Development

Why put development on the G20 agenda?

Although global poverty levels have fallen considerably over the past two decades, developing countries still have enormous needs that are not being met.

Developing countries must deal with rising inequality and serious social risks: only 20% of the world's population enjoys universal social benefits. Total public expenditure on Social Security is only 4.1% of GDP in low-income countries, compared with 19.4% in high-income countries (21% in France).

The G20, the number one forum for coordinating global economic policies, has a duty to fight poverty and work for growth in developing countries. In doing so, it is working for shared prosperity, because developing countries may represent new areas for growth.

Emerging countries have become key players in global economic governance and development. It is up to the G20 improve global economic governance and help those institutions in charge of it to evolve. Thus China, the world's second largest economy, is set to become the World Bank's third-largest shareholder and one of the major multilateral donors for development. More generally, greater South-South cooperation means that development assistance is no longer the exclusive domain of advanced countries.

t is thus crucial for the G20 to bring emerging and advanced countries together around the same table in order to coordinate development policies. This indeed was what was decided at Seoul: nine areas for action were identified as part of the Multi-Year Action Plan on Development.

The four priorities of the French presidency of the G20

1. Strengthen infrastructures in developing countries

In sub-Saharan Africa, poor infrastructures dampen growth by more than two percentage points per year. According to the World Bank, investment in infrastructures in this region ($45 billion) covers less than half of its annual needs ($93 billion).

In response, the G20 will commission a high-level panel, consisting of internationally-recognised public and private experts, to identify infrastructure projects and the means for financing them that bring together both public and private sectors. The G20 will also ask the primary regional and multilateral development banks to coordinate their actions with respect to a number of infrastructure projects.

2. Ensure food security

In order to feed a global population that will reach an estimated 9 billion inhabitants by 2050, world agricultural production must grow by 70%, and investment in developing countries must increase by $83 billion per year. According to the FAO, the commodity price spikes that led to rioting in 2008 in developing countries could return in 2011.

The French presidency will propose measures to stimulate agricultural production supply and promote responsible agricultural investments. In addition, policy governance and coordination in the area of agricultural products will be improved, in order to prevent and manage crises better. Finally, to combat the harmful consequences of agricultural price volatility, France will call upon the major international organisations to carry out joint efforts to develop risk hedging tools.

3. Extending social protection

Vulnerability is one of the major roadblocks to both economic and human development. Social protection thus has a key role to play in developing countries.

The French presidency will ask international organisations to draw up a list of best practices in terms of social protection, so these might be extended and duplicated elsewhere.

4. Mobilising resources for development

Development must be able to rely on internal sources of financing; the G20 will mobilise the international organisations in the fight against tax avoidance.

In addition, innovative sources of financing can and should be mobilised. France will work with the private sector and civil society on means to expand existing financing mechanisms to other sources.