Secretary-General Ban Ki-moon today welcomed the $1.1 trillion package committed by leaders of the Group of 20 (G-20) nations in London, stressing that developing nations must receive the funds needed to stem the onset of a human development crisis.
The G-20 nations today also “reaffirmed previous commitments to increase aid and help countries achieve the Millennium Development Goals,” Mr. Ban said in a statement, referring to the ambitious anti-poverty targets with a 2015 deadline.
This means that these nations are promising at least $300 billion in aid over the next two years, he said. “For the poorest countries this will be crucial. The world will be watching.”
According to new World Bank data, developing countries’ economic growth will slow sharply to 2.1 per cent this year, marking a 3 per cent drop from 2008. As a result, some 53 million more people would fall into poverty this year, living on less than $1.25 a day, due to the crisis.
Additionally, the world economy will contract by 1.7 per cent compared to last year’s 1.9 per cent growth, making the first global decline since the Second World War.
The G-20 leaders committed considerable new resources for the International Monetary Fund (IMF) and the World Bank, and asked the UN to monitor the impacts of the current and future crises on the world’s most vulnerable, the Secretary-General added.
“I welcome the commitment from G-20 leaders to resist protectionism and to monitor compliance,” he said, noting that he was also encouraged by their recognition of the strong links between tackling the economic turmoil, food security and climate change.
Among other things, the leaders also committed to combating climate change, vowing to reach agreement at the UN climate change conference this December in Copenhagen, where nations are expected to conclude an ambitious successor pact to the Kyoto Protocol, whose first commitment period ends in 2012.
In an opinion piece published in The Guardian today, the Secretary-General made the case for $1 trillion to “stop the slide” and help the world’s poorest, who spend as much as 80 per cent of their income on food and have no safety net.
“One trillion dollars over two years is not so large a sum, considering the consequences,” he said. “Some might call it a moral imperative. But if our goal is to reverse a global slump, it is also sound economics.”
The financial crisis has spiralled into an economic crisis, he wrote. “I fear worse to come: a full-blown political crisis defined by growing social unrest, weakened governments and angry publics who have lost all faith in their leaders and their own future.”
Mr. Ban appealed to nations to recognize their global interdependence, with no single nation being able to safeguard its economic security without taking into account the well-being of other countries. “There is a thin line between failing banks and failing countries, and we cross it at our peril.”
Boosting liquidity through the IMF is key to reverse the credit crunch impacting developing nations which has retarded trade and growth, Mr. Ban underscored.
“Meanwhile, we must resist short-sighted pressures that would compromise, if not destroy, the progress we make in London – and say no to the new protectionism,” the Secretary-General wrote, calling on nations who have placed restrictions on trade to reverse the trend.
While in London, the Secretary-General held bilateral meetings today with Italian Prime Minister Silvio Berlusconi and Japanese Prime Minister Taro Aso. Tomorrow he heads to Paris, where he will chair a meeting of the UN system’s Chief Executives Board for Coordination (CEB).