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Poor nations plead for cash at crisis meeting

DEVELOPING countries had a clear message on Wednesday for a UN meeting on the global financial crisis — we need money.

Planning for the three-day conference has been fraught with difficulties. It was first scheduled for June 1-3 but UN General Assembly President Miguel D’Escoto postponed it to this week when it became clear negotiators had no agreement on a set of draft proposals for reforming the global financial system.
Although the meeting has been billed as a summit, no Western leaders are attending. Only a dozen presidents and prime ministers, mostly Latin American and Caribbean, showed up. Others taking part have sent lower-level delegates.
On the first day, speakers from developing countries made clear that they saw their nations as victims of a financial crisis they did not cause and pleaded with the world’s wealthy nations to help them.
“We don’t have the surpluses and we don’t have the foreign exchange reserves that fiscal expansion in our import-dependent economies would require,” Dean Barrow, prime minister and finance minister of Belize, told the 142 participants.
“If further devastation in our developing countries is to be averted, specific arrangements for the flow of resources to governments … need to be put in place immediately.”
Zimbabwe’s Vice President Joice Mujuru pleaded for a “financial stimulus package” for her country’s devastated economy, saying lack of foreign support imperilled a recovery plan drawn up by the unity government.
UN Secretary-General Ban Ki-moon backed the plea by poor countries for more financial aid. He said the world faced “the worst ever global financial and economic crisis since the founding of the United Nations more than 60 years ago.”
He also chided the world’s wealthy nations for reneging on pledges to boost aid to Africa.
“Surely if the world can mobilise more than $18 trillion to keep the financial sector afloat, it can find more than $18 billion to keep commitments to Africa,” Ban said.
World Bank Managing Director Ngozi Okonjo-Iweala spoke of “a development crisis of immense proportions.
A set of draft proposals, which delegates plan to adopt by today, calls for increased aid and debt relief for poor nations, boosting representation of developing states at the International Monetary Fund and more supervision of hedge funds. It also warns against national trade protectionism.
The US. ambassador to the United Nations, Susan Rice, said Washington supports increased emergency IMF aid to the neediest countries as well as more US aid. She said the United States had “a share of responsibility” for the current crisis.
She ignored suggestions for changing global financial institutions.
Chinese Foreign Minister Yang Jiechi joined a number of other speakers in calling for an end to the “inadequate representation” of developing countries at the IMF, World Bank and other international financial institutions.
Cuban Trade Minister Rodrigo Malmierca Diaz said the IMF and World Bank had “impoverished” nations around the world and should be abolished. He called for an “international UN conference to refound” the entire global financial system.
Britain’s Africa Minister Mark Malloch Brown backed the call for more aid but said he saw little need for a permanent UN “follow-up mechanism” after this week’s meeting — something poor countries outside the G20 club of big developed and developing nations have called for.
Western diplomats said the low turnout of world leaders at the UN conference reflected widespread dissatisfaction with the way D’Escoto, a leftist former foreign minister of Nicaragua and Roman Catholic priest, organised it.
The run-up to the conference highlighted sharp differences between radicals who want to give the 192-nation General Assembly much more say in tackling the financial crisis and major powers intent on keeping control in their own hands.
Top speakers include Bolivian President Evo Morales and Ecuador’s President Rafael Correa, both leftists. Venezuela’s firebrand President Hugo Chavez had been expected but may join the long list of absent world leaders UN officials said.
Meanwhile economic growth in sub-Saharan Africa should slow to 1% in 2009 from an estimated 4,8 % last year, with regional powerhouse South Africa seen contracting by 1,5 %, the World Bank said on Monday.
The bank said in its latest Global Development Finance report output and incomes in the region have been negatively affected by falling commodity prices and volume demand for metal and mineral exports as the global economic downturn weighs.
The World Bank warned that prospects for the global economy remained “unusually uncertain” despite recent signs of improvement in parts of the world and cut its 2009 growth forecasts for most economies.
South Africa fell into its first recession in 17 years in the first quarter of this year, as sliding domestic and world demand hit the key manufacturing and mining sectors.
In its February budget statement, the government forecast GDP growth of 1,2% this year, but the Treasury says this will likely be revised downwards in the October budget statement.
“Much of the decline in growth for 2009 reflects the sharp deceleration in investment and consumption activity that has already occurred,” the World Bank report said, adding that growth should strengthen in sub-Saharan countries during the second half of 2009.
The recovery is expected to be relatively slow, partly because of a muted recovery in global export demand.
“While output growth will pick up in 2010 and 2011, the slow pace of the recovery will mean that spare capacity, heightened unemployment and weak government revenues will continue to characterise the economic situation,” it said.
Growth in sub-Saharan Africa should pick up to about 3,7% in 2010 and 5,2% in 2011, as both domestic and external demand begin to recover. Output in South Africa should increase by 2,6% in 2010 and by 4,1% the year after. But the risks for the sub-Saharan Africa region were “heavily tilted to the downside” the report warned, with a deeper and prolonged global recession seen slowing recovery in external demand and preventing an improvement in commodity prices.
“Such a scenario … would imply additional widening of the output gap in the region … and a continuation of recession-like conditions beyond the projection period,” it said. — Reuters.

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