Addressing the G7 working group entitled “Working Together to Confront Multiple Crises,” on May 20, Brazilian President Luiz Inácio Lula da Silva confronted the attendees with some uncomfortable truths about the current global systemic crisis and changes required to address it.
He was seated between President Joe Biden and Canadian Prime Minister Justin Trudeau who listened to him slam the International Monetary Fund for ignoring the consequences for developing nations of the IMF’s brutal austerity policies, and his demand that the global financial system “must be at the service of production, labor and employment. We will only have true sustainable development by directing our efforts and resources to the real economy.”
That should have happened after the 2009 crisis, but never materialized, he observed. He pointedly warned that the poverty, unemployment, hunger, environmental degradation and the pandemics of the current era can only be addressed by a state that encourages “public policies directed toward guaranteeing fundamental rights and the collective wellbeing” of the population.
A few hours after his speech, Lula met privately with IMF Managing Director Kristalina Georgieva, to whom he reportedly repeated some of his same remarks about IMF policy and told her that the IMF “is destroying Argentina” and other developing nations. The Argentine state news agency Telam reported May 20 that it received a communiqué from Planalto, the Office of the Brazilian Presidency, explaining that Lula “also addressed Argentina’s economic situation with the IMF’s Managing Director, as it is a necessary element in South America’s regional balance.”
Lula recalled that the last time he attended a G7 meeting was in 2009, during the “catastrophic” global financial crisis which led to the creation of the G20 “and exposed the fragility of the dogmas and mistakes of neoliberalism.” Unfortunately, he added, the impetus for reform at that time “wasn’t enough to correct the excesses of the deregulation of the markets or the apologists for a minimalist state. The global financial architecture changed very little and the bases of a new economic governance were not launched.”
The world today faces “multiple overlapping crises,” Lula warned—Covid pandemic, climate change, geopolitical tensions, “a war in the heart of Europe,” pressures on food and energy security, and threats to democracy.” This was his only reference to the Ukraine war in that speech.
Lula continued that meeting these challenges “will require a change of mentality. It’s necessary to overturn myths and abandon collapsed paradigms.” Moreover, “foreign indebtedness of many countries, of which Brazil was a victim in the past and today threatens Argentina, is the cause of the glaring and growing inequality, and demands that the International Monetary Fund consider the social consequences of its austerity policies.”
Lula also addressed the “false dichotomy between growth and protection of the environment,” which he said, should have already been overcome. “Combatting hunger, poverty and inequality must be placed at the center of the international agenda, ensuring adequate financing and technology transfer.” No solution will be found in “the creation of antagonistic blocs or in answers that consider only a small number of countries. … The transition to a multipolar world demands profound changes in the institutions. … It makes no sense to insist that emerging countries contribute to resolving the `multiple crises’ the world confronts without addressing their legitimate concerns, or without their being adequately represented in the primary bodies of global governance.”
The Brazilian President emphasized the importance of the G20, but said it could become more effective with a composition that responds “to the demands and interests of all the regions of the world.” That therefore “implies a more adequate representation of African nations.” He also again demanded reform of the UN Security Council with the inclusion of new permanent members. Otherwise, he said, it will never “recover the effectiveness, or political and moral authority to deal with the conflicts and dilemmas of the 21st century. A world that is more democratic in the making of decisions that affect everyone is the best guarantee of peace, of sustainable development and the rights of the most vulnerable and the protection of the planet.
“Before it’s too late,” he concluded his remarks. (https://www.gov.br/planalto/pt-br/acompanhe-o-planalto/noticias/2023/05/discurso-do-presidente-lula-em-sessao-de-trabalho-do-g7)
