The International Monetary Fund and the World Bank should use their spring meetings to deliver the G20’s promise to protect the world’s poorest countries from economic devastation,says the development agency Oxfam.
Dramatic declines in trade, remittances and foreign investment are hitting developing countries, the NGO says. The world’s poorest countries are particularly vulnerable to the economic crisis, which is expected to push 46 million more people into poverty this year - the equivalent to the entire population of Spain.
Marita Hutjes, Oxfam senior policy advisor, commented: “G20 leaders’ pledge to increase IMF and World Bank funding is welcome but that blank cheque should now be made out in favour of poor countries. It’s still unclear how promises for support for the poorest countries will materialise.
“Rich countries’ governments need to arrive in Washington this week with concrete funding commitments. This money must not come at the expense of existing aid budgets. Instead rich countries must deliver on their commitment to provide 0.7percent of their national income as aid, as soon as possible. Rich governments whose policies contributed to the crisis have a responsibility to make this happen.”
Oxfam is also calling on the IMF to confirm the G20’s promise that the fund will use the sale of gold reserves to release additional finance for low income countries. It should also commit to doubling cheap loans to these countries.
Along with the greater role in tackling the economic crisis which the IMF and the World Bank have been given, comes a greater responsibility to move on long-awaited reforms to their lending arrangements and governance, Oxfam said.
Hutjes declared: “Loans must not worsen the impact of the economic crisis on the poorest. It is essential that loans and grants are disbursed quickly and that they come without onerous or harmful conditions attached. Everything must be done to ensure that poor countries are not landed with even more debt.
“It’s time that the IMF and the World Bank became more democratic to allow developing countries an equal voice in decision making. Governance reform is pivotal - the Europeans and the US need to cede some of their power over these institutions now.”