Panacea of ‘Structural Reforms

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Panacea of ‘Structural Reforms’
 
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The main commitments of the G-20 leadership, touted at the Brisbane summit, sound utterly hollow.

Reading the communiqué issued at the end of the G-20 Leaders’ Summit at Brisbane over the weekend of 15-16 November, what struck us was the out-and-out hollowness, the utter emptiness of the main commitments made therein. Whether it is about lifting the global economy out of the doldrums, or committing the urgently required funds for mitigation and adaptation in the face of irreversible climate change, or even creating the edifice of genuine partnership
and cooperation among the G-20 leaders, they are all in a complete mess.

According to the official communication, the G-20 countries – whose economies together make up around 85% of the world gross domestic product (GDP) – committed “to work in partnership” to raise the G-20’s GDP “by at least an additional [our emphasis] 2% by 2018”. Indeed, if the commitments made are fully implemented, it is claimed that they “will deliver 2.1%”, and thereby “add more than $2 trillion to the global economy and create millions of jobs”. How can we take this with any measure of seriousness? Basically it is a question of quantifying the cumulative impact of G-20 member-countries’ economic growth strategies, and one needs to admit the high degree of unreliability in any such quantitative assessment, but the official declaration is so cocksure about its figure of 2.1%.

And pray, what are those economic commitments that have to be fully implemented? “Structural reforms” are at the core of them – put in ordinary words, more of laissez-faire and hire and fire, the latter, euphemistically called “labour market flexibility”. The communiqué rightly speaks of the global economy “being held back by a shortfall in demand”, but then goes on to call for putting debt as a percentage of GDP “on a sustainable path”, that is, in the absence of additional mobilisation of tax revenue, resorting to slashing civilian government expenditure as a proportion of GDP and thereby instituting more severe fiscal austerity. Indeed, while officially the G-20 leadership calls for “partnership” to achieve its growth targets, a section decided to cold-shoulder the Chinese plan to establish an Asian Infrastructure Investment Bank to finance infrastructure projects in the Asia-Pacific region.

Even as such a huge opportunity to access finance for investment in the real economies of the Asia-Pacific is foregone, the US stock markets are continuing to be driven sky-high through the availability of trillions of dollars at rock-bottom interest rates to Wall Street for the financial speculators to have a field day. The Japanese economy has plunged once more into recession; the Eurozone is on the brink of a third, or, is it, fourth, recession since 2008, and indeed, the so-called emerging market economies have suffered a sharp slowdown. But with expansionary fiscal policy ruled out on ideological grounds, and monetary policy apparently reaching its outer limits, the G-20 leadership now wants “structural reforms” to lead the way.

What about all the claim of “partnership” and cooperation among and between the G-20’s main leaders? The leading representatives of US imperialism and its junior partners, whether the Australian Prime Minister Tony Abbott or the British Prime Minister David Cameron, had, before the summit even opened, openly peddled lies and other distortions about the Russian President, Vladimir Putin. And at the Asia-Pacific Economic Cooperation (APEC) summit earlier in the week, in Beijing, the US President Barack Obama hosted a private meeting of potential members of the US-sponsored Trans-Pacific Partnership in the US embassy, a regional free trade agreement in the making that excludes Russia and China. He even lobbied to jettison the China-sponsored, APEC-promoted plan for the establishment of a Free Trade Area for the Asia-Pacific.

Frankly, all the so-called commitment

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