On the eve of the upcoming G20 summit in Pittsburgh USA, a new ActionAid briefing finds that many developing countries are far from seeing the bottom of the economic downturn.

In the face of overwhelming need, only half of the $50 billion promised to help the world's poorest countries at the London G20 in April has been delivered. Instead the G20 has concentrated on bailing out richer countries to the tune of $1.1trillion.

The briefing finds that no money at all has been found for the World Bank Vulnerability Framework, the only fund that was actually earmarked for poor people.

Additionally the IMF, which was appointed keeper of the G20's piggy bank, has continued to demand strict conditions from countries needing loans. These include zero growth in public spending in Ethiopia and ten per cent budget cuts in Latvia.

The G20's reliance on the IMF is also threatening the build-up of another debt crisis as money is being lent – rather than being given as aid – at a time when developing countries have fewer funds to repay their debt.

ActionAid charges that any talk of a return to growth will ring hollow in many developing countries where unemployment continues to rise.  For many of those out of work there is no prospect of a return.

Families are selling property to survive and are starting to take children out of school as poverty becomes deeper and more entrenched.

Dr Claire Melamed, ActionAid UK head of policy said: "G20 economies are stuttering back to life, but for millions of people in the developing world, talk of recovery and of green shoots is no more than a grim joke.

"When G20 leaders meet in Pittsburgh, they must remember the people who work the fields and factories of Africa and Asia and not just those who wheel and deal in Wall Street and the City of London."

Combating tax havens

ActionAid has found one ray of light – some progress on combating tax havens. Since April, there has been movement on tax authorities exchanging information to tackle corporate tax avoidance and evasion.

The briefing argues that in the context of stagnating aid budgets, increasing the tax take – including tackling tax avoidance and evasion – is a crucial means to filling gaps in developing countries budgets.

A generally accepted minimum tax level is 15% of national income. But many poor countries, including Bangladesh, Ethiopia and Nepal collect less than 10%.

In a key statistic, ActionAid points out that if all countries had raised 15% in tax in 2007, an extra $198 billion (£99 billion) would have been available for poor countries to combat poverty.

That money could put an end to world hunger six times over, put all children in school twelve times over or stop Aids in the developing world seven times.

Dr. Claire Melamed continued: "The G20 must seal the deal on tax. This would be a big step forward in getting poor countries and their people the money they need, especially against the backdrop of tightening budgets in all donor countries. But unless the G20 actually finish what they’ve started, poor countries won’t get a penny."

ActionAid says that to make good on the London G20 promises the Pittsburgh summit must increase contributions to help poor people cope and ensure that the World Bank and IMF give developing countries more say over the terms on which the money they need is lent.

Leaders must also agree a robust global deal on tax that really helps developing countries.

Read the briefing now