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NGOs offer proposals to address global financial crisis
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09:12, April 22, 2009

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As the world is haunted by the worst financial crisis since the Great Depression in the 1930s,efforts to address the crisis are really not a business for governments only. Non-governmental organizations (NGOs) can also play a constructive role in this regard.

NGOs showed themselves as one of the actors in the front against the global financial crisis by offering some proposals at a United Nations Non-governmental Liaison Service-sponsored press conference on Monday at the UN Headquarters in New York.

The press conference was organized to highlight the "warm-up event" for a high-level meeting of the UN Economic and Social Council (ECOSOC) with the International Monetary Fund (IMF), World Bank, World Trade Organization (WTO) and United Nations Conference on Trade and Development (UNCTAD) on April 27. The event also came on the eve of the spring session of the World Bank and the IMF, slated to be held in Washington.

John Foster of the North-South Institute, based in Canada, said civil society organizations have been very active lately, most recently at the Global Conference on Financing for Development in Doha, Qatar in November 2008, in making proposals to address the need to meet the challenge of legitimacy.

International groups such as the G-20, the G-8 and others lacked the "fundamental grounding in representation," he said, adding that those not represented in such groups suffered most from the global crisis.

TERRIBLE SOCIAL IMPACT

Roberto Bissio of Social Watch, an international network aiming at following up the fulfillment of internationally agreed commitments on poverty eradication and equality, said that the global crisis was having a terrible social impact.

"As growth is decelerating, has stopped or has even become negative in some countries, developing countries are suffering from a drop in commodity prices, a drop in remittances and scarce credit, while they had to compete with protectionist measures from other countries," Bissio said.

"While stimulus plans are needed, the developing countries are not in a condition to spend more," he said. "The IMF can not assist them in maintaining their social services -- as was suggested by the G-20 recently in London -- because of conditional ties, such as decreasing government spending," he said.

"The best stimulus plan to address the global economic crisis is to invest in the poor," he said.

John Foster of the Canada-based North-South Institute, which offers analysis to policy-makers, educators, business executives, media representatives, scholars and the general public, said that richer people, if they received money for stimulus, would just save it out of fear for the crisis, while the poor, whether living in developing countries or in rich countries, would spend every penny they received.

PROPOSED RESTRUCTURING OF IMF

NGOs also joined the outcry from the international community for a restructured world financial system.

Jo Marie Griesgraber of New Rules for Global Finance Coalition, a watchdog for the global efforts to eradicate poverty and achieve gender equality, pointed to the need for a more inclusive mechanism for financing for development than official development assistance (ODA), which could be seen as a charity.

"ODA is a volatile source of financing for developing countries, as it mostly comes at the bottom of donors' budgets after everything else is paid for," she said.

"The G-20 is wrong in thinking that the United Nations was the only organization responsible for foreign assistance," she said. "The United Nations included the Bretton Woods institutions, WTO, UNCTAD, civil society and the private sector."

She said the IMF could not be designated as the economic "security council," as it is now run by the major shareholders.

Before the IMF could get new, major responsibilities, changes in the organization must include who was hired, from which country, with which education and experience, she said.

She noted that most people at the IMF started after graduation and remained there their whole career. The IMF's policy toward poor countries has been consistent, resulting in recession and contracting economies. Emerging markets, such as Poland and Mexico, can get better deals, while rich countries could ignore the IMF.

"There is a need for better policies, diverse staff, accountability and transparency," she said. "After all, the IMF is a United Nations agency, under a treaty between the United Nations and the IMF."

Griesgraber said it was a "legal fact" that the IMF and the World Bank had treaties with the United Nations, which, although they established a great deal of independence for the institutions, made them "formally and legally" United Nations institutions.

MORE INCLUSIVE UN FINANCING FOR DEVELOPMENT MEETING

Foster said the existing process of financing for development must be strengthened.

"There should be a more comprehensive representation at United Nations financing for development meetings, not only involving ministers for development, but also including ministers of finance and of health, for instance," he said. "Those meetings should also be held more regularly."

"The aim of the financing for development process is to bring the institutions and the United Nations within the same tent, such as during the yearly high-level ECOSOC meetings in the spring," he said. "The World Bank has been enthusiastic about those meetings, the IMF less so, and the World Trade Organization has to be 'dragged in, kicking and screaming.'"

"Strengthening of the financing for development process depends on governments," he said. "It is, therefore, important that representation not only includes ministers for development, but also ministers of finance."

Source:Xinhua



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