Opinion: Development in a downturn

Writing in the Guardian, former UN Secretary-General Kofi Annan has added his support to the growing chorus of voices demanding that the needs of the world’s poorest to be placed at the heart of international efforts to stabilise and boost the global economy. With unemployment and financial hardship at home making the headlines, we cannot and must not overlook the potentially enormous problems facing the developing world as a consequence of a situation for which they are entirely blameless.

Last week the G20 finance ministers met in Sussex to set the agenda for the forthcoming London Summit. Although it was encouraging to note that the communiqué that emerged from this meeting clearly indicated recognition of the need to support the developing world at this time of crisis, the extent to which these sentiments will be carried forward to the leader’s summit and reflected in significant new financial or institutional commitments remains unclear.

The G20 summit cannot achieve its aims without putting into place a comprehensive framework of support for vulnerable nations. Declining levels of Foreign Direct Investment, shrinking remittance flows and low commodity prices will all have a disproportionate impact on the lives of people within the developing world, with the World Bank estimating that the economic slowdown could keep an additional 53 million people in poverty in 2009. The complex and urgent nature of the task at hand should be reflected in the solutions offered by the G20; short term entitlement protection must be accompanied by more substantive reforms if the London summit is to successfully set the scene for an economic recovery and longer-term stability.

As we recapitalise our own banks, we must ensure that vital international capital flows are restored to help close the finance gap that developing countries will face in 2009. As we overhaul our moribund international regulatory framework, action must be taken to prevent multinational companies avoiding and evading taxation through the use of offshore havens, a practice Christian Aid have estimated costs the developing world $160 billion every year. As we increase levels of aid to provide food security for those still suffering from the effects of record price increases in 2008, the developed world must acknowledge and remedy their failure to meet the commitments on aid made at the Gleneagles summit in 2005. With the G8 nations some $34 billion short this year of their $50 billion 2010 target for ODA, item one on the development agenda should be the setting out of a ‘Gleneagles recovery plan’ with a timetable and key milestones for the pledges not yet achieved.

There has been much comment in recent weeks on the opportunity that the financial downturn offers the government and international community to place environmental sustainability at the centre of the recovery. Shifting the global economy onto a path of low-carbon growth is essential if we are to recover from this crisis without it costing the earth. It is imperative that the developing world is included in any ‘Green New Deal’, and that the actions taken by the G20 in a fortnight’s time are consistent with our long-term environmental priorities.

The Liberal Democrats believe that the G20 summit offers the international community the opportunity to begin to make amends for the mistakes and broken promises of the past. In our new policy paper, ‘Development in a Downturn: dealing with the global emergency’ we have set out our development agenda for the G20. Our broad priorities are threefold: firstly, we must refocus minds on development aid, establishing an ODA ‘recovery plan’ as suggested above. Secondly, we need to galvanise the private sector in developing countries by increasing the capital available to the World Bank and other development finance institutions. Finally, we must provide a safety net for those who need additional short-term assistance by increasing our support for the World Food Programme, and allocate funds to support the establishment of a new Global Fund for Social Protection. Reflecting the importance of environmental sustainability, our £I billion stimulus for the developing world also includes significant new resources for investment in green technologies.

Given the previously glacial pace of negotiations on issues such as trade and climate change, this agenda may seem challenging, but the unprecedented nature of the current situation demands rapid and comprehensive action from the development community. If the G20 fail to ensure that the developing world is included as we seek to stimulate and reform the global economy, sustainable development, economic growth and social stability will prove elusive.

Michael Moore MP is the Liberal Democrat Shadow Secretary of State for International Development

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This entry was posted in Europe / International and Op-eds.

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