Ocean
The Living Force
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=257777&version=1&template_id=36&parent_id=16
Financial crisis could trigger social unrest, warns UN chief
THE global financial crisis has brought an abrupt end to a long era of economic growth, and if not handled properly it could result in social unrest and political instability, according to the United Nations.
Seeking additional emergency financing from the International Monetary Fund (IMF) and the central banks of the advanced countries, the UN Secretary General Ban Ki-moon suggested a six-point agenda to set the world economy in order.
“If not handled, today’s financial crisis will become tomorrow’s human crisis. Social unrest and political instability will grow, exacerbating all other problems,” he said, declaring open the Follow-up International Conference on Financing for Development
The ultimate danger would be a cascading series of crises, each building on the other, with potentially “devastating” consequences for all, he said.
He welcomed the fiscal and monetary rescue packages and stimulus plans launched by major economies, but said that probably more needed to be done since the vast sums committed to bail-out “dwarfed” overseas development assistance, which remains a crucial pillar of development finance for many countries.
Elaborating on the six-point agenda, he said there was a need to address the liquidity needs, especially for the developing countries.
He said that the wealthiest nations had moved to keep credits flowing at home, and added that credit flows must be ensured to developing countries as well.
Their (wealthy nations’) currencies were not reserve currencies; their foreign reserves, often large, were not sufficient to withstand the threat coming from today’s crisis, Ban Ki-moon said.
“We, therefore, need additional emergency financing from the IMF and the central banks of the advanced countries. Without it, the credit crisis will spread to emerging economies,” he said.
In this process, growth would stall, hurting them and the world as a whole, he said.
Suggesting that an increase in grants and long-term lending from the development banks should be a part of the globally co-ordinated approach, he said reducing aid to the poorest nations under current circumstances would have devastating consequences.
On debt relief, Ban Ki-moon said efforts should be stepped up so that a greater number of poorest nations could benefit. “This burden will only weigh more heavily in the current climate, impeding investment and government spending that might otherwise go into growth and economic development,” he added.
He added that national governments need to develop new ways to raise revenues, while encouraging domestic firms to make productive investments.
“Specifically, we need more international co-operation to minimise harmful tax competition and stem the loss of tax revenues, particularly in resource-rich nations,” he said.
Asserting that “aid for trade” was the only sustainable path of the future, Ban Ki-moon said: “We need to see Doha trade round revived and concluded successfully.
“Beggar-thy-neighbours trade policies” benefited none, he said, adding this year’s food crisis worsened with some nations placing restrictions on exports.
World Trade Organsiation director general Pascal Lamy said the conclusion of Doha Development Round was delivering on the UN’s Millennium Development Goals.
While trade could be an enabler, a new realisation has emerged during the last decade, he said, adding for trade to fully contribute to sustainable development, growth and job creation, it has to be accompanied by financial resources to address infrastructure and supply side constraints.
This year, he said, the world has seen progress in implementation of trade capacity building projects with major development partners such as the World Bank, the Islamic Development Bank and others having set up “aid-for-trade” programmes.
“If aid-for-trade is important, the big price lies in the success of the Doha Development Round,” Lamy said, adding that it would address the distortions in agriculture trade caused by unfair farm subsidies, an issue of vital importance for many developing countries.
Stressing that a major difference between the unfolding economic crisis and past ones is that the world today is more globalised, he said there is a growing consensus that only multilateral solutions could address these challenges.
“In the current economic conditions, there may be a tendency to embrace inward looking policies that put domestic interests ahead of international co-operation,” he cautioned.
In tough times, it was too easy for politicians to blame the foreigner for the nation’s ills, shutting foreign products out of the market and slashing foreign aid budgets.
The president of the UN general assembly Father Miguel D’escoto Brockmann said the hyper-consumerism and exploitation by the wealthy nations have led to a “systemic war” against the poor, which was “the most pervasive form of terrorism in today’s world.”
“We have got to put an end to this by moving from profit-centered development to people-centered development before it is too late,” he said.
With the trillions that are currently being spent on wars on terror, this whole process could be reversed but it required a change of logic. He said the long-standing commitment to provide 0.7% of gross domestic product by wealthy nations as development assistance for the developing world remained unrealised.
“There is no doubt that the international community has been dragging its feet with regard to the compliance with the commitments assumed at Monterrey”, which viewed trade was to the main force that would eradicate poverty, he said.
Brockmann said developing countries need support to strengthen their domestic resource mobilisation. “These will help attract healthy, non-speculative foreign direct investment, which when it complies with national laws and priorities and is embedded with social responsibility, constitutes an important complement to public investment and official financial aid,” he added.
Financial crisis could trigger social unrest, warns UN chief
THE global financial crisis has brought an abrupt end to a long era of economic growth, and if not handled properly it could result in social unrest and political instability, according to the United Nations.
Seeking additional emergency financing from the International Monetary Fund (IMF) and the central banks of the advanced countries, the UN Secretary General Ban Ki-moon suggested a six-point agenda to set the world economy in order.
“If not handled, today’s financial crisis will become tomorrow’s human crisis. Social unrest and political instability will grow, exacerbating all other problems,” he said, declaring open the Follow-up International Conference on Financing for Development
The ultimate danger would be a cascading series of crises, each building on the other, with potentially “devastating” consequences for all, he said.
He welcomed the fiscal and monetary rescue packages and stimulus plans launched by major economies, but said that probably more needed to be done since the vast sums committed to bail-out “dwarfed” overseas development assistance, which remains a crucial pillar of development finance for many countries.
Elaborating on the six-point agenda, he said there was a need to address the liquidity needs, especially for the developing countries.
He said that the wealthiest nations had moved to keep credits flowing at home, and added that credit flows must be ensured to developing countries as well.
Their (wealthy nations’) currencies were not reserve currencies; their foreign reserves, often large, were not sufficient to withstand the threat coming from today’s crisis, Ban Ki-moon said.
“We, therefore, need additional emergency financing from the IMF and the central banks of the advanced countries. Without it, the credit crisis will spread to emerging economies,” he said.
In this process, growth would stall, hurting them and the world as a whole, he said.
Suggesting that an increase in grants and long-term lending from the development banks should be a part of the globally co-ordinated approach, he said reducing aid to the poorest nations under current circumstances would have devastating consequences.
On debt relief, Ban Ki-moon said efforts should be stepped up so that a greater number of poorest nations could benefit. “This burden will only weigh more heavily in the current climate, impeding investment and government spending that might otherwise go into growth and economic development,” he added.
He added that national governments need to develop new ways to raise revenues, while encouraging domestic firms to make productive investments.
“Specifically, we need more international co-operation to minimise harmful tax competition and stem the loss of tax revenues, particularly in resource-rich nations,” he said.
Asserting that “aid for trade” was the only sustainable path of the future, Ban Ki-moon said: “We need to see Doha trade round revived and concluded successfully.
“Beggar-thy-neighbours trade policies” benefited none, he said, adding this year’s food crisis worsened with some nations placing restrictions on exports.
World Trade Organsiation director general Pascal Lamy said the conclusion of Doha Development Round was delivering on the UN’s Millennium Development Goals.
While trade could be an enabler, a new realisation has emerged during the last decade, he said, adding for trade to fully contribute to sustainable development, growth and job creation, it has to be accompanied by financial resources to address infrastructure and supply side constraints.
This year, he said, the world has seen progress in implementation of trade capacity building projects with major development partners such as the World Bank, the Islamic Development Bank and others having set up “aid-for-trade” programmes.
“If aid-for-trade is important, the big price lies in the success of the Doha Development Round,” Lamy said, adding that it would address the distortions in agriculture trade caused by unfair farm subsidies, an issue of vital importance for many developing countries.
Stressing that a major difference between the unfolding economic crisis and past ones is that the world today is more globalised, he said there is a growing consensus that only multilateral solutions could address these challenges.
“In the current economic conditions, there may be a tendency to embrace inward looking policies that put domestic interests ahead of international co-operation,” he cautioned.
In tough times, it was too easy for politicians to blame the foreigner for the nation’s ills, shutting foreign products out of the market and slashing foreign aid budgets.
The president of the UN general assembly Father Miguel D’escoto Brockmann said the hyper-consumerism and exploitation by the wealthy nations have led to a “systemic war” against the poor, which was “the most pervasive form of terrorism in today’s world.”
“We have got to put an end to this by moving from profit-centered development to people-centered development before it is too late,” he said.
With the trillions that are currently being spent on wars on terror, this whole process could be reversed but it required a change of logic. He said the long-standing commitment to provide 0.7% of gross domestic product by wealthy nations as development assistance for the developing world remained unrealised.
“There is no doubt that the international community has been dragging its feet with regard to the compliance with the commitments assumed at Monterrey”, which viewed trade was to the main force that would eradicate poverty, he said.
Brockmann said developing countries need support to strengthen their domestic resource mobilisation. “These will help attract healthy, non-speculative foreign direct investment, which when it complies with national laws and priorities and is embedded with social responsibility, constitutes an important complement to public investment and official financial aid,” he added.
