000 people in the complete G8/G20 entourage apparently, what kind of a carbon footprint did that leave I wonder?
I and I, in creation where one’s nature neither honors nor forgives. (Bob Dylan)
the word 'creation' is worthy of a moment's digression, so called 'creation science' gives it a bit of an undeserved bad taste ... week before last I saw a young woman at Massey Hall with "the opposite of war is not peace, it is creation" written on her t-shirt ... and there is a phrase rattling around in my memory "in the whole of creation" from a song somewhere? ... I can't remember ... suffice to say it is filed up there in the forebrain somewhere close to 'procreation' :-)
there is so much misinformation floating around, noosphere pollution, here is one piece of something which is not misinformation: James Hansen Storms of My Grandchildren, 9 - An Honest, Effective Path: The Main Story, if only the great unwashed could somehow or other be educated to a level of comprehension ... Cap&Trade vs Fee&Dividend aka Carbon Tax, and the not so subtle difference between returning it as a Dividend or returning it as a reduction of Payroll Taxes, it's not rocket science ...
I guess this is the flip side of September 1, 1939, last week I was looking at "we must love one another or die" and this week the young anarchists burning police cars in the streets of Toronto remind me that "those to whom evil is done do evil in return"
and the ridiculous & self righteous condemnations by Toronto Mayor, David Miller, right on down to David Martin, Greenpeace's climate change campaign coordinator, shows that these people are simply not capable of thinking about what went on in real terms, and the Toronto Police Chief, Bill Blair, lies about it and spins and spins and spins - a host of golden nitwits, they toil not but they do spin :-)
so the events of Saturday in Toronto, so poorly described by the press beyond the merely superficial, got me curious about the 'Black Bloc' - in an interview one of them is reported describing himself as "a husband and father" which further piqued my interest, and the one single columnist in Toronto (The Good) who had seen anything beyond the surface (and who is the Globe's TV critic for gawd's sake!) ... ok, maybe John Cruikshank got some of it right, but obviously has not asked himself much about the anarchists and where they are coming from,
anarchy? what I know is a very little bit about Bakunin & Proudhon (that's to say, nothing beyond their names), and maybe a Christian notion inherited from my mother that when everyone adopts the Golden Rule there will be no need of governments ... so since this is just about what the Internet is actually good for, I went looking ...
and I found a 1999 film/documentary of The Battle in Seattle by Tim Lewis of CrimethInc. Ex-Workers' Collective: on YouTube Breaking The Spell Part 1, 2, 3, 4, 5, 6, 7, or download from uTorrent,
and I found a book: The Black Bloc Papers (%$! pdf) by David Van Deusen & Xaviar Massot of The Green Mountain Anarchist Collective.
thinking about it upset me so much that I went on Sunday to walk with the Christians on their G20 Summit Nonviolent Prayer Vigil, which was a bust in too many ways ...
so I was still thinking about it the next morning when I went to the bank to pay my phone bill, and the teller and I discussed it, and after a moments' thought she said, "well ... two wrongs don't make a right' ... atta girl! God bless her. ... so that's where my thinking is right now - you could call it 'walking the line' or 'straying into the border-country' or 'a walk on the wild side' ... whatever ... I am hanging in the balance, undecided.
a few more links:
OCAP - Ontario Coalition Against Poverty,
libcom - libertarian communism,
Toronto Community Mobilization Network,
NIO - Negotiation Is Over.
the growth paradigm is viciously in control, people walk around pretending to be 'thinking outside the box' with self-congratulatory smiles as if they were being cool but they have no idea what it means, somehow the very phrase itself, 'outside the box,' has been put into the box.
thank goodness I still have contact with youthful minds once in a while, and round and round and round we go; from creation to Shalom to wholeness to Buddhist resignation; from hope to vision to anger to despair to re-birth and resurrection ...
Generations have trod, have trod, have trod;
And all is seared with trade; bleared, smeared with toil;
And wears man’s smudge and shares man’s smell;
(Gerard Manley Hopkins, God’s Grandeur)
... speaking of 'ah! bright wings':
here's some comic relief from Boehringer Ingelheim (aka Big Pharma - check out that logo man!) on Flibanserin (aka Girosa) and related humour from our Camille Paglia who hasn't been seen on these pages since 2006.
last year on k-k-Canada Day I went down to hear the largest saxophone orchestra ever play Oh Canada - it brought tears to my eyes, and later on, the Shuffle Demons ... this year I just sat on a bench in the park for an hour or so in the afternoon watching the families play ... ahhh there are so many single parents out there and I remembered how desperately unsatisfying that is in the end.
I watched this video: The Deakins 2010 Keynote Address - Part 1, Part 2, Tim Flannery, Curator & Nick Rowley, Moderator & Chair, June 2010 - the two of them look to be behaving like puffed up milquetoast bureaucrats but I heard them out, and they turned me on to this: Prosperity without growth - Part 1, Part 2, Tim Jackson.
so much depends on personality ... Flannery's The Weather Makers was important to me when it came out in 2005, but his subsequent Now Or Never in 2009 left me confused, and Clive Hamilton's criticism of Flannery's position following Copenhagen (he seemed to think it had been a success) began to confirm my confusion as maybe relating more to Flannery than to myself :-)
I will discuss Tim Jackson more when I have read his book, in the meantime here are a few threads that came my way:
"The savage who loves himself, his wife, and his child with quiet joy and glows with limited activity for his tribe as for his own life is, it seems to me, a more genuine being than that cultured shade who is enchanted by the shadow of his whole species. ... In his poor hut, the former finds room for every stranger, receives him as a brother with impartial good humor and never asks whence he came. The inundated heart of the idle cosmopolitan is a home for no one. ..."and finally, I was out to the Centre For Inquiry - CFI to hear Peter Victor: here's his website (including downloads of his LowGrow model, here he is previously on YouTube: What's next after Bali, here he is with his (apparently canned since it is about word-for-word what I heard on Friday night) book presentation, and here's the 2008 book itself: Managing Without Growth: Slower by Design, Not Disaster, which I have ordered through Toronto Public Library, charming, controlled, urbane, not obviously driven psychotic by his subject matter, even knows about the destruction of the Newfoundland cod fishery by the fucking k-k-Canadians and their bum-boy John Crosbie, how they could manage to buy a man with the wit to come up with 'Tequila Sheila' astounds me (!) ... but later on I will have more to say - when I have read the book, here's a tidbit from the lecture in the form of a quote by Robert Solow (a contemporary of Ivan Illich and a decade older than Wendell Berry):
Johann Gottfried von Herder,
Reflections on the philosophy of the history of mankind, 1784;
the Prisoner's Dilemma at Wikipedia;
the horns of the dilemma (roughly): continued growth on a finite planet is not possible; but degrowth aka 'décroissance' aka 'decrescita' aka 'decrecimiento' aka 'decrescimento' aka 'wachstumsrücknahme' is unstable (but is it necessarily so?); see R&D Research and Degrowth Recherche & Décroissance.
a cute description of consumer pathology: "... spending money we don't have on things we don't need to create impressions that won't last on people we don't care about and who don't care about us ..."
Tim Jackson (in the video); and
Tim Jackson Prosperity without Growth: Economics for a Finite Planet.
"There is no reason at all why capitalism could not survive without slow or even no growth. I think it’s perfectly possible that economic growth cannot go on at its current rate forever. ... It is possible that the United States and Europe will find that, as the decades go by, either continued growth will be too destructive to the environment and they are too dependent on scarce natural resources, or that they would rather use increasing productivity in the form of leisure. ... There is nothing intrinsic in the system that says it cannot exist happily in a stationary state." (from Fear of fallowing: The specter of a no-growth world by Steven Stoll in Harper's Magazine, March 2008)
in short, degrowth has a faint hope of achieving sufficient currency to save us, hope springs eternal ... a-and that's really it this time, be well.
1. G8 Muskoka Declaration, 25-26 June 2010.
2. The G-20 Toronto Summit Declaration, June 26–27 2010.
3. Deficit-reduction agreement clear, welcome, Editorial, June 27 2010.
4. The Third Depression, Paul Krugman, June 27 2010.
5. You don’t recover from a debt crisis with more debt, Gwyn Morgan, June 27 2010.
6. Black Bloc protester doesn't want to be stereotyped, CP, February 25 2010.
7. Protest coverage: all live, all the time, all shallow, John Doyle, June 27 2010.
8. Brutal spectacle failed a city and its people, John Cruickshank, June 28 2010.
9. G20 Summit Nonviolent Prayer Vigil, June 27 2010.
10. God’s Grandeur, Gerard Manley Hopkins, 1877.
11. No Sex Please, We’re Middle Class, Camille Paglia, June 25 2010.
The Third Depression, Paul Krugman, June 27 2010.
Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.
Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.
And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.
In 2008 and 2009, it seemed as if we might have learned from history. Unlike their predecessors, who raised interest rates in the face of financial crisis, the current leaders of the Federal Reserve and the European Central Bank slashed rates and moved to support credit markets. Unlike governments of the past, which tried to balance budgets in the face of a plunging economy, today’s governments allowed deficits to rise. And better policies helped the world avoid complete collapse: the recession brought on by the financial crisis arguably ended last summer.
But future historians will tell us that this wasn’t the end of the third depression, just as the business upturn that began in 1933 wasn’t the end of the Great Depression. After all, unemployment — especially long-term unemployment — remains at levels that would have been considered catastrophic not long ago, and shows no sign of coming down rapidly. And both the United States and Europe are well on their way toward Japan-style deflationary traps.
In the face of this grim picture, you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.
As far as rhetoric is concerned, the revival of the old-time religion is most evident in Europe, where officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, by improving business confidence. As a practical matter, however, America isn’t doing much better. The Fed seems aware of the deflationary risks — but what it proposes to do about these risks is, well, nothing. The Obama administration understands the dangers of premature fiscal austerity — but because Republicans and conservative Democrats in Congress won’t authorize additional aid to state governments, that austerity is coming anyway, in the form of budget cuts at the state and local levels.
Why the wrong turn in policy? The hard-liners often invoke the troubles facing Greece and other nations around the edges of Europe to justify their actions. And it’s true that bond investors have turned on governments with intractable deficits. But there is no evidence that short-run fiscal austerity in the face of a depressed economy reassures investors. On the contrary: Greece has agreed to harsh austerity, only to find its risk spreads growing ever wider; Ireland has imposed savage cuts in public spending, only to be treated by the markets as a worse risk than Spain, which has been far more reluctant to take the hard-liners’ medicine.
It’s almost as if the financial markets understand what policy makers seemingly don’t: that while long-term fiscal responsibility is important, slashing spending in the midst of a depression, which deepens that depression and paves the way for deflation, is actually self-defeating.
So I don’t think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between deficits and jobs. It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times.
And who will pay the price for this triumph of orthodoxy? The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again.
G8 Muskoka Declaration, 25-26 June 2010.
RECOVERY AND NEW BEGINNINGS
Muskoka, Canada, 25-26 June 2010
1. We, the Leaders of the Group of Eight, met in Muskoka on June 25-26, 2010. Our annual summit takes place as the world begins a fragile recovery from the greatest economic crisis in generations.
2. What binds the G8 together is a shared vision that major global challenges must and can be addressed effectively through focus, commitment and transparency, and in partnership with other concerned members of the global community. The G8 has demonstrated the capacity to design credible approaches to meet the challenges of our times. For over thirty years, it has shown that its collective will can be a powerful catalyst for sustainable change and progress. At Muskoka in 2010, we are focussing on an effective agenda to address key challenges in development, international peace and security, and environmental protection.
3. This economic crisis exposed and exacerbated vulnerabilities already embedded in integrated global economies, development efforts, and collective security. Progress is being made, through the work of the G20, towards the sustainable recovery of our global economic and financial system. For development, a decade of policy commitments and joint efforts with our partners has brought significant progress towards the Millennium Development Goals (MDGs), but both developed and developing countries must do more; meanwhile, the crisis has jeopardized advancement toward meeting some of the 2015 targets. Renewed mutual commitments are required. We must also ensure that the proliferation of weapons of mass destruction, terrorism and organized crime, as well as many other challenges faced by states to address their security vulnerabilities, including climate change, remain at the forefront of public policy. We, the G8, are determined to exercise leadership and meet our obligations.
4. Moreover, and beginning at the 2008 Hokkaido Toyako Summit, we have recognized the importance of demonstrating that the G8 is committed to reporting transparently and consistently on the implementation of its commitments. In 2009 at the L’Aquila Summit, we tasked senior officials to report on the implementation of our development and development-related commitments with a focus on results. We welcome the Muskoka Accountability Report: Assessing action and results against development-related commitments and will ensure follow up on its conclusions and recommendations. It shows that important progress has been made in many areas, but more needs to be done. We emphasize the importance of regular reports on the progress made in implementing our commitments and in this regard will focus the Accountability reporting in 2011 on health and food security.
5. As recovery takes hold, we are at an important crossroads where nascent hope and optimism must be channelled into building more secure, equitable, inclusive and sustainable societies globally, where greater attention is paid to improving and effectively assessing the well-being of people.
6. Support for development, based on mutual responsibility, and a strong partnership with developing countries, particularly in Africa, remains a cornerstone of the G8’s approach. We will pursue our comprehensive approach to development aiming at sustainable outcomes. We reaffirm our commitments, including on ODA and enhancing aid effectiveness. We call on developing country governments to meet their primary responsibilities for social and economic development and good governance, in the interests of their citizens. Since the most vulnerable states have made the least progress towards the MDGs, we will place special emphasis on helping them build the foundations for peace, security and sustainable development.
7. The global community is now at the two-thirds point between adoption of the Millennium Development Goals (MDGs) and the target date of 2015. To achieve the MDGs the effort needs to be truly global, encompassing a comprehensive, whole-of-country approach, including actions not only from all governments, but also from the private sector, foundations, non-governmental organizations and civil society, as well as international organizations, focussing more on the protection and empowerment of individuals and communities to improve human security. In this regard, we welcome the UN Secretary General’s report “Keeping the Promise” and the UNDP International Assessment on meeting the MDGs. The G8 supports the priorities outlined in the Assessment, and reaffirms the view that progress must be driven by domestic strategies, policies and interventions and national ownership. We call on all development partners, at the September 2010 UN High-Level Plenary Meeting on the MDGs, to strengthen the collective resolve to accelerate progress towards these targets and call for an action-oriented outcome. Consequently, all public and private financial resources should be mobilized efficiently, and enabling conditions created for private and financial sector development and investment and resource flows.
8. Progress towards MDG 5, improving maternal health, has been unacceptably slow. Although recent data suggests maternal mortality has been declining, hundreds of thousands of women still lose their lives every year, or suffer injury, from causes related to pregnancy and childbirth. Much of this could be prevented with better access to strengthened health systems, and sexual and reproductive health care and services, including voluntary family planning. Progress on MDG 4, reducing child mortality, is also too slow. Nearly 9 million children die each year before their fifth birthday. These deaths profoundly concern us and underscore the need for urgent collective action. We reaffirm our strong support to significantly reduce the number of maternal, newborn and under five child deaths as a matter of immediate humanitarian and development concern. Action is required on all factors that affect the health of women and children. This includes addressing gender inequality, ensuring women’s and children’s rights and improving education for women and girls.
9. G8 members already contribute over US$4.1 billion annually in international development assistance for maternal, newborn and under-five child health (MNCH). Today, we, the Leaders of the G8, working with other Governments, several Foundations and other entities engaged in promoting maternal and child health internationally  endorse and launch the Muskoka Initiative, a comprehensive and integrated approach to accelerate progress towards MDGs 4 and 5 that will significantly reduce the number of maternal, newborn and under five child deaths in developing countries. The scope of the Muskoka Initiative is specified in
Annex I. Our collective undertaking will support strengthened country-led national health systems in developing countries, in order to enable delivery on key interventions along the continuum of care, i.e., pre-pregnancy, pregnancy, childbirth, infancy and early childhood.
10. To this end, the G8 undertake to mobilize as of today $5.0 billion of additional funding for disbursement over the next five years . Support from the G8 is catalytic. We make our commitments with the objective of generating a greater collective effort by bilateral and multilateral donors, developing countries and other stakeholders to accelerate progress on MDGs 4 and 5. We therefore welcome the decisions by other governments and foundations to join the Muskoka Initiative. The Governments of the Netherlands, New Zealand, Norway, Republic of Korea, Spain and Switzerland, subject to their respective budgetary processes, and the Bill and Melinda Gates and UN Foundations have now or have recently committed to additional funding of $2.3 billion to be disbursed over the same period.
11. We fully anticipate that, over the period 2010-2015, subject to our respective budgetary processes, the Muskoka Initiative will mobilize significantly greater than $10 billion.
12. As a consequence of the commitments made today towards the Muskoka Initiative, this support, according to World Health Organization and World Bank estimates, will assist developing countries to: i) prevent 1.3 million deaths of children under five years of age; ii) prevent 64,000 maternal deaths; and iii) enable access to modern methods of family planning by an additional 12 million couples. These results will be achieved cumulatively between 2010-2015. We will track progress on delivering commitments through our accountability reporting, which, in 2011, will focus on health and food security. In line with the principle of mutual accountability, we expect these joint commitments will encourage developing countries to intensify their own efforts with regard to maternal and child health, leading to the saving of many more millions of lives of women, newborn and young children.
13. It is possible to build a broad coalition of the committed. We the partners to the Muskoka Initiative trust today’s launch will give added momentum to the UN-led process to develop a Joint Action Plan to Improve the Health of Women and Children, and make a key contribution towards the September 2010 UN High-Level Plenary Meeting on the MDGs. Given the interconnected nature of the Goals, we expect that our commitments will have positive impacts on the other MDGs.
14. We will also focus efforts on training of medical personnel and on establishing stronger health innovation networks in Africa and other regions.
15. We reaffirm our commitment to come as close as possible to universal access to prevention, treatment, care and support with respect to HIV/AIDS. We will support country-led efforts to achieve this objective by making the third voluntary replenishment conference of the Global Fund to Fight AIDS, TB and Malaria in October 2010 a success. We encourage other national and private sector donors to provide financial support for the Global Fund. We commit to promote integration of HIV and sexual and reproductive health, rights and services within the broader context of strengthening health systems. G8 donors also remain steadfast in their support for polio eradication and remain committed to a polio-free world. We continue to support the control or elimination of high-burden Neglected Tropical Diseases (NTDs).
16. Food security remains an urgent global development challenge, exacerbated by climate change, increasing global food demand, past underinvestment in the agricultural sector, and extreme price volatility which has strong damaging impacts on the most vulnerable. In 2009 in L’Aquila, we together with other countries and organizations adopted fundamental principles to enhance food security: use a comprehensive approach; invest in country-led plans; strengthen strategic coordination; leverage benefits of multilateral institutions; and deliver on sustained and accountable commitments. We launched the L’Aquila Food Security Initiative (AFSI) based on these principles and ultimately mobilized with US$22 billion for sustainable agriculture development over three years, while maintaining a strong commitment to ensure adequate emergency food aid. The initiative helped achieve a wide consensus and enabled progress to be made in reforming the Committee on Food Security and advancing the Global Partnership for Agricultural and Food Security. As of April 30, 2010, we have disbursed/allocated USD $6.5 billion and remain committed to disburse/allocate the full amount of our individual commitments by 2012. We are working actively to ensure a coordinated approach nationally, regionally and globally, while maintaining our focus on country-led initiatives. We are pleased with the launch of the Global Agriculture and Food Security Program hosted at the World Bank, which has $880 million in commitments, and other mutually complementary initiatives or mechanisms, such as the African Agriculture Fund. We underline the critical importance of accountability for ensuring that these collective commitments are met. We underline the key contribution of research to fight hunger and poverty, notably by increasing sustainable agricultural productivity and reiterate our support to the ongoing reform of the global research networks. Reduced malnutrition is a primary outcome of our Food Security Initiative and will contribute to improved maternal and child health.
17. Reflecting the key connection between cross-border investment and development and the fact that official development assistance alone is not sufficient to achieve global food security, we stress the importance of enhancing international investment in developing countries in a responsible and sustainable way. In this context, we support continued efforts to develop principles for investment in the agricultural sector undertaken by the World Bank, regional development banks, FAO, UNCTAD, and IFAD.
18. The G8 remains concerned about the illicit exploitation of and trade in natural resources – including minerals and timber. These activities play a major role in fuelling conflict. We support efforts of regional mechanisms and organizations to prevent, curb and eradicate these illegal activities. We support efforts of the Kimberley Process to manage the trade of rough diamonds and ensure compliance by all participants with its standards. The illicit exploitation of and trade in natural resources from the eastern Democratic Republic of the Congo has directly contributed to the instability and violence that is causing undue suffering among the people of the DRC. We urge the DRC to do more to end the conflict and to extend urgently the rule of law. We welcome the recent initiatives of the private sector and the international community to work with the Congolese authorities and to enhance their due diligence to ensure that supply chains do not support trade in conflict materials. We also urge candidate countries to the Extractive Industries Transparency Initiative (EITI), including the DRC, to complete the EITI implementation process as a mechanism to enhance governance and accountability in the extractive sector. The recent inclusion of coltan and cassiterite in the DRC’s EITI reporting is a step in the right direction. Further, we welcome the ongoing research and advocacy of international NGOs and local civil society as an important contribution to reducing the conflict opportunities of natural resources.
19. G8 Leaders met in Muskoka with the Heads of State or Government of Algeria, Egypt, Ethiopia (as Chair of the NEPAD Heads of State and Government Orientation Committee), Malawi (as Chair of the African Union), Nigeria, Senegal and South Africa. G8 Leaders welcome the increased ownership that Africa has over its development process and, with African Leaders, noted the high economic growth rates that had been attained in Africa immediately prior to the onset of the global economic and financial crisis. Leaders reaffirmed their shared commitment to continued collaboration between G8 and African partners in support of African-led efforts to build a more stable, democratic and prosperous Africa, to advance economic and social development, and to promote the rule of law.
20. G8 and African Leaders recognize that the attainment of the MDGs is a shared responsibility and that strategies based on mutual accountability are essential going forward. They noted that, while significant progress has been made in some areas, greater efforts are required by all actors in order to achieve the MDGs in Africa. In this regard, African Leaders expressed support for the Maternal, Newborn and Child Health Muskoka Initiative. Mindful of the central importance that maternal and child health has to development and Africa’s ability to achieve the MDGs and of the consequent need for urgent action, Leaders undertook to explore how to accelerate progress in the implementation of their respective commitments in Africa. African partners also welcomed the G8′s continued efforts to help strengthen the African Peace and Security Architecture (APSA), including institutional capacity, to prevent and manage conflict through, inter alia, peacekeeping training centres in Africa. G8 Leaders acknowledged the important contribution of African Leaders to the L’Aquila Food Security Initiative.
Environmental Sustainability and Green Recovery
21. Among environmental issues, climate change remains top of mind. As we agreed in L’Aquila, we recognize the scientific view that the increase in global temperature should not exceed 2 degrees Celsius compared to pre-industrial levels. Achieving this goal requires deep cuts in global emissions. Because this global challenge can only be met by a global response, we reiterate our willingness to share with all countries the goal of achieving at least a 50% reduction of global emissions by 2050, recognizing that this implies that global emissions need to peak as soon as possible and decline thereafter. We will cooperate to that end. As part of this effort, we also support a goal of developed countries reducing emissions of greenhouse gases in aggregate by 80% or more by 2050, compared to 1990 or more recent years. Consistent with this ambitious long-term objective, we will undertake robust aggregate and individual mid-term reductions, taking into account that baselines may vary and that efforts need to be comparable. Similarly, major emerging economies need to undertake quantifiable actions to reduce emissions significantly below business-as-usual by a specified year.
22. We strongly support the negotiations underway within the UN Framework Convention on Climate Change (UNFCCC). We reiterate our support for the Copenhagen Accord and the important contribution it makes to the UNFCCC negotiations. We urge those countries that have not already done so to associate themselves with the Accord and list their mitigation commitments and actions. Recognizing the scientific view that the increase in global temperature should not exceed 2 degrees Celsius, we also call for the full and effective implementation of all the provisions of the Accord, including those related to measurement, reporting and verification thereby promoting transparency and trust. In this context, we are putting in place our respective fast-start finance contributions to help address the most urgent and immediate needs of the most vulnerable developing countries and to help developing countries lay the ground work for long-term, low-emission development. We express our commitment to cooperate actively and constructively with Mexico as the President of the sixteenth meeting of the UNFCCC Conference of the Parties on November 29 – December 10, 2010. We support related initiatives, including the UN Secretary-General’s High-Level Advisory Group on identifying long-term public and private financing, and the Paris-Oslo Process on REDD+. We want a comprehensive, ambitious, fair, effective, binding, post-2012 agreement involving all countries, and including the respective responsibilities of all major economies to reduce greenhouse gas emissions.
23. While remaining committed to fighting climate change, we discussed the importance of ensuring that economies are climate resilient. We agreed that more research was needed to identify impacts at the global, regional, national and sub-national levels, and the options for adaptation, including through infrastructural and technological innovation. We particularly recognize the situation of the poorest and most vulnerable countries. We will share our national experiences and plans for adaptation, including through a conference on climate change adaptation in Russia in 2011.
24. To address climate change and increase energy security, we are committed to building low carbon and climate resilient economies, characterized by green growth and improved resource efficiency. We recognize the opportunities provided by a transition to low carbon and renewable energies, in particular for job creation. We encourage the IEA to develop work on an International Platform for low-carbon technologies, in order to accelerate their development and deployment. The elimination or reduction of tariff and non-tariff barriers to trade in environmental goods and services is essential to promote the dissemination of cleaner low-carbon energy technologies and associated services worldwide. Carbon capture and storage (CCS) can play an important role in transitioning to a low-carbon emitting economy. We welcome the progress already made on our Toyako commitments to launch the 20 large-scale CCS demonstration projects globally by 2010 and to achieve the broad deployment of CCS by 2020, in cooperation with developing countries. Several of us commit to accelerate the CCS demonstration projects and set a goal to achieve their full implementation by 2015. We also recognize the role nuclear energy can play in addressing climate change and energy security concerns, acknowledging the international commitment to safety, security and safeguards for non-proliferation as prerequisites for its peaceful use. We also recognise the potential of bioenergy for sustainable development, climate change mitigation and energy security. We welcome the work of the Global Bioenergy Partnership (GBEP) and commit to facilitating swift adoption of voluntary sustainability criteria and indicators, as well as on capacity building activities.
25. In 2010, the UN International Year of Biodiversity, we regret that the international community is not on track to meeting its 2010 target to significantly reduce the rate of loss of biodiversity globally. We recognize that the current rate of loss is a serious threat, since biologically diverse and resilient ecosystems are critical to human well being, sustainable development and poverty eradication. We underline our support for Japan as it prepares to host the tenth meeting of the Conference of the Parties to the Convention on Biological Diversity this October and in particular we underline the importance of adopting an ambitious and achievable post-2010 framework. We recognize the need to strengthen the science-policy interface in this area, and in this regard we welcome the agreement to establish an Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES).
Trade and Investment
26. As a means of sustaining recovery from the global economic crisis, the G8 affirms its longstanding commitment to free and open markets. G8 members of the WTO renew their commitment to the successful conclusion of the Doha Development Agenda, building on the progress already made. We direct our representatives to engage in the spirit of give and take through all negotiating avenues with the goal of achieving the increased level of ambition necessary to facilitate an agreement, recognizing the changes in the global economy since the launch of the Agenda. We will continue to resist protectionist pressures, and to promote liberalization of trade and investment under the WTO, through the national reduction of barriers, as well as through bilateral and regional negotiations.
International Peace and Security
27. We, the Leaders of the G8, remain deeply concerned about serious threats to global peace and security. We are all affected by threats from the proliferation of weapons of mass destruction, terrorism, international organized crime (including drug trafficking), piracy and from political and ethnic conflict. Prosperity, development and security are inextricably linked, and the economic well being and security of our own countries and those around the world are therefore interdependent. We share a vision of a peaceful world, based on the principles of freedom, democracy, respect for human rights and the rule of law, and remain ready to continue to work on this basis in partnership with each other and other concerned countries to address security challenges that affect us all.
28. We cannot be complacent about the grave threat posed to the security of present and future generations by the proliferation of nuclear weapons. We therefore welcome the outcome of the Nuclear Non Proliferation Treaty Review Conference, and will pursue the follow on actions it recommended by consensus. We call upon all states to do the same. We are committed to seeking a safer world for all and to creating conditions for a world without nuclear weapons, in accordance with the goals of the Treaty. We will pursue concrete disarmament efforts to this end. In this respect, we particularly welcome the New Strategic Arms Reduction Treaty signed by the Russian Federation and the United States. We call upon all other states, in particular those possessing nuclear weapons, to join these disarmament efforts, in order to promote international stability and undiminished security for all.
29. We urge all states to take and support resolute action to address non-compliance with the Treaty’s non-proliferation obligations, including safeguards obligations. We call upon states that have not yet done so to conclude a Comprehensive Safeguards Agreement with the International Atomic Energy Agency, together with an Additional Protocol, which will become the new universally accepted standard for the verification of peaceful uses of nuclear energy. We support the exchange, in conformity with the obligations of the Nuclear Non Proliferation Treaty, of equipment, materials and scientific and technological information for the peaceful uses of nuclear energy, in particular for developing countries. We reiterate our commitment as found in paragraph 8 of the L’Aquila Statement on Non-Proliferation. As we approach the 25th anniversary of the Chernobyl accident in 2011, we will take the necessary steps to complete the final stages of the Chernobyl safety and stabilization projects, and we urge all entities to pursue the highest levels of nuclear safety, security and safeguards when developing new civil nuclear installations.
30. We face a new era of threats from non-state actors, particularly terrorists, who seek to acquire weapons of mass destruction and related technology and materials. The consequences of failing to prevent this could be severe. We reaffirm our commitment to work together for our shared security, including fulfilment of the commitments we made at the Washington Nuclear Security Summit, especially to work cooperatively to secure all vulnerable nuclear material in four years.
31. In this respect, we welcome the concrete achievements and measurable results of the Global Partnership against the Spread of Weapons and Materials of Mass Destruction, launched at the Kananaskis Summit in 2002, and we remain committed to completing priority projects in Russia. We recognize the continuing global threats before us, and we all recognize the importance of continuing our joint efforts as partners to address them in the years ahead. Toward that end, we ask our senior experts to evaluate the results of the Global Partnership to date, as a point of departure for developing options for programming and financing beyond 2012, focusing on nuclear and radiological security, bio security, scientist engagement and facilitation of the implementation of UN Security Council Resolution 1540, as well as the potential participation of new countries in the initiative.
32. The adoption by the UN Security Council of Resolution 1929 reflects the concerns of the international community on the Iranian nuclear issue, and we call on all states to implement it fully. While recognizing Iran’s right to a civilian nuclear program, we note that this right comes with international obligations that all states, including Iran, must comply with. We are profoundly concerned by Iran’s continued lack of transparency regarding its nuclear activities and its stated intention to continue and expand enriching uranium, including to nearly 20 percent, contrary to UN Security Council Resolutions and the International Atomic Energy Agency Board of Governors. We call upon Iran to heed the requirements of the UN Security Council and the International Atomic Energy Agency, and implement relevant resolutions to restore international confidence in the peaceful nature of Iran’s nuclear program. Our goal is to persuade Iran’s leaders to engage in a transparent dialogue about its nuclear activities and to meet Iran’s international obligations. We strongly support the ongoing efforts in this regard by China, France, Germany, Russia, the United Kingdom, the United States and the European Union High Representative, and we welcome their commitment to the resolution of all outstanding issues through negotiation. We also welcome and commend all diplomatic efforts in this regard, including those made recently by Brazil and Turkey on the specific issue of the Tehran Research Reactor.
33. Recalling the concerns we expressed at the 2009 L’Aquila Summit, we urge the Government of Iran to respect the rule of law and freedom of expression, as outlined in the international treaties to which Iran is a party.
34. We deplore the attack on March 26 that caused the sinking of the Republic of Korea’s naval vessel, the Cheonan, resulting in tragic loss of 46 lives. Such an incident is a challenge to peace and security in the region and beyond. We express our deep sympathy and condolences to the victims and their families and to the people and Government of the Republic of Korea, and call for appropriate measures to be taken against those responsible for the attack in accordance with the UN Charter and all other relevant provisions of international law. The Joint Civilian-Military Investigation Group, led by the Republic of Korea with the participation of foreign experts, concluded that the Democratic Peoples’ Republic of Korea was responsible for the sinking of the Cheonan. We condemn, in this context, the attack which led to the sinking of the Cheonan. We demand that the Democratic Peoples’ Republic of Korea refrain from committing any attacks or threatening hostilities against the Republic of Korea. We support the Republic of Korea in its efforts to seek accountability for the Cheonan incident, and we remain committed to cooperating closely with all international parties in the pursuit of regional peace and security.
35. We call on the international community to ensure the comprehensive enforcement of all existing UN Security Council resolutions pertaining to the Democratic Peoples’ Republic of Korea. At the same time, we express our gravest concern that the nuclear test and missile activities carried out by the Democratic Peoples’ Republic of Korea have further generated increased tension in the region and beyond, and that there continues to exist a clear threat to international peace and security. We reaffirm support for efforts to achieve a comprehensive resolution to this threat and to implement the 2005 Joint Statement of the Six Party Talks. Recalling the importance of full and transparent implementation of UN Security Council resolutions, we strongly urge the Democratic People’s Republic of Korea to act strictly in accordance with its nuclear safeguards agreement with the International Atomic Energy Agency, and to abandon all nuclear weapons and existing nuclear and ballistic missile programs, as well as proliferation activities, in a complete, verifiable and irreversible manner in accordance with UN Security Council Resolutions 1718 and 1874. The Democratic People’s Republic of Korea does not, and cannot, have the status of a nuclear-weapon state in accordance with the Nuclear Non-Proliferation Treaty. We also urge the Democratic People’s Republic of Korea to take prompt actions to address the concerns of the international community on humanitarian matters, including the abduction issue.
36. The Kabul Conference in July will be an important opportunity for the Government of Afghanistan to present its detailed plans and show tangible progress in implementing the commitments made in the January 2010 London Conference Communiqué, including measures to combat corruption, address illicit drug production and trafficking, improve human rights, improve provision of basic services and governance, make concrete progress to reinforce the formal justice system and expand the capacity of the Afghan National Security Forces to assume increasing responsibility for security within five years. To this end, we fully support the transition strategy adopted by International Security Assistance Force contributors in April, as well as the on-going efforts to establish an Afghan-led national reconciliation and reintegration process. In this respect, the June Peace Jirga was an important milestone. Clear steps by Afghanistan towards more credible, inclusive and transparent parliamentary elections in September will be an important step forward in the country’s maturing democracy. We reaffirm our commitment to support Afghanistan in this process of transition and development.
37. We welcome and encourage Pakistan’s ongoing efforts to root out violent extremists, especially in its border areas with Afghanistan. We underscore the need for a broad regional approach to countering violent extremism. It is essential that Pakistan be supported by the international community as it addresses its political, economic and social reforms. We welcome and encourage the recent steps taken by the Governments of Pakistan and India to advance their bilateral relationship, and urge all countries of the region to work together actively in the interests of regional peace and stability.
38. We are pleased that progress is being made, in association with multilateral donors, on two key projects under the G8 Afghanistan Pakistan Border Region Prosperity Initiative: a Peshawar-Jalalabad expressway and a feasibility study for a Peshawar-Jalalabad rail link. We are confident that these projects and others – realized with the efforts of the Governments of Afghanistan and Pakistan — will deliver tangible benefits to the Afghan and Pakistani people and help to foster regional stability.
39. We welcome the start of the proximity talks between the Palestinians and Israel, and urge them both to create conditions conducive for direct talks, with the aim of the establishment of an independent, contiguous and viable State of Palestine, living side by side in peace and security with each other and their neighbours. We deeply regret the loss of life and the injuries suffered in the events off the coast of Gaza on May 31. We welcome the decision of the Israeli government to set up an independent public commission to investigate these events, which includes international participation, in the expectation that it will bring to light all the facts surrounding this tragic incident in line with the Statement of the President of the UN Security Council of June 1. We urge all parties to work together to implement UN Security Council Resolution 1860 and to ensure the flow of humanitarian and commercial goods and persons, to and from Gaza. The current arrangements are not sustainable and must be changed. We welcome the Israeli Cabinet’s announcement of a new policy towards Gaza as a positive development. We urge full and effective implementation of this policy in order to address the needs of Gaza’s population for humanitarian and commercial goods, civilian reconstruction and infrastructure, and legitimate economic activity as well as the legitimate security concerns of Israel that must continue to be safeguarded. We will continue to support the strengthening of Palestinian Authority institutions and the development of a viable Palestinian economy, and stand ready to provide further support for the economic, security and political development of the West Bank and Gaza in the context of a peace agreement once it is reached. We also call for progress in Israeli-Syrian and Israeli-Lebanese relations, reiterating our firm commitment to a comprehensive, just and lasting peace solution in the Middle East. We call for the immediate release of the abducted Israeli soldier, Gilad Shalit.
40. We urge the Government of Myanmar to take the steps necessary to allow for free and fair elections. Full and inclusive democratic participation is essential to this. We urge the Government to release without delay all political prisoners, including Aung San Suu Kyi, and engage the democratic opposition and representatives of ethnic groups in a substantive dialogue on the way forward to national reconciliation. We are also deeply concerned by the recent ethnic tensions in the Kyrgyz Republic resulting in death and injury to many, and appeal to all parties to show restraint. We urge the relevant parties to urgently resolve the conflict in Darfur and to pursue the full implementation of the Comprehensive Peace Agreement in Sudan, which is now entering a critical period. All Sudanese actors, and interested countries in the region and beyond, must do their utmost to preserve peace and stability regardless of the outcome of the referendum on the future status of southern Sudan. Recognizing the challenges faced by countries in the aftermath of natural disasters to provide security and basic services to civilians, we reaffirm our commitment to support Haiti and will work to strengthen existing international coordination mechanisms to improve the timeliness, effectiveness and coordination of the international response to such disasters and will continue to support the United Nations Global Platform for Disaster Risk Reduction. To that end, we will convene a meeting of experts to consider what further steps we might take.
41. Conflict, crime, piracy and terrorism continue to threaten global stability, security and prosperity. We, the G8, are committed to helping partner states and regions to continue to build the civilian security capacities they need to deal with these vulnerabilities. G8 Leaders and African partners were joined by the Presidents of Colombia and Haiti and the Prime Minister of Jamaica to address security vulnerabilities such as terrorism, proliferation, drug trafficking, the flow of illicit funds and transnational organized crime. We therefore agreed to task our ministers to consult jointly with interested partners from Africa and the Americas, as well as other parties, and to consider additional steps that might be taken to address these security vulnerabilities. To this end, we commit to strengthening: the international availability of civilian experts to support rule of law and security institutions; the capacities of key littoral states and regional organizations for maritime security; and international peace operations. The scope of our on-going efforts is elaborated in Annex II.
42. We remain concerned about the continuing threat from terrorist groups, as well as their increasing presence in Yemen, Somalia and across the Sahel. Further, we are concerned about the threat of growing links between terrorists, other criminals and insurgents, and the increasing ties between drug trafficking organizations in Latin America, the Caribbean and West Africa, as well as between those across Asia. Extensive concerted action among the G8 and across the international community has weakened the ability of terrorists to prepare and execute attacks, and of transnational organized crime groups to operate. However, we recognize the need to do more to counter crime and terrorism (including violent extremism and radicalization leading to violence, as well as recruitment), including through the strengthening of security institutions and governance institutions, by continued attention to combating the corruption that facilitates such transnational threats, and by addressing underlying political, social and economic factors in vulnerable countries. We emphasize that such actions must be based on the principles of democracy, rule of law and respect for human rights, which underpin our security. We are also concerned about cybercrime as a growing threat. We will deepen our work together to weaken terrorist and criminal networks, and have adopted a robust plan of action for this purpose. We have set out our views in a separate statement on countering terrorism.
43. Leaders welcomed the offer of France to host the next Summit in France in 2011.
The G8 Muskoka Initiative:
Maternal, Newborn and Under-Five Child Health 
Muskoka, Canada, June 26, 2010
1. Principles: The Initiative is based on a set of core principles for long-lasting results:
· ensuring sustainability of results;
· building on proven, cost-effective, evidence-based interventions;
· focussing in the countries with the greatest needs while continuing to support those making progress;
· supporting country-led national health policies and plans that are locally supported;
· increasing coherence of development efforts through better coordination and harmonization;
· improving accountability; and
· strengthening monitoring, reporting and evaluation.
2. Scope: The Initiative is related to MDGs 4 and 5, as well as elements of MDGs 1 (nutrition) and 6 (HIV/AIDS, malaria). The Initiative is focused on achieving significant progress on health system strengthening in developing countries facing high burdens of maternal and under-five child mortality and an unmet need for family planning. Improving maternal and under-five child health requires comprehensive, high impact and integrated interventions at the community level, across the continuum of care, i.e., pre-pregnancy, pregnancy, childbirth, infancy, and early childhood.
3. This Initiative includes elements such as: antenatal care; attended childbirth; post-partum care; sexual and reproductive health care and services, including voluntary family planning; health education; treatment and prevention of diseases including infectious diseases; prevention of mother-to-child transmission of HIV; immunizations; basic nutrition and relevant actions in the field of safe drinking water and sanitation.
4. Information: Efforts to strengthen health systems must also include improved health information systems, inter alia vital statistics registration, regular household surveys and applied research to monitor and evaluate implementation. More and better implementation and evaluation of research will identify options to achieve results faster and more efficiently.
5. Innovation: Better synthesis and sharing of innovations can help to overcome delivery bottlenecks more quickly and accelerate results. Existing innovations include novel uses of mobile phones, means of civic registration to improve vital statistics, and task shifting to make better use of scarce health workers.
6. Effectiveness: It is critical to maximize the impact of all investments in development through improved coherence, coordination and harmonization of development efforts, and increasing the effectiveness of existing mechanisms and approaches. We are also supportive of efforts by World Bank, Global Fund and GAVI to establish, in close coordination with the WHO, a joint platform for health systems strengthening.
7. Mechanisms: We are not creating new funding mechanisms. Each donor is free to choose the mechanisms they consider most effective, including multilateral agencies, civil society partners, and direct bilateral support to developing country partners.
8. Global Targets:
a) Between 2010 and 2015, the G8 will work with multiple partners throughout the global community with the objective of achieving the targets set in 2001 for Millennium Development Goals 4 and 5:
i) reduce by two-thirds between 1990 and 2015, the under-five mortality rate;
ii) reduce by three-quarters, also between 1990 and 2015, the maternal mortality ratio; and
iii) achieve, by 2015, universal access to reproductive health.
b) Reaching these overall targets requires a major, sustained global effort including developed, emerging and developing countries, foundations, international agencies, non-governmental organizations, the private sector, and other constituencies.
9. Indicators: We are pleased that the WHO is working with relevant partners to identify a set of core indicators to measure progress in developing countries. These efforts should aim at harmonizing indicators and reporting requirements in order to reduce the burden of reporting on developing countries. As donors, we will work within these commonly agreed indicators. We will also support country reporting capacities and health information systems.
10. Methodology and Accountability: Recognizing the importance of transparency and accountability, we will track progress on delivering commitments through our accountability reporting which, in 2011, will focus on health and food security. We have also made public the methodology used to define our baseline and commitments.
Strengthening Civilian Security Systems
Muskoka, Canada, June 26, 2010
Building on our past efforts and those of our partners, the G8 commits to a set of three interrelated initiatives to strengthen civilian security systems, in accordance with our respective national priorities and programs. These initiatives will aim to reduce the intensity of conflict-related instability, protect civilians in situations of armed conflict, counter terrorism, combat piracy and transnational crime and help establish an enabling environment for growth, investment and democratic development.
I. Civilian Reinforcements for Stabilization, Peacebuilding and Rule of Law
Responding to post-conflict and post-crisis situations requires the early and sustained engagement of civilian experts. Civilian experts help build much needed capacity for security, governance, and the rule-of-law, through the transfer of knowledge and technology, mentoring and training, in full partnership with local institutions. Where necessary, they work along side military forces to help rebuild, reconstruct, and ensure lasting stability and security. Despite these requirements, there is a chronic shortage of ready and trained civilian experts, and few coordinated national, regional and international mechanisms available to effectively manage the magnitude and complexity of the required deployments. This limits the tools available to help states and regions tackle conflict, crime, terrorism and trafficking – vulnerabilities that affect us all.
G8 members will work with other international partners to help build capacity to recruit, roster, deploy, sustain and reintegrate civilian experts from developing countries and emerging donors. G8 members will also identify, prepare and support the deployment of additional experts from G8 countries across a range of disciplines for international engagement. This commitment will increase deployable civilian capacities to reinforce state institutions and advance the rule of law.
This commitment will respond to the needs expressed by our key partners, including the United Nations. The UN Secretary General’s 2009 Report on Peacebuilding in the immediate aftermath of conflict calls for enhanced global capacities in civilian deployments. The G8 is responding to this call.
II. Maritime Security Capacity
When coastlines are without effective governance, they offer a haven for criminals, traffickers, pirates and terrorists. With close to 90,000 ships plying the seas, growing problems of piracy and billions of dollars worth of drugs and other contraband on the move are threatening global stability and security. We reaffirm our commitment to fight piracy off the coast of Somalia, and are concerned with its spread to nearby waters.
By contributing to ongoing international efforts, the G8 will continue to assist key littoral states and regional organizations in maritime security. This will include capacity building in areas such as maritime governance, patrol aviation, coast guards, fisheries enforcement, and maritime intelligence sharing and fusion, as well as legislative, judicial, prosecutorial and correctional assistance. The goal will be to improve the operational effectiveness and response time of states and regional organizations in maritime domain awareness and sovereignty protection. These efforts will help to better secure coastlines and prosecute pirates, as called for by UN Security Council Resolution 1918 (2010). Moreover, they will help counter the growing links between criminal and terror networks that undermine the stability and governance of many states in Latin America, the Caribbean and Africa.
Our commitments will complement and support the efforts of our international partners and seek enhanced international cooperation.
III. International Police Peace Operations
Since the 2004 G8 Sea Island Summit, G8 members and other international partners have contributed to an improvement in the quality and availability of military and police forces for international peace operations. In view of the growing demand, significant gaps remain. The United Nations increasingly relies on Formed Police Units (FPUs) to provide strong and agile support for public order and security. FPUs are cohesive, self-sufficient teams of personnel who deploy as a group and are able to operate in high-risk environments. Not enough units are available to meet demand, and some of those deployed are not fully capable.
G8 members commit to mentoring, training and, where appropriate, equipping police, including new FPUs for duty on UN and AU peace operations. In this regard, G8 countries will also collaborate with other donors and police contributing countries, including developing countries and emerging donors. We will work to ensure that the new FPUs possess appropriate equipment and materiel, and are fully trained and prepared for deployment according to UN standards. This will entail capacity-building for regional training centres in Africa, Asia and the Americas, and continued support for the development and dissemination by the United Nations of doctrine, tactics, tasks and procedures for FPUs. This commitment will be implemented in close coordination with the UN and AU to ensure that their priority needs for on-going or new operations are addressed early.
 Apart from the G8, the following endorse the Muskoka Initiative: the Governments of Australia, the Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden and Switzerland, and the Bill and Melinda Gates Foundation, the Hewlett Foundation, the McCall McBain Foundation, the Packard Foundation, the Rockefeller Foundation, the United Nations Foundation, as well as the group of eight international agencies in the health sector (the World Health Organization, the Global Fund, UNICEF, GAVI, the World Bank, the UNFPA, UNAIDS, the Bill and Melinda Gates Foundation), the Heads of the Schools of Public Health of 22 universities in the United States and the Micronutrient Initiative based in Canada.
 While this figure includes five year commitments by most of the G8, it comprises an initial two-year commitment by the United States covering the years 2010 and 2011; the President’s six-year Global Health Initiative places increased emphasis on US programming to maternal health, including family planning, and child health. The United Kingdom has yet to determine its plans beyond 2011, but expects to increase its efforts over the period 2012-2015 so as to double the number of maternal, newborn and children’s lives saved. The EU will target to increase its already substantial support to maternal and child health during 2011-2013, and MNCH will also be addressed in the new Financial Framework as of 2013.
 The Muskoka Initiative was developed in consultation with expert bodies, including the United Nations, the World Health Organization, the Partnership for Maternal, Newborn and Child Health, the OECD, the G8 Academies of Science, and the Countdown to 2015. We have also consulted with the African Union and through the G8 Africa Personal Representative (APR) network.
THE G-20 TORONTO SUMMIT DECLARATION, June 26–27 2010.
1. In Toronto, we held our first Summit of the G-20 in its new capacity as the premier forum for our international economic co-operation.
2. Building on our achievements in addressing the global economic crisis, we have agreed on the next steps we should take to ensure a full return to growth with quality jobs, to reform and strengthen financial systems, and to create strong, sustainable and balanced global growth.
3. Our efforts to date have borne good results. Unprecedented and globally co-ordinated fiscal and monetary stimulus is playing a major role in helping to restore private demand and lending. We are taking strong steps toward increasing the stability and strength of our financial systems. Significantly increased resources for international financial institutions are helping stabilize and address the impact of the crisis on the world’s most vulnerable. Ongoing governance and management reforms, which must be completed, will also enhance the effectiveness and relevance of these institutions. We have successfully maintained our strong commitment to resist protectionism.
4. But serious challenges remain. While growth is returning, the recovery is uneven and fragile, unemployment in many countries remains at unacceptable levels, and the social impact of the crisis is still widely felt. Strengthening the recovery is key. To sustain recovery, we need to follow through on delivering existing stimulus plans, while working to create the conditions for robust private demand. At the same time, recent events highlight the importance of sustainable public finances and the need for our countries to put in place credible, properly phased and growth-friendly plans to deliver fiscal sustainability, differentiated for and tailored to national circumstances. Those countries with serious fiscal challenges need to accelerate the pace of consolidation. This should be combined with efforts to rebalance global demand to help ensure global growth continues on a sustainable path. Further progress is also required on financial repair and reform to increase the transparency and strengthen the balance sheets of our financial institutions, and support credit availability and rapid growth, including in the real economy. We took new steps to build a better regulated and more resilient financial system that serves the needs of our citizens. There is also a pressing need to complete the reforms of the international financial institutions.
5. Recognizing the importance of achieving strong job growth and providing social protection to our citizens, particularly our most vulnerable, we welcome the recommendations of our Labour and Employment Ministers, who met in April 2010, and the training strategy prepared by the International Labour Organization (ILO) in collaboration with the Organization for Economic Co-operation and Development (OECD).
6. We are determined to be accountable for the commitments we have made, and have instructed our Ministers and officials to take all necessary steps to implement them fully within agreed timelines.
The Framework for Strong, Sustainable and Balanced Growth
7. The G-20’s highest priority is to safeguard and strengthen the recovery and lay the foundation for strong, sustainable and balanced growth, and strengthen our financial systems against risks. We therefore welcome the actions taken and commitments made by a number of G-20 countries to boost demand and rebalance growth, strengthen our public finances, and make our financial systems stronger and more transparent. These measures represent substantial contributions to our collective well-being and build on previous actions. We will continue to co-operate and undertake appropriate actions to bolster economic growth and foster a strong and lasting recovery.
8. The Framework for Strong, Sustainable and Balanced Growth that we launched in Pittsburgh is the means to achieving our shared objectives, by assessing the collective consistency of policy actions and strengthening policy frameworks.
9. We have completed the first stage of our Mutual Assessment Process and we concluded that we can do much better. The IMF and World Bank estimate that if we choose a more ambitious path of reforms, over the medium term:
•global output would be higher by almost $4 trillion;
•tens of millions more jobs would be created;
•even more people would be lifted out of poverty; and
•global imbalances would be significantly reduced.
Increasing global growth on a sustainable basis is the most important step we can take in improving the lives of all of our citizens, including those in the poorest countries.
10. We are committed to taking concerted actions to sustain the recovery, create jobs and to achieve stronger, more sustainable and more balanced growth. These will be differentiated and tailored to national circumstances. We agreed today on:
•Following through on fiscal stimulus and communicating “growth friendly” fiscal consolidation plans in advanced countries that will be implemented going forward. Sound fiscal finances are essential to sustain recovery, provide flexibility to respond to new shocks, ensure the capacity to meet the challenges of aging populations, and avoid leaving future generations with a legacy of deficits and debt. The path of adjustment must be carefully calibrated to sustain the recovery in private demand. There is a risk that synchronized fiscal adjustment across several major economies could adversely impact the recovery. There is also a risk that the failure to implement consolidation where necessary would undermine confidence and hamper growth. Reflecting this balance, advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016. Recognizing the circumstances of Japan, we welcome the Japanese government’s fiscal consolidation plan announced recently with their growth strategy. Those with serious fiscal challenges need to accelerate the pace of consolidation. Fiscal consolidation plans will be credible, clearly communicated, differentiated to national circumstances, and focused on measures to foster economic growth.
•Strengthening social safety nets, enhancing corporate governance reform, financial market development, infrastructure spending, and greater exchange rate flexibility in some emerging markets;
•Pursuing structural reforms across the entire G-20 membership to increase and sustain our growth prospects; and
•Making more progress on rebalancing global demand.
Monetary policy will continue to be appropriate to achieve price stability and thereby contribute to the recovery.
11. Advanced deficit countries should take actions to boost national savings while maintaining open markets and enhancing export competitiveness.
12. Surplus economies will undertake reforms to reduce their reliance on external demand and focus more on domestic sources of growth.
13. We are committed to narrowing the development gap and that we must consider the impact of our policy actions on low-income countries. We will continue to support development financing, including through new approaches that encourage development financing from both public and private sources.
14. We recognize that these measures will need to be implemented at the national level and will need to be tailored to individual country circumstances. To facilitate this process, we have agreed that the second stage of our country-led and consultative mutual assessment will be conducted at the country and European level and that we will each identify additional measures, as necessary, that we will take toward achieving strong, sustainable, and balanced growth.
Financial Sector Reform
15. We are building a more resilient financial system that serves the needs of our economies, reduces moral hazard, limits the build up of systemic risk, and supports strong and stable economic growth. We have strengthened the global financial system by fortifying prudential oversight, improving risk management, promoting transparency, and reinforcing international co-operation. A great deal has been accomplished. We welcome the full implementation of the European Stabilization Mechanism and Facility, the EU decision to publicly release the results of ongoing tests on European banks, and the recent US financial reform bill.
16. But more work is required. Accordingly, we pledge to act together to achieve the commitments to reform the financial sector made at the Washington, London and Pittsburgh Summits by the agreed or accelerated timeframes. The transition to new standards will take into account the cumulative macroeconomic impact of the reforms in advanced and emerging economies. We are committed to international assessment and peer review to ensure that all our decisions are fully implemented.
17. Our reform agenda rests on four pillars.
18. The first pillar is a strong regulatory framework. We took stock of the progress of the Basel Committee on Banking Supervision (BCBS) towards a new global regime for bank capital and liquidity and we welcome and support its work. Substantial progress has been made on reforms that will materially raise levels of resilience of our banking systems. The amount of capital will be significantly higher and the quality of capital will be significantly improved when the new reforms are fully implemented. This will enable banks to withstand – without extraordinary government support – stresses of a magnitude associated with the recent financial crisis. We support reaching agreement at the time of the Seoul Summit on the new capital framework. We agreed that all members will adopt the new standards and these will be phased in over a timeframe that is consistent with sustained recovery and limits market disruption, with the aim of implementation by end-2012, and a transition horizon informed by the macroeconomic impact assessment of the Financial Stability Board (FSB) and BCBS. Phase-in arrangements will reflect different national starting points and circumstances, with initial variance around the new standards narrowing over time as countries converge to the new global standard.
19. We agreed to strengthen financial market infrastructure by accelerating the implementation of strong measures to improve transparency and regulatory oversight of hedge funds, credit rating agencies and over-the-counter derivatives in an internationally consistent and non-discriminatory way. We re-emphasized the importance of achieving a single set of high quality improved global accounting standards and the implementation of the FSB’s standards for sound compensation.
20. The second pillar is effective supervision. We agreed that new, stronger rules must be complemented with more effective oversight and supervision. We tasked the FSB, in consultation with the IMF, to report to our Finance Ministers and Central Bank Governors in October 2010 on recommendations to strengthen oversight and supervision, specifically relating to the mandate, capacity and resourcing of supervisors and specific powers which should be adopted to proactively identify and address risks, including early intervention.
21. The third pillar is resolution and addressing systemic institutions. We are committed to design and implement a system where we have the powers and tools to restructure or resolve all types of financial institutions in crisis, without taxpayers ultimately bearing the burden, and adopted principles that will guide implementation. We called upon the FSB to consider and develop concrete policy recommendations to effectively address problems associated with, and resolve, systemically important financial institutions by the Seoul Summit. To reduce moral hazard risks, there is a need to have a policy framework including effective resolution tools, strengthened prudential and supervisory requirements, and core financial market infrastructures. We agreed the financial sector should make a fair and substantial contribution towards paying for any burdens associated with government interventions, where they occur, to repair the financial system or fund resolution, and reduce risks from the financial system. We recognized that there are a range of policy approaches to this end. Some countries are pursuing a financial levy. Other countries are pursuing different approaches.
22. The fourth pillar is transparent international assessment and peer review. We have strengthened our commitment to the IMF/World Bank Financial Sector Assessment Program (FSAP) and pledge to support robust and transparent peer review through the FSB. We are addressing non-co-operative jurisdictions based on comprehensive, consistent, and transparent assessment with respect to tax havens, the fight against money laundering and terrorist financing and the adherence to prudential standards.
International Financial Institutions and Development
23. The International Financial Institutions (IFIs) have been a central part of the global response to the financial and economic crisis, mobilizing critical financing, including $750 billion by the IMF and $235 billion by the Multilateral Development Banks (MDBs). This has underscored the value of these institutions as platforms for our global co-operation.
24. We commit to strengthening the legitimacy, credibility and effectiveness of the IFIs to make them even stronger partners for us in the future.
25. Towards this end, we have fulfilled our Pittsburgh Summit commitment on the MDBs. This includes $350 billion in capital increases for the MDBs, allowing them to nearly double their lending. This new capital is joined to ongoing and important reforms to make these institutions more transparent, accountable and effective, and to strengthen their focus on lifting the lives of the poor, underwriting growth, and addressing climate change and food security.
26. We will fulfil our commitment to ensure an ambitious replenishment for the concessional lending facilities of the MDBs, especially the International Development Association and the African Development Fund.
27. We have endorsed the important voice reforms agreed by shareholders at the World Bank, which will increase the voting power of developing and transition countries by 4.59% since 2008.
28. We underscore our resolve to ensure ratification of the 2008 IMF Quota and Voice Reforms and expansion of the New Arrangements to Borrow (NAB).
29. We called for an acceleration of the substantial work still needed for the IMF to complete the quota reform by the Seoul Summit and in parallel deliver on other governance reforms, in line with commitments made in Pittsburgh.
30. Today we build on our earlier commitment to open, transparent and merit-based selection processes for the heads and senior leadership of all the IFIs. We will strengthen the selection processes in the lead up to the Seoul Summit in the context of broader reform.
31. We agreed to task our Finance Ministers and Central Bank Governors to prepare policy options to strengthen global financial safety nets for our consideration at the Seoul Summit. Our goal is to build a more stable and resilient international monetary system.
32. We stand united with the people of Haiti and are providing much-needed reconstruction assistance, including the full cancellation of all of Haiti’s IFI debt. We welcome the launching of the Haiti Reconstruction Fund.
33. We have launched the SME Finance Challenge and commit to mobilizing funding for implementation of winning proposals, including through the strong support of the MDBs. We have developed a set of principles for innovative financial inclusion.
34. We welcome the launch of the Global Agriculture and Food Security Program in fulfillment of our Pittsburgh commitment on food security, an important step to further implement the Global Partnership for Agriculture and Food Security, and invite further contributions. Looking ahead, we commit to exploring innovative, results-based mechanisms to harness the private sector for agricultural innovation. We call for the full implementation of the L’Aquila Initiative and the application of its principles.
Fighting Protectionism and Promoting Trade and Investment
35. While the global economic crisis led to the sharpest decline of trade in more than seventy years, G-20 countries chose to keep markets open to the opportunities that trade and investment offer. It was the right choice.
36. As such, we renew for a further three years, until the end of 2013, our commitment to refrain from raising barriers or imposing new barriers to investment or trade in goods and services, imposing new export restrictions or implementing World Trade Organization (WTO)-inconsistent measures to stimulate exports, and commit to rectify such measures as they arise. We will minimize any negative impact on trade and investment of our domestic policy actions, including fiscal policy and action to support the financial sector. We ask the WTO, OECD and UNCTAD to continue to monitor the situation within their respective mandates, reporting publicly on these commitments on a quarterly basis.
37. Open markets play a pivotal role in supporting growth and job creation, and in achieving our goals under the G-20 Framework for Strong, Sustainable and Balanced Growth. We ask the OECD, the ILO, World Bank, and the WTO to report on the benefits of trade liberalization for employment and growth at the Seoul Summit.
38. We therefore reiterate our support for bringing the WTO Doha Development Round to a balanced and ambitious conclusion as soon as possible, consistent with its mandate and based on the progress already made. We direct our representatives, using all negotiating avenues, to pursue this objective, and to report on progress at our next meeting in Seoul, where we will discuss the status of the negotiations and the way forward.
39. We commit to maintain momentum for Aid for Trade. We also ask international agencies, including the World Bank and other Multilateral Development Banks to step up their capacity and support trade facilitation which will boost world trade.
Other Issues and Forward Agenda
40. We agree that corruption threatens the integrity of markets, undermines fair competition, distorts resource allocation, destroys public trust and undermines the rule of law. We call for the ratification and full implementation by all G-20 members of the United Nations Convention against Corruption (UNCAC) and encourage others to do the same. We will fully implement the reviews in accordance with the provisions of UNCAC. Building on the progress made since Pittsburgh to address corruption, we agree to establish a Working Group to make comprehensive recommendations for consideration by Leaders in Korea on how the G-20 could continue to make practical and valuable contributions to international efforts to combat corruption and lead by example, in key areas that include, but are not limited to, adopting and enforcing strong and effective anti-bribery rules, fighting corruption in the public and private sectors, preventing access of corrupt persons to global financial systems, co-operation in visa denial, extradition and asset recovery, and protecting whistleblowers who stand-up against corruption.
41. We reiterate our commitment to a green recovery and to sustainable global growth. Those of us who have associated with the Copenhagen Accord reaffirm our support for it and its implementation and call on others to associate with it. We are committed to engage in negotiations under the UNFCCC on the basis of its objective provisions and principles including common but differentiated responsibilities and respective capabilities and are determined to ensure a successful outcome through an inclusive process at the Cancun Conferences. We thank Mexico for undertaking to host the sixteenth Conference of the Parties (COP 16) in Cancun from November 29 to December 20, 2010 and express our appreciation for its efforts to facilitate negotiations. We look forward to the outcome of the UN Secretary-General’s High-Level Advisory Group on Climate Change Financing which is, inter alia, exploring innovative financing.
42. We note with appreciation the report on energy subsidies from the International Energy Agency (IEA), Organization of the Petroleum Exporting Countries (OPEC), OECD and World Bank. We welcome the work of Finance and Energy Ministers in delivering implementation strategies and timeframes, based on national circumstances, for the rationalization and phase out over the medium term of inefficient fossil fuel subsidies that encourage wasteful consumption, taking into account vulnerable groups and their development needs. We also encourage continued and full implementation of country-specific strategies and will continue to review progress towards this commitment at upcoming summits.
43. Following the recent oil spill in the Gulf of Mexico we recognize the need to share best practices to protect the marine environment, prevent accidents related to offshore exploration and development, as well as transportation, and deal with their consequences.
44. We recognize that 2010 marks an important year for development issues. The September 2010 Millennium Development Goals (MDG) High Level Plenary will be a crucial opportunity to reaffirm the global development agenda and global partnership, to agree on actions for all to achieve the MDGs by 2015, and to reaffirm our respective commitments to assist the poorest countries.
45. In this regard it is important to work with Least Developed Countries (LDCs) to make them active participants in and beneficiaries of the global economic system. Accordingly we thank Turkey for its decision to host the 4th United Nations Conference on the LDCs in June 2011.
46. We welcome the Global Pulse Initiative interim report and look forward to an update.
47. Narrowing the development gap and reducing poverty are integral to our broader objective of achieving strong, sustainable and balanced growth and ensuring a more robust and resilient global economy for all. In this regard, we agree to establish a Working Group on Development and mandate it to elaborate, consistent with the G-20’s focus on measures to promote economic growth and resilience, a development agenda and multi-year action plans to be adopted at the Seoul Summit.
48. We will meet next in Seoul, Korea, on November 11-12, 2010. We will convene in November 2011 under the Chairmanship of France and in 2012 under the Chairmanship of Mexico.
49. We thank Canada for hosting the successful Toronto Summit.
The Framework for Strong, Sustainable and Balanced Growth
1. As a result of the extraordinary and highly co-ordinated policy actions agreed to at the Washington, London and Pittsburgh G-20 Summits, the global economy is recovering faster than was expected. Our decisive and unprecedented actions over the past two years have limited the downturn and spurred recovery.
2. Yet risks remain. Unemployment remains unacceptably high in many G-20 economies. The recovery is uneven across G-20 members both across advanced economies and between advanced and emerging economies. This poses risks to the continued economic expansion. There is a risk that global current account imbalances will widen again, absent further policy action. While considerable progress has been made in moving ahead on our financial sector repair and reform agenda, financial markets remain fragile and credit flows restrained. Concerns over large fiscal deficits and rising debt levels in some countries have also become a source of uncertainty and financial market volatility.
3. The G-20’s highest priority is to safeguard and strengthen the recovery and lay the foundation for strong, sustainable and balanced growth, including strengthening our financial systems against risks. We therefore welcome the actions taken and commitments made by a number of G-20 countries. Among more recent measures, we particularly welcome the full implementation of the European Financial Stability Mechanism and Facility; the EU decision to publicly release the results of ongoing tests on European banks; and the recent announcements of fiscal consolidation plans and targets by a number of G-20 countries. These represent substantial contributions to our collective well-being and build on our previous actions. We will continue to co-operate and undertake appropriate actions to bolster economic growth and foster a strong and lasting recovery.
4. The Framework for Strong, Sustainable and Balanced Growth we launched in Pittsburgh is the means to achieving our shared objectives. G-20 members have a responsibility to the community of nations to assure the overall health of the global economy. We committed to assess the collective consistency of our policy actions and to strengthen our policy frameworks in order to meet our common objectives. Through our collective policy action, we will ensure growth is sustained, more balanced, shared across all countries and regions of the world, and consistent with our development goals.
5. We have completed the first stage of our Mutual Assessment Process. As we requested in Pittsburgh, G-20 Finance Ministers and Central Bank Governors, with the support of the IMF, World Bank, OECD, ILO and other international organisations, have assessed the collective consistency of our individual policy frameworks and global prospects under alternative policy scenarios.
6. The assessment is that in the absence of a co-ordinated policy response: global output is likely to remain below its pre-crisis trend; unemployment remains above pre-crisis levels in most countries; fiscal deficits and debt in some advanced economies reach unacceptably high levels; and, global current account imbalances, which narrowed during the crisis, widen again. Moreover, this outlook is subject to considerable downside risks.
7. We concluded that we can do much better. The IMF and World Bank estimate that if we choose a more ambitious path of reforms, over the medium term, we could:
•raise global output by up to $4 trillion;
•create an estimated 52 million jobs;
•lift up to 90 million people out of poverty; and
•significantly reduce global current account balances.
If we act in a co-ordinated manner, all regions are better off, now and in the future. Moreover, increasing global growth on a sustainable basis is the most important step we can take in improving the lives of all, including those in the poorest countries.
8. We are committed to taking concerted actions to sustain the recovery, create jobs and to achieve stronger, more sustainable and more balanced growth. These will be differentiated and tailored to national circumstances. We agreed today on:
•Following through on fiscal stimulus and communicating “growth-friendly” fiscal consolidation plans in advanced countries and that will be implemented going forward;
•strengthening social safety nets, enhancing corporate governance reform, financial market development, infrastructure spending, and increasing exchange rate flexibility in some emerging markets;
•pursuing structural reforms across the entire G-20 membership to increase and sustain our growth prospects; and
•Making further progress on rebalancing global demand.
Monetary policy will continue to be appropriate to achieve price stability and thereby contribute to the recovery.
9. We agreed to follow through on fiscal stimulus and communicating “growth friendly” fiscal consolidation plans in advanced countries that will be implemented going forward. Sound fiscal finances are essential to sustain recovery, provide flexibility to respond to new shocks, ensure the capacity to meet the challenges of aging populations, and avoid leaving future generations with a legacy of deficits and debt. The path of adjustment must be carefully calibrated to sustain the recovery in private demand. There is a risk that synchronized fiscal adjustment across several major economies could adversely impact the recovery. There is also a risk that the failure to implement consolidation where necessary would undermine confidence and hamper growth. Reflecting this balance, advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016. Recognizing the circumstances of Japan, we welcome the Japanese government’s fiscal consolidation plan announced recently with their growth strategy. Those with serious fiscal challenges need to accelerate the pace of consolidation. Fiscal consolidation plans will be credible, clearly communicated, differentiated to national circumstances, and focused on measures to foster economic growth.
10. We have agreed on a set of principles to guide these fiscal consolidation plans by advanced economies:
•Fiscal consolidation plans will be credible. They will be based on prudent assumptions with respect to economic growth and our respective fiscal positions, and they will identify specific measures to achieve a target path that ensures fiscal sustainability. Strengthened budgetary frameworks and institutions can help underpin the credibility of consolidation strategies.
•The time to communicate our medium-term fiscal plans is now. We will elaborate clear and credible plans that put our fiscal finances on a sustainable footing. The speed and timing of withdrawing fiscal stimulus and reducing deficits and debt will be differentiated for and tailored to national circumstances, and the needs of the global economy. However, it is clear that consolidation will need to begin in advanced economies in 2011, and earlier for countries experiencing significant fiscal challenges at present.
•Fiscal consolidation will focus on measures that will foster economic growth. We will look at ways to use our fiscal resources more efficiently, to help reduce the overall cost of our interventions while targeting resources to where they are most needed. In addition, we will focus on structural reforms that will promote long-term growth.
11. Advanced deficit countries should take actions to boost national savings while maintaining open markets and enhancing export competitiveness.
12. Surplus economies will undertake reforms to reduce their reliance on the external demand and focus more on domestic sources of growth. This will help strengthen their resilience to external shocks and promote more stable growth. To do this, advanced surplus economies will focus on structural reforms that support increased domestic demand. Emerging surplus economies will undertake reforms tailored to country circumstances to:
•Strengthen social safety nets (such as public health care and pension plans), corporate governance and financial market development to help reduce precautionary savings and stimulate private spending;
•Increase infrastructure spending to help boost productive capacity and reduce supply bottlenecks; and
•Enhance exchange rate flexibility to reflect underlying economic fundamentals. Excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. Market-oriented exchange rates that reflect underlying economic fundamentals contribute to global economic stability.
13. Across all G-20 members, we recognize that structural reforms can have a substantial impact on economic growth and global welfare. We will implement measures that will enhance the growth potential of our economies in a manner that pays particular attention to the most vulnerable. Reforms could support the broadly-shared expansion of demand if wages grow in line with productivity. It will be important to strike the right balance between policies that support greater market competition and economic growth and policies that preserve social safety nets consistent with national circumstances. Together these measures will also help unlock demand. These include:
•Product, service and labour market reforms in advanced economies, particularly those economies that may have lost some productive capacity during the crisis. Labour market reforms might include: better targeted unemployment benefits and more effective active labour market policies (such as job retraining, job search and skills development programs, and raising labour mobility). It might also include putting in place the right conditions for wage bargaining systems to support employment. Product and service market reforms might include strengthening competition in the service sector; reducing barriers to competition in network industries, professional services and retail sectors, encouraging innovation and further reducing the barriers to foreign competition.
•Reducing restrictions on labour mobility, enhancing foreign investment opportunities and simplifying product market regulation in emerging market economies.
•Avoiding new protectionist measures.
•Completing the Doha Round to accelerate global growth through trade flows. Open trade will yield significant benefits for all and can facilitate global rebalancing.
•Actions to accelerate financial repair and reform. Weaknesses in financial sector regulation and supervision in advanced economies led to the recent crisis. We will implement the G-20 financial reform agenda and ensure a stronger financial system serves the needs of the real economy. While not at the centre of the crisis, financial sectors in some emerging economies need to be developed further so that they can provide the depth and breadth of services required to promote and sustain high rates of economic growth and development. It is important that financial reforms in advanced economies take into account any adverse effects on financial flows to emerging and developing economies. Vigilance is also needed to ensure open capital markets and avoid financial protectionism.
14. We welcome the recommendations of our Labour and Employment Ministers, who met in April 2010, on the employment impacts of the global economic crisis. We reaffirm our commitment to achieving strong job growth and providing social protection to our most vulnerable citizens. An effective employment policy should place quality jobs at the heart of the recovery. We appreciate the work done by the International Labour Organization in collaboration with the OECD on a training strategy that will help equip the workforce with the skills required for the jobs of today and those of tomorrow.
15. We are committed to narrowing the development gap and that we must consider the impact of our policy actions on low-income countries. We will continue support development financing, including through new approaches that encourage development financing from both public and private sources. The crisis will have long lasting impact on the development trajectories of poor countries in every region of the world. Among these effects, developing countries are likely to face increased challenges in securing financing from both public and private sources. Many of us have already taken steps to help address this shortfall by implementing innovative approaches to financing, such as advance market commitments, the SME challenge and recent progress with respect to financial inclusion. Low-income countries have the potential to contribute to stronger and more balanced global growth, and should be viewed as markets for investment.
16. These measures need to be implemented at the national level and tailored to individual country circumstances. We welcome additional measures announced by some G-20 members aimed at meeting our shared objectives.
17. To facilitate this process, the second stage of our country-led, consultative mutual assessment will be conducted at the country and European level. Each G-20 member will identify the measures it is taking to implement the policies we have agreed upon today to ensure stronger, more sustainable and balanced growth. We ask our Finance Ministers and Central Bank Governors to elaborate on these measures and report on them when we next meet. We will continue to draw on the expertise of the IMF, World Bank, OECD, ILO and other international organisations, as necessary. These measures will form the basis of our comprehensive action plan that will be announced in the Seoul Summit. As we pursue strong, sustainable and more balanced growth, we continue to encourage work on measurement methods to take into account social and environmental dimensions of economic development.
18. The policy commitments we are making today, along with the significant policy measures we have already taken, will allow us to reach our objective of strong, sustainable and balanced growth, the benefits of which will be felt both within the G-20 and across the globe.
Financial Sector Reform
1. The financial crisis has imposed huge costs. This must not be allowed to happen again. The recent financial volatility has strengthened our resolve to work together to complete financial repair and reform. We need to build a more resilient financial system that serves the needs of our economies, reduces moral hazard, limits the build-up of systemic risk and supports strong and stable economic growth.
2. Collectively we have made considerable progress toward strengthening the global financial system by fortifying prudential oversight, improving risk management, promoting transparency and continuously reinforcing international co-operation. We welcome the strong financial regulatory reform bill in the United States.
3. But there is more to be done. Further repair to the financial sector is critical to achieving sustainable global economic recovery. More work is required to restore the soundness and enhance the transparency of banks’ balance sheets and markets; and improve the corporate governance and risk management of financial firms in order to strengthen the global financial system and restore the credit needed to fuel sustainable economic growth. We welcome the decision of EU leaders to publish the results of ongoing tests on European banks to reassure markets of the resilience and transparency of the European banking system.
4. We pledge to act together to achieve the commitments to reform the financial sector made at the Washington, London and Pittsburgh Summits by the agreed or accelerated timeframes. Transition horizons will take into account the cumulative macroeconomic impact of the reforms in advanced and emerging economies
Capital and Liquidity
5. We agreed that the core of the financial sector reform agenda rests on improving the strength of capital and liquidity and discouraging excessive leverage. We agreed to increase the quality, quantity, and international consistency of capital, to strengthen liquidity standards, to discourage excessive leverage and risk taking, and reduce procyclicality.
6. We took stock of the progress of the Basel Committee on Banking Supervision (BCBS) towards a new global regime for bank capital and liquidity and we welcome and support its work. Substantial progress has been made on reforms that will materially raise levels of resilience of our banking systems.
•The amount of capital will be significantly higher when the new reforms are fully implemented.
•The quality of capital will be significantly improved to reinforce banks’ ability to absorb losses.
7. We support reaching agreement, at the time of the Seoul Summit, on a new capital framework that would raise capital requirements by:
•establishing a new requirement that each bank hold in Tier 1 capital, at a minimum, an increasing share of common equity, after deductions, measured as a percentage of risk-weighted assets, that enables them to withstand with going concern fully-loss-absorbing capital – without extraordinary government support – stresses of a magnitude associated with the recent financial crisis.
•moving to a globally consistent and transparent set of conservative deductions generally applied at the level of common equity, or its equivalent in the case of non-joint stock companies, over a suitable globally-consistent transition period.
8. Based on our agreement at the Pittsburgh Summit that Basel II will be adopted in all major centres by 2011, we agreed that all members will adopt the new standards and these will be phased in over a timeframe that is consistent with sustained recovery and limits market disruption, with the aim of implementation by end-2012, and a transition horizon informed by the macroeconomic impact assessment of the Financial Stability Board (FSB) and BCBS.
9. Phase-in arrangements will reflect different national starting points and circumstances, with initial variance around the new standards narrowing over time as countries converge to the new global standard. Existing public sector capital injections will be grandfathered for the extent of the transition.
10. We reiterated support for the introduction of a leverage ratio as a supplementary measure to the Basel II risk-based framework with a view to migrating to Pillar I treatment after an appropriate transition period based on appropriate review and calibration. To ensure comparability, the details of the leverage ratio will be harmonized internationally, fully adjusting for differences in accounting.
11. We acknowledged the importance of the quantitative impact study currently being conducted by the BCBS that measures the potential impact of the new Basel standards and will ensure that the new capital and liquidity standards are of high quality and adequately calibrated. The BCBS- FSB macroeconomic impact study will inform the development of the phase-in period of the new standards.
12. We welcomed the BCBS agreement on a co-ordinated start date not later than 31 December 2011 for all elements of the revised trading book rules.
13. We support the BCBS’ work to consider the role of contingent capital in strengthening market discipline and helping to bring about a financial system where the private sector fully bears the losses on their investments. Consideration of contingent capital should be included as part of the 2010 reform package.
14. We called upon the FSB and the BCBS to report on progress of the full package of reform measures by the Seoul Summit. We recognize the critical role of the financial sector in driving a robust economy. We are committed to design a financial system which is resilient, stable and ensures the continued availability of credit.
More Intensive Supervision
15. We agreed that new, stronger rules must be complemented with more effective oversight and supervision. We are committed to the Basel Committee’s Core Principles for Effective Banking Supervision and tasked the FSB, in consultation with the International Monetary Fund (IMF), to report to our Finance Ministers and Central Bank Governors in October 2010 on recommendations to strengthen oversight and supervision, specifically relating to the mandate, capacity and resourcing of supervisors and specific powers which should be adopted to proactively identify and address risks, including early intervention.
Resolution of Financial Institutions
16. We are following through on our commitment to reduce moral hazard in the financial system. We are committed to design and implement a system where we have the powers and tools to restructure or resolve all types of financial institutions in crisis, without taxpayers ultimately bearing the burden. These powers should facilitate “going concern” capital and liquidity restructuring as well as “gone concern” restructuring and wind-down measures. We endorsed and have committed to implement our domestic resolution powers and tools in a manner that preserves financial stability and are committed to implement the ten key recommendations on cross-border bank resolution issued by the BCBS in March 2010. In this regard, we support changes to national resolution and insolvency processes and laws where needed to provide the relevant national authorities with the capacity to co-operate and co-ordinate resolution actions across borders.
17. We agree that resolution regimes should provide for:
•Proper allocation of losses to reduce moral hazard and protect taxpayers;
•Continuity of critical financial services, including uninterrupted service for insured depositors;
•Credibility of the resolution regime in the market;
•Minimization of contagion;
•Advanced planning for orderly resolution and transfer of contractual relationships; and,
•Effective co-operation and information exchange domestically and among jurisdictions in the event of a failure of a cross-border institution.
Addressing Systemically Important Financial Institutions
18. We welcomed the FSB’s interim report on reducing the moral hazard risks posed by systemically important financial institutions. We recognized that more must be done to address these risks. Prudential requirements for such firms should be commensurate with the cost of their failure. We called upon the FSB to consider and develop concrete policy recommendations to effectively address problems associated with and resolve systemically important financial institutions by the Seoul Summit. This should include more intensive supervision along with consideration of financial instruments and mechanisms to encourage market discipline, including contingent capital, bail-in options, surcharges, levies, structural constraints, and methods to haircut unsecured creditors.
19. We welcomed the substantial progress that has been made regarding the development of supervisory colleges and crisis management groups for the major complex financial institutions identified by the FSB.
20. We continue to work together to develop robust agreed-upon institution-specific recovery and rapid resolution plans for major cross-border institutions by the end of 2010. We further committed to continue working on ensuring co-operation among jurisdictions in financial institution resolution proceedings.
Financial Sector Responsibility
21. We agreed the financial sector should make a fair and substantial contribution towards paying for any burdens associated with government interventions, where they occur, to repair the financial system or fund resolution.
22. To that end, we recognized that there is a range of policy approaches. Some countries are pursuing a financial levy. Other countries are pursuing different approaches. We agreed the range of approaches would follow these principles:
•Reduce risks from the financial system;
•Protect the flow of credit in good times and bad times;
•Take into account individual countries’ circumstances and options; and,
•Help promote a level playing field.
23. We thanked the IMF for its work in this area.
Financial Market Infrastructure and Scope of Regulation
24. We agreed on the need to strengthen financial market infrastructure in order to reduce systemic risk, improve market efficiency, transparency and integrity. Global action is important to minimize regulatory arbitrage, promote a level playing field, and foster the widespread application of the principles of propriety, integrity, and transparency.
25. We pledged to work in a co-ordinated manner to accelerate the implementation of over-the-counter (OTC) derivatives regulation and supervision and to increase transparency and standardization. We reaffirm our commitment to trade all standardized OTC derivatives contracts on exchanges or electronic trading platforms, where appropriate, and clear through central counterparties (CCPs) by end-2012 at the latest. OTC derivative contracts should be reported to trade repositories (TRs). We will work towards the establishment of CCPs and TRs in line with global standards and ensure that national regulators and supervisors have access to all relevant information. In addition we agreed to pursue policy measures with respect to haircut-setting and margining practices for securities financing and OTC derivatives transactions that will reduce procyclicality and enhance financial market resilience. We recognized that much work has been done in this area. We will continue to support further progress in implementing these measures.
26. We committed to accelerate the implementation of strong measures to improve transparency and regulatory oversight of hedge funds, credit rating agencies and over-the-counter derivatives in an internationally consistent and non-discriminatory way. We also committed to improve the functioning and transparency of commodities markets. We call on credit rating agencies to increase transparency and improve quality and avoid conflicts of interest, and on national supervisors to continue to focus on these issues in conducting their oversight.
27. We committed to reduce reliance on external ratings in rules and regulations. We acknowledged the work underway at the BCBS to address adverse incentives arising from the use of external ratings in the regulatory capital framework, and at the FSB to develop general principles to reduce authorities’ and financial institutions’ reliance on external ratings. We called on them to report to our Finance Ministers and Central Bank Governors in October 2010.
28. We acknowledged the significant work of the International Organization of Securities Commission (IOSCO) to facilitate the exchange of information amongst regulators and supervisors, as well as IOSCO’s principles regarding the oversight of hedge funds aimed at addressing related regulatory and systemic risks.
29. We called on the FSB to review national and regional implementation of prior G-20 commitments in these areas and promote global policy cohesion and to assess and report to our Finance Ministers and Central Bank Governors in October 2010 if further work is required.
30. We re-emphasized the importance we place on achieving a single set of high quality improved global accounting standards. We urged the International Accounting Standards Board and the Financial Accounting Standards Board to increase their efforts to complete their convergence project by the end of 2011.
31. We encouraged the International Accounting Standards Board to further improve the involvement of stakeholders, including outreach to emerging market economies, within the framework of the independent accounting standard setting process.
Assessment and Peer Review
32. We pledged to support robust and transparent independent international assessment and peer review of our financial systems through the IMF and World Bank’s Financial Sector Assessment Program and the FSB peer review process. The mutual dependence and integrated nature of our financial system requires that we all live up to our commitments. Weak financial systems in some countries pose a threat to the stability of the international financial system. International assessment and peer review are fundamental in making the financial sector safer for all.
33. We reaffirmed the FSB’s principal role in the elaboration of international financial sector supervisory and regulatory policies and standards, co-ordination across various standard-setting bodies, and ensuring accountability for the reform agenda by conducting thematic and country peer reviews and fostering a level playing field through coherent implementation across sectors and jurisdictions. To that end, we encourage the FSB to look at ways to strengthen its capacity to keep pace with growing demands.
34. We called upon the FSB to expand upon and formalize its outreach activities beyond the membership of the G-20 to reflect the global nature of our financial system. We recognized the prominent role of the FSB, along with other important organizations including, the IMF and World Bank. These organizations, along with other international standard setters and supervisory authorities, play a central role to the health and well-being of our financial system.
35. We fully support the FSB’s thematic peer reviews as a means of fostering consistent cross-country implementation of financial and regulatory policies and to assess their effectiveness in achieving their intended results. We welcomed the FSB’s first thematic peer review report on compensation, which showed progress in the implementation of the FSB’s standards for sound compensation, but full implementation is far from complete. We encouraged all countries and financial institutions to fully implement the FSB principles and standards by year-end. We call on the FSB to undertake ongoing monitoring in this area and conduct a second thorough peer review in the second quarter of 2011. We also look forward to the results of the FSB’s thematic review of risk disclosures.
36. We acknowledged the significant progress in the FSB’s country review program. These reviews are an important complement to the IMF/World Bank Financial Sector Assessment Program and provide a forum for peer learning and dialogue to address challenges. Three reviews will be completed this year.
Other International Standards and Non-co-operative Jurisdictions
37. We agreed to consider measures and mechanisms to address non-co-operative jurisdictions based on comprehensive, consistent and transparent assessment, and encourage adherence, including by providing technical support, with the support of the international financial institutions (IFIs).
38. We fully support the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and welcomed progress on their peer review process, and the development of a multilateral mechanism for information exchange which will be open to all interested countries. Since our meeting in London in April 2009, the number of signed tax information agreements has increased by almost 500. We encourage the Global Forum to report to Leaders by November 2011 on progress countries have made in addressing the legal framework required to achieve an effective exchange of information. We also welcome progress on the Stolen Asset Recovery Program, and support its efforts to monitor progress to recover the proceeds of corruption. We stand ready to use countermeasures against tax havens.
39. We fully support the work of the Financial Action Task Force (FATF) and FATF-Style Regional Bodies in their fight against money laundering and terrorist financing and regular updates of a public list on jurisdictions with strategic deficiencies. We also encourage the FATF to continue monitoring and enhancing global compliance with the anti-money laundering and counter-terrorism financing international standards.
40. We welcomed the implementation of the FSB’s evaluation process on the adherence to prudential information exchange and international co-operation standards in all jurisdictions.
Enhancing the Legitimacy, Credibility and Effectiveness of the IFIs and
Further Supporting the Needs of the Most Vulnerable
1. The global economic and financial crisis has demonstrated the value of the International Financial Institutions (IFIs) as instruments for co-ordinating multilateral action. These institutions were on the front-line in responding to the crisis, mobilizing $985 billion in critical financing. In addition, the international community and the IFIs mobilized over $250 billion in trade finance.
2. The crisis also demonstrated the importance of delivering further reforms. As key platforms for our co-operation, we are committed to strengthening the legitimacy, credibility and effectiveness of the IFIs, to ensure that they are capable of helping us maintain global financial and economic stability and supporting the growth and development of all their members.
3. To enhance the legitimacy and effectiveness of the IFIs, we committed in London and Pittsburgh to support new open, transparent and merit-based selection processes for the heads and senior leadership of all International Financial Institutions. We will strengthen these processes in the lead up to the Seoul Summit in the context of broader reform.
4. Since the start of the global financial crisis, the MDBs have been playing an important role in the global response by exceeding our London commitment, in providing $235 billion in lending, more than half of which has come from the World Bank Group. At a time when private sector sources of finance were diminished, this lending was critical to global stabilization. Now more than ever, the MDBs are key development partners for many countries.
5. We have fulfilled our commitment to ensure that the MDBs have appropriate resources through capital increases for the major MDBs, including the Asian Development Bank (AsDB), the African Development Bank (AfDB), the Inter-American Development Bank (IADB), the European Bank for Reconstruction and Development (EBRD), the World Bank Group, notably the International Bank for Reconstruction and Development (IBRD) and the International Finance Corporation (IFC). As major shareholders at these institutions, we have worked together with other members to increase their capital base by 85%, or approximately $350 billion. Overall, their total lending to developing countries will grow from $37 billion per year to $71 billion per year. This will improve their ability to address the increasing demand in the short and medium terms and to have enough resources to support their members. We support efforts to implement these agreements as quickly as possible.
|MDB||Capital Increase||Pre-Crisis Annual Lending(*a)||New Annual Lending(*b)|
|AfDB||200% increase||$1.8 B||$6 B|
|AsDB||200% increase||$5.8 B||$10 B|
|EBRD(*c)||50% increase||$5.3 B||$11 B|
|IADB(*d)||70% increase||$6.7 B||$12 B|
|IBRD||30% increase||$12.1 B||$15 B|
|IFC||$200M selective capital increase||$5.4 B||$17 B|
|Total||85% increase in MDB capital||$37 B||$71 B|
*All dollar figures USD
*c mostly callable, of a temporary nature, for CRR4;
*d Includes agreement to relieve Haiti’s debt to the IADB
6. We recognize the acute development needs in Africa, the region the furthest behind on the Millennium Development Goals. For this reason, the African Development Bank will be capitalized for substantial growth, with a 200% increase in its capital and corresponding tripling of its annual lending levels, to strengthen capacity to support the region’s long-term growth and development.
7. To ensure that the IFC has the resources necessary for its continued growth, we will consider a long-term hybrid instrument to shareholders and earnings retention, to complement the recent selective capital increase linked to voice reforms.
8. In order to support low income countries, given their need to borrow at more concessional terms, we will fulfill our commitment to ensure an ambitious replenishment for the concessional lending facilities of the MDBs, especially the International Development Association (IDA) and the African Development Fund, which are undergoing financial replenishments this year. We welcome the fact that many G-20 members have taken important steps to join as donors to these institutions. We reiterated our support for fairer and wider burden sharing.
9. We have also fulfilled our commitment to ensure that these capital increases are joined to ongoing and important institutional reforms to make the MDBs more effective, efficient and accountable. These include:
•Commitments to further support the poorest countries in a financially prudent way, including by transferring resources, where feasible, from MDB net income to their respective lending facilities for low income countries and increasing their investment activities in low income countries and frontier regions. This will ensure that the new capital resources benefit both low income and middle income countries.
•Specific actions for greater transparency, stronger accountability, improved institutional governance deeper country ownership, more decentralization and use of country systems where appropriate, and enhanced procurement guidelines, new ways of managing and tracking results and financial contributions, strengthen knowledge management, ensuring the right human resources with appropriate diversity, better implementing environmental and social safeguards, sound risk management, and ensuring financial sustainability with pricing linked to expenses, and a commitment to continue to reduce administrative expenses and make them more transparent.
•Deeper support for private sector development, including through more private sector operations and investment, as a vital component of sustainable and inclusive development.
•Recommitting to their core development mandates and taking up a greater role in the provision of global solutions to transnational problems, such as climate change and food security.
10. With these reform commitments, we are building not just bigger MDBs, but better MDBs, with more strategic focus on lifting the lives of the poor, underwriting growth, promoting security, and addressing the global challenges of climate change and food security. Implementation of these reforms has already begun, and we will continue to ensure that this work is completed and that further reforms are undertaken where necessary.
World Bank Group Voice Reforms
11. We welcomed the agreement on the World Bank’s voice reform to increase the voting power of developing and transition countries by 3.13% consistent with the agreement at the Pittsburgh Summit. When combined with the 1.46% increase agreed in the previous phase of the reforms, this will provide a total shift of 4.59% to DTCs, bringing their overall voting power to 47.19%. We committed to continue moving over time towards equitable voting power, while protecting the smallest nations, by arriving at a dynamic formula which primarily reflects countries’ evolving economic weight and the World Bank’s development mission. We also endorsed voice reforms at the IFC which will provide a total shift of 6.07%, to bring DTC voting power to 39.48%.
Debt Relief for Haiti
12. We stand united with the people of Haiti as they struggle to recover from the devastation wrought by the earthquake in January, and we join other donors in providing assistance in this difficult time, including through the Haiti Reconstruction Fund set up by the World Bank, the Inter-American Development Bank and the United Nations. To ensure that Haiti’s recovery efforts can focus on its reconstruction action plan, rather than the debt obligations of its past, our Finance Ministers agreed last April to support full cancellation of Haiti’s debts to all IFIs, including through burden sharing of the associated costs, where necessary. We are pleased that an agreement on a framework for cancelling such debt has been reached at the IMF; the World Bank, the International Fund for Agriculture Development, and soon at the Inter-American Development Bank. We will contribute our fair shares of the associated costs as soon as possible. We will report on progress at the Seoul Summit.
13. We are committed to strengthening the legitimacy, credibility and effectiveness of the IMF to ensure it succeeds in carrying out its mandate. Important actions have been taken by the G-20 and the international community since the onset of the crisis, including the mobilization of $750 billion to support IMF members’ needs for crisis financing. The IMF raised $250 billion in new resources through immediate bilateral loans and note purchase agreements, to be subsequently incorporated into a $500 billion expansion of the New Arrangements to Borrow (NAB). The IMF also implemented a $250 billion new general allocation of SDRs to bolster the foreign exchange reserves of all members. Along with important surveillance and lending reforms, including a new early-warning exercise and the creation of new precautionary instruments such as the Flexible Credit Line, these actions have significantly increased the IMF’s crisis response capacity. However, important work remains to be completed to fully reform the IMF.
14. We called for an acceleration of the substantial work still needed for the IMF to complete the quota reform by the Seoul Summit and in parallel deliver on other governance reforms, in line with commitments made in Pittsburgh. Modernizing the IMF’s governance is a core element of our effort to improve the IMF’s credibility, legitimacy, and effectiveness. We recognize that the IMF should remain a quota-based organization and that the distribution of quotas should reflect the relative weights of its members in the world economy, which have changed substantially in view of the strong growth in dynamic emerging market and developing countries. To this end, we are committed to a shift in quota share to dynamic emerging market and developing countries of at least five percent from over-represented to under-represented countries using the current IMF quota formula as the basis to work from. We are also committed to protecting the voting share of the poorest in the IMF. As part of this process, we agree that a number of other critical issues will need to be addressed, including: the size of any increase in IMF quotas, which will have a bearing on the ability to facilitate change in quota shares; the size and composition of the Executive Board; ways of enhancing the Board’s effectiveness; and the Fund Governors’ involvement in the strategic oversight of the IMF. Staff diversity should be enhanced.
15. We underscored our resolve to ensure the IMF has the resources it needs so that it can play its important role in the world economy. The majority of G-20 members have ratified the 2008 IMF Quota and Voice Reforms, fulfilling an important commitment made in London. Those members who have yet to ratify commit to doing so by the Seoul Summit. This action will not just enhance the legitimacy of the IMF by increasing the voice and participation of developing countries, it will also provide the IMF with $30 billion in new quota resources. We call on all IMF members to ratify the agreement this year.
16. A number of G-20 members have already formally accepted the recently agreed reforms to the expanded NAB, which will provide a significant back-stop to IMF quota resources, consolidating over $500 billion for IMF lending to countries in crisis. Other participating G-20 members will complete the acceptance process by the next meeting of G-20 Finance Ministers and Central Bank Governors. We call on all existing and new NAB participants to do the same.
17. G-20 members committed to ensure that the IMF’s concessional financing for the poorest countries be expanded by $6 billion through the proceeds from the agreed sale of IMF gold, consistent with the IMF’s new income model, and the employment of internal and other resources. We are delivering. Some G-20 members have supported this commitment with additional loan and subsidy resources for the Poverty Reduction and Growth Trust (PRGT) and some others plan to contribute in the coming months.
18. We acknowledged a need for national, regional and international efforts to deal with capital flow volatility, financial fragility, and prevent crisis contagion. We task our Finance Ministers and Central Bank Governors to prepare policy options, based on sound incentives, to strengthen global financial safety nets for our consideration at the Seoul Summit. In line with these efforts, we also call on the IMF to make rapid progress in reviewing its lending instruments, with a view to further reforming them as appropriate. In parallel, IMF surveillance should be enhanced to focus on systemic risks and vulnerabilities wherever they may lie. Our goal is to build a more stable and resilient international monetary system.
Further Supporting the Needs of the Most Vulnerable
19. We have made significant progress in supporting the poorest countries during the crisis and must continue to take measures to assist the most vulnerable and must ensure that the poorest countries benefit from our efforts to restore global growth. We recognize the urgency of this, and are committed to meeting the Millennium Development Goals by 2015 and will reinforce our efforts to this end, including through the use of Official Development Assistance.
20. We have made concrete progress on our commitment to improving access to financial services for the poor and to increasing financing available to small- and medium-sized enterprises (SMEs) in developing countries.
21. Adequately financed small and medium-sized businesses are vital to job creation and a growing economy, particularly in emerging economies. We have launched the SME Finance Challenge aimed at finding the most promising models for public-private partnerships that catalyze finance for SMEs. We are committed to mobilizing the funding needed to implement winning proposals, including through the strong support of the MDBs. We welcome the strong support of the MDBs for scalable and sustainable SME financing proposals, including those from the Challenge in partnership with the private sector. We look forward to announcing the winning proposals of the SME Finance Challenge and to receiving recommendations to scale-up successful SME finance models at the Seoul Summit.
22. We have developed a set of principles for innovative financial inclusion, which will form the basis of a concrete and pragmatic action plan for improving access to financial services amongst the poor. This action plan will be released at the Seoul Summit.
23. At the Pittsburgh Summit, we recognized the importance of sustained funding and targeted investments to improve long-term food security in low income countries. We welcome the launch of the Global Agriculture and Food Security Program (GAFSP), which will provide predictable financing for low income countries to improve agricultural productivity, raise rural incomes, and build sustainable agricultural systems. We are particularly pleased that the fund has approved inaugural grants totalling $224 million for Bangladesh, Rwanda, Haiti, Togo, and Sierra Leone. We also support the development of the private sector window of the GAFSP, which will increase private sector investments to support small and medium sized agri-businesses and farmers in poor countries. We welcome the support already received, and encourage additional donor contributions to both the public and private sector windows of the GAFSP.
24. There is still an urgency to accelerate research and development to close agricultural productivity gaps, including through regional and South-South co-operation, amidst growing demands and mounting environmental stresses, particularly in Africa. The private sector will be critical in the development and deployment of innovative solutions that provide concrete results on the ground. We commit to exploring the potential of innovative, results-based mechanisms such as advance market commitments to harness the creativity and resources of the private sector in achieving breakthrough innovations in food security and agriculture development in poor countries. We will report on progress at the Seoul Summit.
Deficit-reduction agreement clear, welcome, Editorial, June 27 2010.
But fulfilment of the G20 commitment may prove elusive in some cases.
An agreement between G20 leaders over the speed and depth of deficit reduction and on stabilizing or reducing government debt-to-GDP ratios among developed countries, though subject to national vagaries, is nonetheless a clear and welcome declaration of intent. In time, the stimulus tap is to be closed, the state shrunk, and the market allowed to resume its lead role in the economy.
There is nothing that binds countries to commitments made in the final communiqué, which in fact specifically states that measures be “differentiated for and tailored to national circumstances.” Japan, for example, was given “greater latitude” in meeting the commitment to at least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016. French President Nicolas Sarkozy claimed the targets were “goals rather than commitments.” And while the United States agreed to the pledge, Tim Geithner, U.S. Treasury Secretary, and Lawrence Summers, director of the White House's National Economic Council, earlier opined on the need for “a commitment to reducing long-term deficits, but not at the price of short-term growth.”
That is the challenge they all face: how quickly can deficits be reduced without harming growth? But the converse is also true: How long can they fail to reduce deficits without harming growth?
Almost all large national economies are expanding again, meaning that stimulus does less. Meanwhile the lagging impact of the spending that has already gone out the door – rising interest on debt payments – grows. That crowds out program spending, including on the social safety nets that face increasing strain in the most advanced economies. And higher deficits can lead to a tightening of private credit, putting further job creation at risk.
Fulfilment of the G20 commitment may prove elusive in some cases. However, as Stephen Harper said, there will be “market pressure” to conform to the G20 intentions. There is a positive inducement as well: OECD Secretary-General Angel Gurria told The Globe editorial board last week that “adjustments themselves are a relatively modest proportion of the economy,” and that we “underestimate the positive impact a well-designed and well-defined adjustment program can have on confidence.”
Failure to get national finances under control will harm offending economies. It may well be, then, less about form than substance than is apparent at first blush, and that would signify a victory not just for Mr. Harper, who pushed for the spending cuts, but to the global economy.
You don’t recover from a debt crisis with more debt, Gwyn Morgan, June 27 2010.
Hard to imagine a major economy with a greater need to tackle the deficit quickly than the U.S.
The normal format for global gatherings is for the leaders to avoid personal engagement until they arrive, followed by rubber stamping of a communiqué previously worked out by their advance entourages. The Canadian G8/G20 meetings broke sharply from that pattern. And the driving issue behind that change were sharply differing views on public spending.
In the run-up to the gatherings, summit host Prime Minister Stephen Harper sent a letter to G20 leaders calling for a wind down in stimulus spending and a focus on deficit reduction. A letter from U.S. President Barack Obama cautioned that premature “consolidation” (a new euphemism for spending reductions) could cause “renewed economic hardships and recession.” European Union leaders, fresh from grappling with a credit and currency crisis that threatens the very survival of the euro zone, declared that the bigger risk is failure to control runaway deficits. Responding to Mr. Obama’s call for “unity of purpose to provide the policy [spending] support necessary to keep economic growth strong,” German Chancellor Angela Merkel stated, “It’s not about growth at any price, it’s about sustainable growth,” and unleashed two of her ministers to expand on her government’s position. German Finance Minister Wolfgang Schaeuble told reporters “Nobody can seriously dispute that excessive public debts, not only in Europe, are one of the main causes of the crisis,” while Economy Minister Rainer Bruederle said the U.S. must join Europe in “urgently” cutting spending. EU President Herman Van Rompuy said, “Failure to correct unsustainable deficits would ultimately lead to fatal loss of credibility and confidence with lasting economic damage.” British Prime Minister David Cameron noted that “for some countries, such as our own, there is a need to get on and tackle the deficit more quickly.”
With a national debt topping $13-trillion (U.S.), a deficit expected to be another $1.5-trillion in the 2010-2011 fiscal year, it’s hard to imagine a major economy with a greater need to “tackle the deficit more quickly” than the United States. Mr. Obama’s letter referenced plans to cut the U.S. deficit by half by 2013 and “work to reduce our fiscal deficit to 3 per cent of GDP by 2015,” which would mean cutting the current deficit by 70 per cent, or more than $1-trillion. To say that this seems like dreaming in Technicolor is an understatement. Mr. Obama’s expensive health-care reforms, along with rising Social Security costs, are certain to increase program spending, while interest payments on the national debt will grow substantially.
(At the weekend G20 meeting in Toronto, leaders agreed on a plan for advanced countries to cut deficits in half by 2013 and stabilize debt loads by 2016.)
But even the incredible U.S. deficit doesn’t tell the whole story. American states face a combined budget shortfall of some $300-billion and some are in even more financial trouble than the euro zone’s so-called PIGS (Portugal, Italy, Greece and Spain). But in the U.S. case, the member of the union in the most trouble is also the biggest, and its deficit position is worse than that of Greece. The state of California faces a 30-per-cent shortfall on next year’s budget of some $125-billion, or a whopping $37-billion. Obama adviser Warren Buffett has said that a federal bailout of troubled states is “inevitable” if they are to avoid default on state bonds.
A look at countries that have experienced profound economic failure shows a convergence of forces creating an unrecoverable “debt spiral.” Huge fiscal deficits, ever-rising interest costs on a mushrooming national debt, and growth capital sucked from the private sector to finance public sector deficits – they all lead financial markets to conclude that a country’s central bank will either default on its debt or resort to printing money, causing catastrophic currency devaluation.
Who could have predicted that this Group of 20 meeting would see the chronically profligate Europeans counselling fiscal prudence, while the world’s traditional economic bedrock and issuer of the global reserve currency spends it way toward disaster? The euro zone crisis demonstrated that financial markets can lose confidence in the bonds and currency of sovereign states in a heartbeat. Remember that the combined deficits of borrowing states must be financed by private investors and countries that are running fiscal surpluses, such as China and Middle Eastern oil producers. A loss of confidence in U.S. federal and state bonds, and in the world’s reserve currency itself, could trigger an economic conflagration that would making the recent global financial crisis seem like a walk in the park.
The U.S. administration is playing an extremely high-risk game that could see Mr. Obama go down as the most damaging president in history. You don’t recover from alcoholism by taking another drink, and you don’t recover from a debt crisis with more debt. It’s past time that John Maynard Keynes’s long-discredited deficit spending theories be tucked back in his grave. Even if they are, it will take decades to repair the damage already done.
G20 Summit Nonviolent Prayer Vigil, June 27 2010.
G20 SUMMIT NONVIOLENT PRAYER VIGIL
Join the Student Christian Movement and friends for a nonviolent, prayerful action, to remember the victims of social and economic oppression in the G20 countries, and of IMF/World Bank economic policies worldwide, and to express our hope that the world leaders gathered in Toronto will act in the interests of all people, rather than just the economic elite.
We will gather on Sunday, June 27, at 2 pm, on the grounds of St James Anglican Cathedral (King and Church), and walk to the barricade, where we will remain in prayer and vigil for as long as possible. Some of the participants may choose to obstruct the entry point or the road, and may be arrested, but those who don't choose to risk arrest can also be full participants in the vigil. Nonviolence and inclusiveness are important
values underlying our planning.
Legal observers will be present, and legal help will be available to those who may be arrested.
We encourage everyone interested in participating to attend, if possible, a planning/training session on Thursday June 24, at 6 pm, at St Simon the Apostle, 525 Bloor St E. It is especially important that anyone who may risk arrest should come to this session.
For more information, or to sign up for the planning/training session,
contact Maggie Helwig, email@example.com, 416-526-5438.
Black Bloc protester doesn't want to be stereotyped, CP, February 25 2010.
Anti-Olympic protesters will have their last chance Sunday to draw world attention to their issues, but they appear headed into their so-called celebratory street party more divided and disparate than they were even as the loose coalition that organized a massive demonstration on the Games' opening day.
Momentum seemed to go out of the anti-Olympic movement after protesters, masked and dressed entirely in black, trashed display windows of the downtown Bay, the superstore selling Olympic merchandise, during a march the morning after opening ceremonies.
"Certainly there was a lot of discussion, some of it very heated and probably overall very healthy within different aspects of the anti-Olympic movement about whether or not some of the things that happened . . . were helpful or not," said Chris Shaw, one of the anti-Olympic movement's prime movers.
The 1,500 protesters -- a police estimate -- were mostly peaceful as they marched through downtown Vancouver the day the Games opened.
The next day, some participants among 200 demonstrators in the so-called Heart Attack march caused mayhem, breaking the Bay's windows, tossing newspaper boxes into the street and clashing with riot-equipped police before eventually being convinced to disband.
In the early going, spokesmen for the protest movement carefully parsed their words to avoid condemning the vandalism directly. At least one claimed the broken windows and spray-painted vehicles didn't amount to violence because it was against property, not people.
But then David Eby, a prominent social justice lawyer, executive director of the B.C. Civil Liberties Association and an outspoken critic of the Games' heavy security presence, flatly rejected the group's justifications and praised police for their moderate approach.
He got a pie in the face at an anti-Olympic forum for his efforts.
"Since then, there is more nuanced discussion going on," said Shaw.
Shy out of town thugs?
The tactics of masked Black Bloc protesters -- they're not a formal organization so even using capital letters is debatable -- have become a focal point even as activists want to keep attention on their message.
Vancouver open-line shows buzzed with indignation over the property damage and police labelled the Black Bloc criminals and thugs from out of town.
Black Bloc proponents are notoriously media shy, but in a rare interview one of them challenged the stereotype.
"I'm a father and a husband," the soft-spoken man said in an interview with The Canadian Press. He didn't want his name used.
"I'm finishing my second degree with a 3.9-and-change grade-point average. I have no criminal record."
He was one of seven people arrested in the Feb. 13 protest on suspicion of mischief but he was released after eight hours without being charged. Two others are scheduled to make court appearances next month.
The man didn't want his appearance to be described -- to ensure, he said, the attention is on his message -- but it's safe to say he'd look out of place at a chamber of commerce luncheon.
Born in London, Ont., and turning 30 next month, he is studying for a masters degree in theology at the University of British Columbia, looking at the intersection between religious ideas and politics.
He said he's worked with the poor and disadvantaged, including drug-addicted street kids, for the last 10 years here and in Toronto.
It was Toronto's bid for the 2008 Summer Games -- won by Beijing -- that he said helped sensitize him against the Olympics. He said he remembers Toronto squatters being rounded up on the eve of a visit by the International Olympic Committee.
"When the IOC left town, they were kicked back on the street again without any of their belongings," he recalled. "That, for me, was an awakening moment when I thought maybe something is wrong with this Olympic industry."
He said he joined the Heart Attack march to help try to block a main downtown intersection connecting Olympic venues.
"Most of the standard ways of pursuing change I find to be largely ineffective," he said.
"I thought the protest on Saturday had a realistic chance of achieving its objective and I wanted to contribute to that."
Instead he was arrested for creating a disturbance as he tried to leave the protest after riot police had smothered it. He said he wasn't wearing his mask at the time.
"My cookies disappeared too. That was disappointing," he said. "I had this little bag of cookies that my wife made and they disappeared somewhere along the way when I was given my belongings back."
The Black Bloc protesters actions were intended to show people just how intensely they felt about the Olympics' adverse impact on the poor, he said.
He seemed unfazed by the negative reaction they got from bystanders and later the public at large.
"People can also react (negatively) in a situation one way and then they can go and they can think about it and they can choose to educate themselves," he said.
Eby, despite the hazing he's gotten from people who would normally be his allies, said that's "the best possible spin you could put on it."
"But the question is, is there not a way to cut out the middle step of people being repulsed and simply get to the point of doing the education work?"
Chris Shaw said he believes many people who might have been ambivalent about the Games and potential supporters for the protesters were turned off by the vandalism. On the other hand, it could also have served as a morale booster for the movement's base.
"Sometimes ... if you're talking to people within your own community who are feeling disempowered and are feeling like their voices aren't heard and they're angry and don't now how to respond, that sort of thing actually energizes them," he said.
Protest coverage: all live, all the time, all shallow, John Doyle, June 27 2010.
It was black vs. black on the streets and no one asked why
In the 77th minute of the pulsating World Cup game between Ghana and the U.S.A. - then tied 1-1 – the text crawled across the TV screen. G20 protests, violent clashes. Some people looked at their iPhone or BlackBerry. Some glanced out the window. Nobody moved.
It was happening, is all. The customary theatre of the protests. Without even seeing the footage we could all picture it – kids in black hoodies and bandanas throwing stones, breaking windows and, probably, setting a police car on fire. That’s precisely what it was, of course.
See, the G20 is the Oscars of the protest-world. Tons of media attention, not much context. Photo-ops and fame. And television coverage of the G20 Summit and the protests in Toronto has been drearily predictable, and mostly as mindless as Oscars coverage. The protests – representing nothing more than infantile, pay-attention-to-me-Mommy exhibitionism and destruction – are photo-opportunities as much as the politicians’ statements and handshakes, are photo-ops. Getting on television is pretty much the point of everything, and television loves live, violent action as it loves movie stars.
Thus, so much of our TV news seemed to be salivating at the prospect of protests. Dramatic footage! Riot police! Gangs of roving youths. Running battles on the street! And it became stupendously obvious in the lead-up to Friday and Saturday that local TV news was worshipping at the altar of local police authorities. Local TV news tends to gravitate toward authority on a daily basis anyway, but in Toronto in the last week the sense of paranoia fostered by the police was absorbed and spread to a ridiculous extent.
As a result, obvious questions were never asked. No context for the rioting and destruction that was to come on Saturday in Toronto was ever provided. This was an occasion in which all the shallowness and predictability of TV news was glaringly illuminated.
Far as I can tell, nobody ever asked anyone in authority – government or police – if the grandiosity of the security preparations in downtown Toronto wasn’t an invitation, a challenge even, to the pseudo-anarchists to attack and do their worst. Nobody in the TV news racket seemed willing to ask why, if “security” was the main concern, the G20 was being held in the core of a major city in the first place.
Nobody on TV was prepared, or indeed intellectually equipped, one suspects, to see the enormous fences and the extreme disruption of downtown life and business, as a symbolic act of hostility against a population, and as symbolic examples of the remoteness of the powerful from ordinary people.
Further, nobody on TV was ever willing to suggest that there is a bizarre symbiotic relationship between the forces comprised of black-clad riot police and the “Black Bloc” anarchists. I mean, seriously – these are two groups of guys getting dressed up in black to go out and do some damage to somebody or something. No matter what they tell you, me or those perky TV news reporters, these all just guys itching for a showdown.
While I’m at it, it would have been useful if some TV pundit had suggested that anyone planning to protest in Toronto during the G20 would make a point with more pith and less aggravation if they’d simply stayed home and issued a press release. Thus the staggering $1.2-billion cost of summit security would have been revealed as the ludicrous excess it surely was.
But nobody was going to make that suggestion and nobody was going to stay home. Everybody wants to be seen on TV, making a speech, cheering, carrying a banner or pointing a finger at somebody else. Look, ma! Top of the world, ma!
What we all saw on TV, eventually, was perplexing - empty streets, burning police cars, the smashing of shop windows, vast armies of police moving this way and that, in a bizarre dance. Some reporters expressed shock - the ones who have never been in the middle of a truly terrifying clash between authorities and protesters. We saw $1.2-billion of taxpayer money evaporating, and nobody asking: Why?
Brutal spectacle failed a city and its people, John Cruickshank, June 28 2010.
The G20 security strategy has been spectacularly successful at cocooning the world’s leading politicians and staggeringly ineffective at protecting the property and peace of mind of Torontonians. And the one, inevitably, led to the other.
By bringing in thousands of heavily armed strangers and throwing up barricades everywhere to regular traffic, frightening off good and decent citizens, Canadian authorities created a ghost town in the heart of our city.
Perfect for the political leaders. Protesters were kept blocks away from where the deliberations were going on.
And most protesters conducted themselves faultlessly as the global good and great met behind rings of gulag-like fencing and battalions of police beating Plexiglas shields with batons in a primitive show of might.
It was, however, less than perfect for the city, its businesses and its inhabitants. The only force that can prevent vandalism and mayhem in a city is the presence of its population. Surely that was the lesson every urban planner learned from looking south to the hollowed-out urban war zones of the United States in the 1960s, 1970s and 1980s.
No police force, no matter how large, how well armed, how empowered to limit the civil rights of citizens, can stop vandalism in the empty shell of a city. Canadian authorities have proved that two days and nights running.
The strategy that ensured G20 leaders would never have to see a Canadian who wasn’t a politician, a police officer or a waiter lacked even a glimmer of common sense when it came to the security of Toronto and Torontonians.
They took our city to hold a meeting and bullied us out of the core, damaging the commerce of thousands of merchants and inconveniencing the entire population. Then, they failed to protect our property. Along Yonge St., as self-described anarchists were smashing stores unopposed, terrified merchants and their staffs sought shelter behind counters and in basements. If these establishments had been set alight, all of the thousands of fearsomely equipped police would have been able to do little more to save our citizens than they did to save their burning cruisers.
For the last few days, the city has looked like a vast reality TV set, where heavily garbed gladiators in black, burdened under bullet-proof vests, guns, walkie-talkies, shields and batons, try to chase down a wild, quick-footed band of anti-gladiators in black sweat suits and bandanas. And it cost us $1.2-billion to stage and choreograph this grossly unequal contest.
Canadian authorities knew that this overweening show of paramilitary hubris would draw the violent dregs of nihilism from around the world. Previous summits offered stark and certain warnings. Given that, the attempt to provide security for the city and its inhabitants has been a sad and disturbing failure.
What is the critical lesson?
Don’t even try to hold international political conferences with this kind of explosive ideological charge in the heart of a major urban centre. You sacrifice either the safety of the politicians or the safety of the city.
The idea that this was an effective way to show off Toronto to foreign guests is bewilderingly stupid.
Canadian authorities created a city no citizen could recognize and no visitor could admire. Then, they allowed a pack of brutes to trash it.
God’s Grandeur, Gerard Manley Hopkins, 1877.
The world is charged with the grandeur of God.
It will flame out, like shining from shook foil;
It gathers to a greatness, like the ooze of oil
Crushed. Why do men then now not reck his rod?
Generations have trod, have trod, have trod;
And all is seared with trade; bleared, smeared with toil;
And wears man’s smudge and shares man’s smell: the soil
Is bare now, nor can foot feel, being shod.
And for all this, nature is never spent;
There lives the dearest freshness deep down things;
And though the last lights off the black West went
Oh, morning, at the brown brink eastward, springs—
Because the Holy Ghost over the bent
World broods with warm breast and with ah! bright wings.
No Sex Please, We’re Middle Class, Camille Paglia, June 25 2010.
Will women soon have a Viagra of their own? Although a Food and Drug Administration advisory panel recently rejected an application to market the drug flibanserin in the United States for women with low libido, it endorsed the potential benefits and urged further research. Several pharmaceutical companies are reported to be well along in the search for such a drug.
The implication is that a new pill, despite its unforeseen side effects, is necessary to cure the sexual malaise that appears to have sunk over the country. But to what extent do these complaints about sexual apathy reflect a medical reality, and how much do they actually emanate from the anxious, overachieving, white upper middle class?
In the 1950s, female “frigidity” was attributed to social conformism and religious puritanism. But since the sexual revolution of the 1960s, American society has become increasingly secular, with a media environment drenched in sex.
The real culprit, originating in the 19th century, is bourgeois propriety. As respectability became the central middle-class value, censorship and repression became the norm. Victorian prudery ended the humorous sexual candor of both men and women during the agrarian era, a ribaldry chronicled from Shakespeare’s plays to the 18th-century novel. The priggish 1950s, which erased the liberated flappers of the Jazz Age from cultural memory, were simply a return to the norm.
Only the diffuse New Age movement, inspired by nature-keyed Asian practices, has preserved the radical vision of the modern sexual revolution. But concrete power resides in America’s careerist technocracy, for which the elite schools, with their ideological view of gender as a social construct, are feeder cells.
In the discreet white-collar realm, men and women are interchangeable, doing the same, mind-based work. Physicality is suppressed; voices are lowered and gestures curtailed in sanitized office space. Men must neuter themselves, while ambitious women postpone procreation. Androgyny is bewitching in art, but in real life it can lead to stagnation and boredom, which no pill can cure.
Meanwhile, family life has put middle-class men in a bind; they are simply cogs in a domestic machine commanded by women. Contemporary moms have become virtuoso super-managers of a complex operation focused on the care and transport of children. But it’s not so easy to snap over from Apollonian control to Dionysian delirium.
Nor are husbands offering much stimulation in the male display department: visually, American men remain perpetual boys, as shown by the bulky T-shirts, loose shorts and sneakers they wear from preschool through midlife. The sexes, which used to occupy intriguingly separate worlds, are suffering from over-familiarity, a curse of the mundane. There’s no mystery left.
The elemental power of sexuality has also waned in American popular culture. Under the much-maligned studio production code, Hollywood made movies sizzling with flirtation and romance. But from the early ’70s on, nudity was in, and steamy build-up was out. A generation of filmmakers lost the skill of sophisticated innuendo. The situation worsened in the ’90s, when Hollywood pirated video games to turn women into cartoonishly pneumatic superheroines and sci-fi androids, fantasy figures without psychological complexity or the erotic needs of real women.
Furthermore, thanks to a bourgeois white culture that values efficient bodies over voluptuous ones, American actresses have desexualized themselves, confusing sterile athleticism with female power. Their current Pilates-honed look is taut and tense — a boy’s thin limbs and narrow hips combined with amplified breasts. Contrast that with Latino and African-American taste, which runs toward the healthy silhouette of the bootylicious Beyoncé.
A class issue in sexual energy may be suggested by the apparent striking popularity of Victoria’s Secret and its racy lingerie among multiracial lower-middle-class and working-class patrons, even in suburban shopping malls, which otherwise trend toward the white middle class. Country music, with its history in the rural South and Southwest, is still filled with blazingly raunchy scenarios, where the sexes remain dynamically polarized in the old-fashioned way.
On the other hand, rock music, once sexually pioneering, is in the dumps. Black rhythm and blues, born in the Mississippi Delta, was the driving force behind the great hard rock bands of the ’60s, whose cover versions of blues songs were filled with electrifying sexual imagery. The Rolling Stones’ hypnotic recording of Willie Dixon’s “Little Red Rooster,” with its titillating phallic exhibitionism, throbs and shimmers with sultry heat.
But with the huge commercial success of rock, the blues receded as a direct influence on young musicians, who simply imitated the white guitar gods without exploring their roots. Step by step, rock lost its visceral rawness and seductive sensuality. Big-ticket rock, with its well-heeled middle-class audience, is now all superego and no id.
In the 1980s, commercial music boasted a beguiling host of sexy pop chicks like Deborah Harry, Belinda Carlisle, Pat Benatar, and a charmingly ripe Madonna. Late Madonna, in contrast, went bourgeois and turned scrawny. Madonna’s dance-track acolyte, Lady Gaga, with her compulsive overkill, is a high-concept fabrication without an ounce of genuine eroticism.
Pharmaceutical companies will never find the holy grail of a female Viagra — not in this culture driven and drained by middle-class values. Inhibitions are stubbornly internal. And lust is too fiery to be left to the pharmacist.