| | |  Americas & Beyond | March 2009 
UN Urges 1 Trillion for Developing World
 Financial Times
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 |  | In providing this support you will bolster the global economy, help to underpin your own growth and secure global stability
- Ban Ki-moon in letter to G20 leaders |  | | |
Ban Ki-moon, United Nations secretary-general, on Wednesday called on Group of 20 leaders to support a $1,000bn stimulus package for developing countries threatened by the global financial crisis.
In an interview with the Financial Times, Mr Ban said he would use next week’s G20 summit in London of leading developed and emerging economies to call for developed countries to meet unfulfilled overseas aid targets, to provide funding to tackle climate change in poorer regions, and to help with liquidity for emerging economies.
“I will ask them to provide a truly global stimulus package that meets the needs of all developing countries and I would suggest $1,000bn over the next two years,” he said.
In a pre-summit letter to G-20 leaders, Mr Ban wrote: “While this is a large sum, most of it could be mobilised through existing mechanisms and institutions. In providing this support you will bolster the global economy, help to underpin your own growth and secure global stability.”
He said he welcomed the actions of G20 leaders to co-ordinate domestic stimulus plans in response to the global crisis. “But my message will be that they should never lose sight of the plight or the challenge of the developing countries, the most vulnerable countries.”
The standard of living in the developed world, he said, meant people were cushioned from the worst aspects of the financial crisis but those in the poorest regions had no protection.
“If we don’t handle the current economic crisis properly with a sense of strong determination and very strong and solid political leadership I’m concerned that this may not only be an economic crisis, but may develop into global political instability,” he told the FT.
The proposal for a $1,000bn (€737bn, £687bn) global stimulus package would involve industrialised states fulfilling aid targets that they are already failing to meet. Mr Ban said overseas development aid of $100bn a year would be higher if donor states had stood by commitments made at the 2005 G8 summit at Gleneagles.
To fund the aid component of his $1,000bn plan, they would have to meet an aid target of $125bn annually. “The Gleneagles commitment was made in ‘peacetime’. I’m sorry that this commitment has not been met,” Mr Ban said. “Now the leaders are meeting at a time of crisis. So they should have a sense of urgency. Then, I think, we can generate resources. I think this is do-able.”
Liquidity support to developing countries should also be expanded and strengthened by “about $500bn”, Mr Ban said. In his letter to G20 leaders, Mr Ban wrote: “This could be generated through augmenting the resources of the International Monetary Fund by various means, including issuing and redistributing additional Special Drawing Rights.”
A further component of the package would be $250bn of long-term lending to developing countries spread over 2009-10. “The World Bank and multilateral development banks can collectively work on this matter,” Mr Ban said.
Mr Ban said he would also urge G20 leaders to seize the opportunity to shift the world economy towards sustainable growth, and “green” jobs and technologies. “They must form part of any global stimulus plan”.
He said he would urge the G20 to avoid protectionism and encourage world leaders to resume urgently the Doha round of global trade talks. “Protectionism at this time of global economic crisis is very shortsighted and self defeating,” said Mr Ban, who discussed his proposals in New York on Wednesday with Gordon Brown, UK prime minister.
He said he would also support the G20’s efforts to reform international financial institutions such as the World Bank and IMF to reflect the new economic and political landscape. |
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