Wednesday 26 September 2018

Developing world takes West to task over crisis

Doha, December 1, 2008

Developing nations at a UN aid summit turned the tables on wealthy Western powers, blaming them for bringing financial ruin to their doorstep and demanding a greater voice in global financial institutions.

The meeting in Qatar, which concludes on Tuesday, was one of the largest gatherings to include developing nations since the financial crisis erupted and they seized the chance to vent their anger.

Qatar's ruler and conference host set the tone with a pointed reference to the 'recession which the developed world is about to enter and drag with it the rest of the people on our planet.'

After years of being on the receiving end of Western largesse but also critique, developing countries seemed to revel in the opportunity to chide the powerful West over its own failures, in particular the United States.

'Blame is a harsh word but in this case maybe a realistic one,' Mariano Browne, a Trinidad and Tobago minister of state, told Reuters.
The crisis was sparked by a meltdown in the US subprime mortgage market which unravelled a network of complex financial instruments and sent economies careening into recession.

Though shielded from most aspects of the banking and stocks debacle, developing nations are suffering falling exports, lower remittances and a lack of access to credit markets.

Some leaders took pleasure in the West's difficulties.

Iranian President Mahmoud Ahmadinejad was quick to claim the capitalist era with its 'deceptive economic ploys' was over. And Zimbabwe's President Robert Mugabe, under international sanctions, said 'organisational bias' had favoured interests of strong states.

Other leaders were bemused. The president of tiny Sao Tome and Principe glumly wondered whether his island nation should have undertaken IMF-imposed structural adjustment programmes after all, given what has happened.

Calling the shots   

The crisis has highlighted the disparity between rich and developing nations' economies as the West spends trillions of dollars on bank bailouts while poorer countries try to borrow funds to cover basics.
'Small island nations stand extremely vulnerable and helpless,' said Maldives minister of state Ahmed Naseem. 'We have to deal with huge fiscal and budgetary deficits while international borrowing has been curtailed.'    

The Maldives is struggling to fund sea transport of goods to citizens scattered across some 200 islands in the Indian Ocean.
'You're talking about bailing out Wall Street and Main Street when some of these people don't even have streets,' Salil Shetty, director of the UN's Millennium Campaign, which aims to reduce extreme poverty, told Reuters.

At the Doha meeting, overshadowed by the crisis and the absence of most Western leaders, the two sides were deadlocked over demands to reform the Bretton Woods financial system.

Developing states want any final statement to feature a call for a UN summit soon to discuss the topic. Rich nations, notably the United States, are opposed.

The view that they are paying a big price for a crisis they had no part in creating has only made developing nations dig their heels in and insist the reform commitment be included.

'The world has changed,' said another Caribbean delegate, who asked not to be named. 'They can't call the shots any more ... They don't want to give up power, it's obvious.'    

In the end though, most developing world leaders returned to a central theme that aid is needed now more than ever and urged rich nations to fulfil promises in spite of the crisis.

By that point, no one needed to add the unspoken words: For which you are to blame.-Reuters

Tags: economy | UN | Trade | Recession | talk | Doha round |


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