Outcomes of the G20 meeting

29 September 2009

The financial crisis has had a devastating effect on the developing world with up to 50,000 additional infant deaths in 2009 and about 90 million more people living on less than $1.25 a day by the end of 2010.

G20 leaders made important commitments at the Pittsburgh Summit to assist low-income countries through the crisis and to meet their long-term development needs.

The G20 agreed to take steps to address food insecurity, lack of financial access, energy poverty in developing countries as well as to take steps to clamp down on illicit capital flows out of the developing world. The G20 also endorsed recommendations from the Prime Minister’s Chair’s Review of the International Financial Institutions, including a crisis response facility to assist low-income countries during future crises.

Energy Poverty

Improving access to electricity is a key factor in improving economic growth and achieving the Millennium Development Goals. As many as 1.6 billion people, largely in rural areas, have no access to electricity. The G20 committed to reduce energy poverty through contributing to programmes to provide renewable energy to low-income countries. This includes the Scaling Up Renewable Energy Programme (SREP) which will help deliver urgently needed energy supplies to the poorest countries and at the same time help meet our climate change goals.   The SREP is delivering renewable energy projects in low-income countries and is expected to provide enough energy to support over 2.5 million households by 2015. The UK is a major SREP donor, contributing £50mn. With our commitment to the SREP we are looking to help put some of the world's poorest countries at the cutting edge of reliable, efficient and sustainable energy production.

Financial Access

The G20 committed to improving access to financial services for the poor by launching a Financial Inclusion Experts Group and the SME Finance Challenge. The G20 Experts Group will promote the spread of innovative financial services such as branchless banking. The SME Finance Challenge will call on the private sector to make proposals for how public finance can maximise private finance on a sustainable and scalable basis.

Access to financial services is crucial to the financial independence and security of families and it is estimated e that 2 billion people do not have access to these facilities. The benefits of branchless banking are already being seen in Kenya where a mobile phone transfer service now has 6 million subscribers in a country where less than 5 per cent of the rural population would otherwise have access. It is vital that developing countries have the right frameworks and systems in place to enable modern banking systems to help families out of poverty by giving them better control over their money.

International Financial Institution reform

The G20 also backed World Bank reforms which will safe-guard the world’s poor countries against future economic meltdowns. The crisis response facility would supply rapid funding for the world’s poorest people during economic crises to ensure basic services such as schools and health services can continue functioning. The facility will be a new source of finance at the World Bank that will be reserved for times of crisis and can be rapidly allocated to Low Income Countries in need.

Other key commitments

• Food Security/Agriculture: Developing countries' efforts to improve food security are being coupled with increased resources from developed country partners, including the UK. The UK has committed £1.1 bn on food security and agriculture over the next 3 years. Furthermore, the G20 called on the World Bank to develop a trust fund to support the new Food Security Initiative introduced a the G8 Summit in L'Aquila in July.
• Official Development Assistance: G20 leaders reaffirmed their commitment to meet the MDGs and to deliver their respective ODA commitments to 2010 and beyond. G20 also agreed to work towards increased transparency of international aid flows by 2010.
• Illicit Capital Flows: G20 committed to help prevent illicit capital outflows from developing countries including agreement to work with the World Bank’s Stolen Asset Recovery programme and the Financial Action Task Force.
• Concessional Funds: G20 agreed on the need for accelerated and additional concessional financial support to Low Income Countries and for support to the MDBs to avoid a disruption of concessional finance for the most vulnerable countries, especially ensuring that IDA and the African Development Fund are appropriately funded.

Read the full leaders' statement from the Pittsburgh Summit