Friday, November 28, 2008

Crumbs in a time of crisis

Many are worried that with the economic crisis spending priorities across the world will be pulled away from much needed action. Climate change is the obvious example, but the international development "community" has similar concerns. Many of the richest countries in the world have struggled to live up to their commitments and the concern is that the world's poorest will be pushed off the agenda.

Speaking to the FT Salil Shetty, director of the UN Millennium Campaign, said "developing nations are estimated to be facing losses of at least $300bn to their economies up to 2010 as a result of the economic slowdown and are particularly vulnerable to global shocks... It’s a very ironic situation where people who cannot afford to have bank accounts are now facing the consequences of something they didn’t have anything to do with."

Without any economic cushion to protect them those who live at the very bottom of the economic pyramid are particularly susceptible to problems in the economic situation. The golden rule that says the poor will always pay the highest price for any recession goes double in the international context.

Shetty estimated that rich nations needed to contribute an additional $140 billion in aid annually up to 2010 to meet their existing commitments, “small change” compared to the hundreds of billions of dollars being spent on the bailout of western financial systems. Interestingly our own International Development Minister Douglas Alexander seems to be making some similar noises in this direction.

Alexander pointed to the global benefits of tackling absolute poverty in the developing world;

"Tackling this poverty will make a better world for all of us. Ignoring it risks storing up problems for the world's future – in the same way that sub-prime mortgages in the US stored up problems for the world's economies.

"In Doha this weekend representatives of donor nations and developing countries will come together to focus minds on the need to meet earlier spending commitments. The poorest people in the world want and deserve a commitment that goes beyond warm words. They rightly complain that all too often words are not matched by action. All nations represented in Doha should sign a statement of global solidarity – wealthy countries promising to provide the aid they have promised".
We'll have to see whether that happens or not - although far too often aid comes with conditions attached, conditions that suit the needs of international corporations seeking cheap labour or resources in the nations concerned but that do little to allow those nations to develop a sustainable and independent economic policy.
This post was partly a Follow up on something I wrote earlier

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