One outcome of the G-20 meeting (as I wrote yesterday)
was an agreement to earmark as much as $1 trillion for developing
countries, where the economic crisis is having a life-threatening
impact. This figure is in line with what the United Nations estimates is needed to "buffer the blows of the global downturn on the most vulnerable."
This month's G20 meeting ended with one overriding tangible agreement: A commitment by the rich countries to provide more than $1 trillion in assistance (mostly in the form of loans) to developing countries.
This money is desperately needed. Although they had nothing to do with mortgage-backed securities or credit default swaps, developing countries are getting worst hit by the global economic meltdown. The World Bank conservatively estimates that 53 million more people will be trapped in deep poverty due to the crisis.
Our world "leaders" have decided to pump $1.1 trillion into the International Monetary Fund (IMF) to allegedly help countries suffering from the global financial collapse. Seeing as the IMF has a 60-year track record of not effectively promoting development or democracy, we need a new way for this money to be used-not to enforce business as usual-but to empower grassroots democratic development.
A visit to Western Europe in early March provided some slightly
different -- if unsettling -- insights into global economic
arrangements and their socio-cultural co-ordinates. As the crisis
unfolds, people everywhere are questioning current economic
institutions and processes, and naturally enough their fears,
insecurities and concerns also affect their visions for the future.
The fundamental issues relate to income and resource distribution
(don't they always?) but in this time of global crisis, the expression
of these issues can become sharper and even more openly divisive in
While
the economic contraction is apparently slowing in the advanced
industrial countries and may reach bottom in the not-too-distant
future, it's only beginning to gain momentum in the developing world,
which was spared the earliest effects of the global meltdown.
Fannie Mae, Freddie Mac, Chrysler,
AIG, General Motors and Citigroup have all been called "too big to
fail". As the story goes, their collapse would cause "systemic risk" to
the US economy. To avoid such risks, developed nations are spending trillions of dollars on bank bailouts and stimulus plans.
I sat with my family under a shady ficus tree
last week in Melaque, Mexico. Filled with contentment from a good
seafood lunch, we fell into the dangerous activity of drawing broad
observations about our single week in the country. Nary a donkey or
sombrero was among our impressions of Mexico, however, which were
not of sleepy agrarian poverty. Rather, we were impressed with the
can-do pragmatism, good-humored community and holiday celebrations,
effective public services, and healthy-seeming families we met and
saw.
In his 2005 book The World Is Flat,
Thomas Friedman joined a chorus of economists who touted India as the
latest development success story, despite overwhelming evidence to the
contrary. While India has developed a middle class with disposable
income for the first time in recent history, such growth has not been
accompanied by meaningful poverty reduction.
