ILPS statement on G20 Summit in Hamburg, refers to economic crisis and extreme global debt

Issued by the Office of the Chairperson
International League of Peoples’ Struggle
July 6, 2017

The G20 Heads of State and Government will meet once again on 7 and 8 July 2017 in Hamburg, Germany. They have met annually since 2008 to address issues related to global financial stability, economic growth and international trade. In recent years they have expanded their agenda to include other issues closely linked with the global economy, including climate change, development policy, labour market and employment policy, the spread of digital technology and even counter-terrorism.

After 12 summits, the G20 is nowhere near meeting its avowed objectives. Despite claims of economic recovery, growth in almost all the advanced capitalist economies has barely exceeded 2 percent per year since 2010, after contracting in 2008-2009. The ultraloose monetary policies they have adopted have merely succeeded in creating new property bubbles as well as a surge in speculative capital flows and booms in credit and asset markets in so-called emerging economies. This is exacerbating financial fragility rather than enhancing stability.

Moreover, these policies have accelerated the build up of debt both in the imperialist centers and underdeveloped countries. The global stock of debt has grown by over $50 trillion since 2008, surging to a record $217 trillion as of the first quarter of 2017. This is more than three times the output (GDP) of the entire global economy in one year.

Some 10 percent of this global debt stock or around $20 trillion is owed by the US. But China’s debt is rising the fastest, followed by Brazil and India among the so-called emerging economies. Reuters reports that ´emerging´ economies have increased their debt by $3 trillion to $56 trillion, equivalent to 218 percent of their combined GDP. Two trillion of this has been incurred by China, whose estimated debt stands at 260 percent of its GDP. To make matters even more alarming, there’s over $1.9 trillion of emerging market bonds and syndicated loans maturing through to the end of 2017. This is creating the conditions for a new financial convulsion that will be worse than 2008-09.

The finance oligarchy is pleased with the G20, however, as their monopoly banks posted even higher profits in the past three years than before. Indeed, the four biggest US banks were 30 percent larger by 2013 than they had been before the crisis, making them even more “too-big-to-fail” than ever before.

On the other hand, the ranks of the unemployed is expected to exceed 200 million this year according to conservative estimates of the ILO. Of those with jobs, more than 1.4 billion are now in precarious kinds of work, growing by 11 million per year as governments impose labor flexibilization policies to enhance the competitiveness of monopoly firms.

Even middle class families in the advanced capitalist countries are joining the ranks of over 1.6 billion people all over the world who are denied health, education services, and an adequate standard of living. This is made worse by cutbacks in social spending while military expenditure is jacked up for the military-industrial complex, and taxes are reduced for the finance oligarchy.

As in past summits, these harsh realities will be denied or ignored by the G20 leaders in their official statements. More than this, they are intent on using fascist repression against the people who are gathering in the tens of thousands in Hamburg to expose these truths and oppose the anti-people policies of the G20.

This summit is also notable because it is happening amidst rising tensions between the leading imperialist members of the G20. Every major summit so far this year has exposed the widening rift between the US and its traditional allies across the Atlantic. After the G7 Summit last May, German Chancellor Merkel was quoted as saying that, “The times when we could fully rely on others are to some extent over. We Europeans must really take our destiny into our own hands.”

This is in response to the US government’s increasing unilateralism and belligerent attitude vis-à-vis its so-called allies under Trump. At the G7 Summit, Trump refused to commit to a common climate policy because it would constrain the expansion of US monopoly firms. At the NATO Summit also held last May, Trump refused to reaffirm a commitment to Article 5 of the NATO treaty, which obligates member states to come to each other’s assistance when attacked.

Instead he badgered other NATO members to increase their share of the cost of securing global capitalism. Before these, Trump also shelved the Trans-Pacific Partnership (TPP) and pledged to renegotiate existing treaties to protect “American” (i.e. US monopoly capitalist) interests.

This is prompting Germany and other European powers to cosy up more with China. They are especially keen on riding the One Belt, One Road initiative of China which plans to build six economic corridors spanning the Eurasian continent by land and by sea.

Hence the G20 will be another venue where increasing inter-imperialist conflicts and realignments will be played out. Underlying this is the intensifying general crisis of monopoly capitalism and the increasing desperation of US imperialism to retain its primacy and the US-led world order it has secured since the end of the Second Word War.

Democratic and anti-imperialist forces in the world must expose the real roots of the crisis of the global capitalist system and the role of the finance oligarchy and the institutions that serve their interests including the G20. It is only through mass struggles that we the people can effectively resist imperialism and liberate ourselves from all reaction.###