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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2678

U.N. Seeks Bailout Package for World's Poorest

By Thalif Deen, Inter Press Service

United Nations, 14 November, (IPS): The buzzword in the international community these days is "bailout" -- the multi-billion-dollar economic rescue packages aimed at helping a rash of faltering investment banks and insurance companies, mostly in the United States and Western Europe.

The United Nations, which has expressed fears that its poverty and hunger eradication programmes could be wrecked by the spreading global economic crisis, is now calling for its own bailout plan: a 300-billion-dollar package to help the world's poorest nations.

The appeal for funds is being made to the leaders of the G8 countries -- the United States, Britain, France, Germany, Japan, Italy, Canada and Russia -- who are due to participate in an economic summit hosted by President George W. Bush in Washington on Saturday.

The G20 economic summit will also include leaders from developing nations: Argentina, Brazil, China, India, Indonesia, South Africa, Saudi Arabia and Turkey, among others.

According to the U.N. Millennium Campaign, the proposed 300-billion-dollar package will be for additional aid and debt relief to compensate the loss in gross domestic product (GDP) by the world's poorer nations as a result of the financial crisis "they had no role in causing".

"The trillions of dollars found overnight to bail out Western bankers have shown us that the real issue we face in addressing this global crisis is not the availability of money, but of political will," said Salil Shetty, director of the U.N. Millennium Campaign, which is mandated primarily to help fight hunger and poverty worldwide.

Asked why a bailout of developing nations should be in the interests of the world's rich countries, Shetty told IPS: "They know that any reversals to the Millennium Development Goals (MDGs), which are the most basic needs for the poorest people in the world, will be catastrophic not just for poor countries but for world peace and prosperity."

"So, whether it is on grounds of self-interest or a sense of justice and morality, the case for the bailout package is clear," said Shetty.

U.N. Secretary-General Ban Ki-moon said Thursday the current crisis "also shows us how interdependent we have all become, and how we can be both harmed and helped by the policies of others."

But it is essential, he said, that the G20 meeting signals an unmistakable common resolve to overcome the crisis, to act together, to act with urgency and to show solidarity towards the neediest.

"An important way of doing this will be by meeting existing commitments on aid, so that progress towards the Millennium Development Goals can be maintained," Ban said.

For the world's 1.4 billion people living on less than 1.25 dollars per day, having less purchasing power is literally a question of survival, the difference between whether their children get a meal each day or not.

The MDGs include a 50-percent reduction in extreme poverty and hunger; universal primary education; promotion of gender equality; reduction of child mortality by two-thirds; cutbacks in maternal mortality by three-quarters; combating the spread of HIV/AIDS, malaria and other diseases; ensuring environmental sustainability; and developing a North-South global partnership for development.

A summit meeting of 189 world leaders in September 2000 pledged to meet all of these goals by the year 2015. But their implementation, initially hindered by a decline in development aid, has been undermined further by the current global economic crisis.

In a letter to G8 leaders Thursday, the secretary-general said that at an informal session of the 192-member General Assembly early this week, he listened to some of the concerns of member states present, and heard about the dire problems they face because of the crisis.

He said some of these countries with "powerful developed economies", as well as countries with emerging engines of growth, will be participating in the Washington summit.

"But over 170 countries will not be present at the table, and they also face grave difficulties," Ban noted.

Whether these are developed or developing countries, Ban said, "Their voices too should count and I will try to bring these voices" to the meeting.

The IMF is currently in the process of bailing out at least three countries: Iceland, Hungary and Ukraine.

The economy of Iceland, categorized at one time as an industrial nation, is on the verge of total collapse.

In the 2007-2008 Human Development Report by the U.N. Development Programme (UNDP), Iceland was ranked number one (out of 177 countries) in the Human Development Index, just ahead of Norway, Australia, Canada and Ireland. Iceland achieved top ranking by scoring high on GDP per capita, life expectancy and adult literacy rate.

According to the Millennium Campaign, the proposed 300-billion-dollar package could be a combination of additional aid from the G8, debt relief, and, if required, gold sales by the International Monetary Fund (IMF).

"Recipient governments must in turn ensure that these funds are allocated for a significant scaling-up of social expenditures on education, health and social protection programmes," the campaign says.

These programmes must particularly target the poor and excluded members of society -- especially women and children.

Asked how confident he was that the G8 will respond positively to the bailout proposal, Shetty told IPS: "They have repeatedly restated their commitment to the MDGs, from the Millennium Summit in 2000 to the World Summit [in New York] and Gleneagles [Scotland] in 2005, to the Hokkaido [Japan] G8 meetings, and the U.N. High Level Event on the MDGs (New York) in 2008."

The bailout package to a handful of Wall Street and allied bankers and financial institutions is in estimated to be in the order of 5.0 trillion dollars of public money, Shetty said.

"To say they can't deliver 140 billion dollars in terms of their 0.7 percent promise for the poorest will in the long run be a really costly mistake. No other investment will have as high a return as an investment in the MDGs," he added.

- Asian Tribune -

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