Tuesday, May 14, 2024
News and Views from the Global South
DEVELOPMENT: Not Another Missed Opportunity, Civil Society Urges
Ayesha Gooneratne
- A coalition of civil society organisations called the Global Social Economy Group (GSEG) is pressing for the immediate and long-term financing needs of developing countries to take centre-stage at the U.N. Conference on the World Financial and Economic Crisis.
In a statement, GSEG said that "industrialized country governments are fudging the hard issues at the U.N. and instead utilizing forums such as the G8 and the G20 to make decisions affecting millions of people, rendering those worst affected by the crisis voiceless."
"Rich, industrialized countries are attempting to underplay the legitimate role of the United Nations in the ongoing process of global economic system reform," it said.
The GSEG, representing social movements, trade unions and NGO's, outlined its recommendations for solving the economic crisis, while also demanding that heads of state and their representatives put the United Nations at the centre of reform policies.
Roberto Bissio, from Social Watch, noted, "developing countries, in particular, which had nothing to with creating the crisis, are suffering the consequences the most."
He mentioned that the crisis is reaching them through a variety of mechanisms, including falling commodity prices, reduced investment, more expensive credit, and falling remittances.
He suggested that investing in the poor, whether directly or through institutions that provide services to the poor, actually stimulates the economy. Out of necessity, the poor do not and cannot save, and in turn, contribute to the global economy.
"We are seeing in different countries that investing in the poor actually works. The problem is that the governments in developing countries do not have the deep pockets that would allow them to do that." Therefore, they must be supported in ways that do not aggravate their existing debt problem.
Pauline Vande-Pallen, from Women’s Working Group/Network for Women’s Rights in Ghana, emphasised that governments are not going far enough to introduce structural changes and address failed policies and governance systems.
She also said, for the most part, women are voiceless, and they need to be actively engaged in whatever recovery programmes are put in place.
A statement released by the Women’s Working Group states, "We urge governments not to make this conference a missed opportunity to build a global consensus around a multilateral economic governance system that is fair, inclusive, gender equitable, rights-based and pro-development."
Kristian Weise, from Global Unions/LO-Denmark, observed that people are being hit hard in labour markets all around the world, especially women and young people.
He said that young people in particular "have no prospects in the job market, and we are in danger of losing a generation."
Weise explained that the job crisis would last longer than the economic crisis. Despite projections that the economy might be turning around, he said that there might actually be negative development within the labour markets for the next six years.
He noted that rescue packages should have been designed to better support employment and the job market. He also called for a new growth model, stating, "If you concentrate growth among profits and people with very high incomes, then growth actually has a tendency to slope."
"This crisis is no excuse for pursuing bad policies (and we are seeing a lot of governments trying to do that), and this crisis is definitely no excuse for backing down from promises made in better times," Weise said.
Bhumika Muchhala, from Third World Network, pointed to several recommendations to help developing countries cope with the crisis. She said there should be extra external financing to make up for the projected one to two trillion-dollar shortfall in developing countries, resulting from global demand contraction, fall off of exports, decline in demand for migrant workers, decline in remittances, a fall in tourism, and a fall in foreign direct investment and aid.
She suggested that a key proposal to make up for this external shortfall is the issuance of Special Drawing Rights (SDR). The G20 decision on allocation of 250 billion dollars of SDR will go mainly to developed countries, since allocation is by quota. Muchhala said that the allocation should be given based on need, not quotas.
She also said we’re also looking at a serious threat of low-income countries falling into a new debt crisis. The World Bank estimated that nearly 40 developing countries are highly vulnerable to difficulties in paying back their foreign debt because the foreign exchange reserves are falling so low.
Therefore, there should be a temporary moratorium on debt payments for low-income countries, as well as an international debt court that can allow for countries to declare a debt standstill, similar to Chapter 11 of the U.S. bankruptcy code.
Other measures include the creation of a new forum for global economic governance, such as a global economic council under the U.N. that would coordinate policies undertaken by various international agencies and allow developing countries to participate in discussions and decisions, as well as reform of the World Bank and IMF.
Muchhala said, "I would like to emphasise the absolute unaccountability of the G20… It’s self-selected, and it does not represent the vast majority of humanity, let alone the key factions of the countries that are most impacted by the crisis."
She explained that the creation of a global economic council would balance out and mediate differing and competing priorities.
Muchhala told IPS that she hopes the conference carries on, is taken seriously and has some sticking power. Referring to the U.N., she noted, "In essence, it’s the only forum where all countries have a voice."
"We would like to emphasise that the U.N. has a potentially huge role to play, if the world, and in particular, the rich countries give it its due attention."
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