In an age characterized by the death of trust we find comfort in being able to blame everyone. It is entirely reasonable that thousands will protest, hopefully peacefully, against bankers who stuck their noses in the trough, regulators who turned away and governments who kept smiling as the tax take grew. The truth is they could just as easily protest against themselves for blindly succumbing to this leveraged society. We must now clear up the mess. Amid all the experts who failed to call this disaster, only one got it right. It was Bob Dylan, who said: “Money doesn’t talk. It swears.”
The system was always skewed and its rewards asymmetric. We built a global economy that excluded half of the globe. We marginalised the productive capacity of the three billion people who live on less than $2 a day. By excluding them, we deprived them of the income they need to buy our stuff and consigned them to ill-health, lack of education and conflict. Instability is inherent in asymmetry. It will topple over. The first task of the Group of 20 nations must be to bring the peripheral economies and their people into the centre.
In Tanzania last month I spoke at an International Monetary Fund conference attended by the finance ministers of Africa. It was billed as a chance to show off improved results and offer proof that the continent is an attractive home for foreign investment. Instead, the conference was hijacked by events and became a strategy session on how to steer through a financial storm they did not create and ensure Africa is heard at the G20. The human impact of the financial crisis on the poor parts of the world are incalculable.
“Fiscal stimulus” is just another word for aid and “liquidating toxic assets” is not different from “debt cancellation”–the things that Africa has been demanding for years. It is no different except for the speed and scale with which it was delivered when we are the beneficiaries. It is all so wearing for an ageing activist.
We now need a small fiscal stimulus for Africa. It will be a tiny fraction of what we are spending on bailing out the banks. The Overseas Development Institute and the National Institute of Economic and Social Research show that a counter-cyclical investment of US$50 billion for Africa would start paying for itself immediately. U.S. and Chinese exports would rise by US$1.4 billion in 2009, UK exports by US$750 million, German exports by US$2 billion. Currently the G20 is proposing more resources for the Asian Development Bank, but what about the equally critical African Bank? Many “shovel-ready” projects need funding. It is clear that African growth is part of the solution that reboots the global economy.
The G20 should insist that the Group of Eight leading industrialized nations deliver their political promises on aid to help pay for this stimulus. We should praise the U.K., Germany and the U.S. for living up to theirs, but rebuke Italy, the current president of the G8, for its shameful and cynical dishonesty in signing in Gleneagles a commitment to the poor of our world and doing nothing to meet it. Italy must address this before the G8 meeting in Sardinia in July. If it do not come up with a viable plan, its presidency should be withdrawn. What is the point of having a country leading a meeting that has no intention of living up to its word?
The G20 is rightly exercised by protectionism. A retreat would mark a return to nationalism, militarism and national bankruptcy. It would ruin nations and in their ruin they would strike out. We must, at least, end the pernicious regime of agricultural subsidies and implement a fast-track, stand-alone trade deal for the poorest countries, most of which are in Africa.
Further, I do not want to hang the bankers. I want to put the more shamefaced and remorseful of them to work, Profumo-style. Let them serve their penance by using their skills for a purpose other than self gain. We should employ them in an institution that tracks down cash stolen by corrupt figures in Africa and passed through global launderettes such as the City of London to nestle in an obscure Alpine bank to be used later for a coup.
This is a crisis not just in the system, but of it. But the death of distance will not be reversed and globalization is no longer a philosophical abstraction to be argued over. The essence of globalisation must be enforced co-operation. It will be impossible to construct a new global financial architecture without permanently including the voices of the poor on the key global institutions. It is beyond time that we bring the poor in from the bitter cold.
Bob Geldof is a writer, musician, businessman, long-time advocate for Africa, and former music editor of the Georgia Straight.