Posted April 3, 2009
Global Economy

At Stake Are More Than Banks

G20 - "As world leaders gather in London for the Group of 20 summit meeting, the most wrenching statistic is this: According to World Bank estimates, the global economic crisis will cause an additional 22 children to die per hour, throughout all of 2009.

And that's the best-case scenario. The World Bank says it's possible the toll will be twice that: an additional 400,000 child deaths, or an extra child dying every 79 seconds.

'In London, Washington and Paris, people talk of bonuses or no bonuses,' Robert Zoellick, the World Bank president, said this week. 'In parts of Africa, South Asia and Latin America, the struggle is for food or no food.'

... If the G-20 leaders want to address these needs, there are many ways they can do so with negligible sums. Mr. Zoellick at the World Bank is pushing a trade support program to help developing countries sustain their trade. Muhammad Yunus, the microfinance pioneer who won the Nobel Peace Prize, urges the G-20 leaders to create a fund to invest in organizations that offer small loans or otherwise bolster commerce in poor countries." [Nicholas D. Kristof , in The New York Times, 4/02]

... the poor countries: they don't have the economic independence to do a stimulus on their own. They have very limited means to do counter-cyclical investment. They have social protection needs with possibly tens of millions of people driven below the poverty line. A strong package based on the IMF and World Bank is critical for them. Finally to the strengthening of these international institutions which is so critical as the instruments of managing all of this - the IMF and World Bank. We will see a significant growth in the World Bank's role. We will see a huge enhancement of the IMF's resources. It is critical for those of us who believe in the importance of an international system that money comes with reform. [Lord Malloch Brown, in The Independent, 4/02]

We now need a small fiscal stimulus for Africa. It will be a tiny fraction of what we are spending on bailing out the banks. The Overseas Development Institute and the National Institute of Economic and Social Research show that a counter-cyclical investment of $50bn (?38bn, ?35bn) for Africa would start paying for itself immediately. US and Chinese exports would rise by $1.4bn in 2009, UK exports by $750m, German exports by $2bn. Currently the G20 is proposing more resources for the Asian Development Bank, but what about the equally critical African Bank? Many "shovel ready" projects need funding. It is clear that African growth is part of the solution that reboots the global economy. [Bob Geldof , in The Financial Times, 4/02]

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