THE just-concluded G-20 summit of the world’s developed and emerging economies in London has sent out a big spurt of hope to those countries participating in it. The leaders ended up promising more than one trillion dollars to the International Monetary Fund and other bodies as a way of shoring up the global economy and reversing the crisis that has already led to thousands of jobs being lost. The summit has also come down heavily on tax havens and excessive corporate pay. It has also stressed sales of IMF gold reserves to help poor nations.
That last point brings us to the question of what likely outcome the G-20 will have on the economies of the world’s poorer nations. In practical terms, the absence of representation of the world’s Least Developed Countries at the London meeting has been rather disappointing. That ought not to have been the case, given that when developed nations face an economic crunch, the ramifications happen to be grave for those down the economic scale. One example of that comes through exports from poor nations taking a beating as a result of the financial crisis in the West. Overall, what has actually happened at the London summit has been an attempt at a bailout of its battered economies. That leaves the LDCs in a clearly difficult situation. With a billion or so people around the world surviving on less than two dollars a day, to say nothing of those who have nothing to fall back on, conditions in the poor countries call for serious handling. As matters stand following the G-20 summit, these LDCs will now have to depend on such middle income countries as India, China and Brazil to find a way out of their own troubles.
The London summit was without question a brave attempt at overcoming the problems which today plague the world. But the exercise could have been a whole lot more substantive had it taken the LDCs’ problems into account. With the root causes of the recession being in developed countries, it is the LDCs that are at the receiving end of it. However, since further rounds of talks on the crisis are expected in the times ahead, we believe that serious consideration should be given to the plight of the LDCs by making it possible for them to raise their problems before the global community. As the Nobel laureate Muhammad Yunus said not so long ago, any bailout plan ought to have the poor in mind. Ignoring them is fraught with risks.
Source: Editorial, The Daily Star, 05 April 2009