Brussels, 03/09/2009 (Agence Europe) - At first sight, the G20's response for tempering the impact of the economic crisis on developing countries has been swift, coordinated and promising. However, the commitment announced in favour of new resources, especially from the International Monetary Fund (IMF), is hardly to the advantage of poor countries and is also misleading.
This was explained by Ngaire Woods, who is professor at the University of Oxford, during a hearing before the EP development committee on Thursday 3 September. Beyond first impressions, mobilisation of additional resources in favour of the international financial institutions has for now served almost exclusively in the interest of developed economies. “The IMF has reached record lending levels and has reduced conditions”, Ms Woods said, adding that only “1.6% of the new loans are for the countries of sub-Saharan Africa”. This, she says, confirms what had been announced by the World Bank at the time, showing that the use of new resources is more to the advantage of the economically advanced countries. For the World Bank also, generous promises in favour of new funds have been made but results have been disappointing. World Bank President Robert Zoeillick had called on the G20 countries to invest in a new “vulnerability fund” but no contribution from them was forthcoming so that, in order to face up to the economic crisis, the Bank is only using resources that already exist, and its loans are also unable to help low-income countries. Looking ahead to payment of funds initially allocated for coming years (“frontloading”), one runs the risk of compromising projects that had been foreseen in the longer term. What it boils down to, Ms Woods said in her analysis, is that “the G20 has acted rapidly, in a fair spirit of cooperation, but in order to face up to the immediate effect of the crisis particularly in Europe and the United States”. In order to be effective and to give concrete assistance to developing countries, she calls on the EU to reflect on three things: resources, flexibility and rapid response to the crisis. The crisis, moreover, largely compromises the Millennium Development Goals and should prompt accelerated reform of the Bretton Woods institutions.
One has to be “realistic” as there are enormous constraints in all countries, said Guy Mitchell (EPP-ED, Ireland), who finds the figure of 1.6% (see above) truly shocking. Like him, Charles Goerens (ALDE, Luxembourg) regretted the fact that Third World countries are not represented at the Pittsburgh summit - “an absurd situation” that means that “no ACP country is able to speak out either in the international institutional system or at the G20”. Also calling for reform of the international financial institutions, the new chairman of the parliamentary committee, Eva Joly (Greens-EFA, France), stresses: “We have historic responsibility on our hands (…) we cannot be passive spectators”. “The crisis could have been worse”, put in Donald Kaberuka, who is the president of the African Development Bank group. “In Africa, there is 6 or 7% growth, which is nonetheless because we have managed to put reforms in place”, said Kaberuka, who has been at the head of the regional bank since 2005. He went on to add: “But no reform will save Africa from climate change”. (A.B./transl.jl)