A pledge by world leaders to pump $1 trillion into the International Monetary Fund will help “cushion the impact” of the global financial crisis on the world’s poor and marginalised, but “fails to go far enough”, international development agency Progressio says today.
As details of the top-level decisions taken at the one-day summit in London emerged, Progressio’s Executive Director Christine Allen said: “The measures outlined at the G20 today are a good first step - but we are still far from resolving the needs of the world’s poorest people.”
According to the G20 communiqué, the International Monetary Fund (IMF) – the reserve available to countries in financial difficulty – will receive an additional $250 billion dollars, which will in effect create an overdraft for use by some of the world’s poorest nations.
In addition, the top 20 developed nations will provide $500 billion more to the IMF which will be made available via loans to member states with ailing economies – rich or poor. And, $100bn has been earmarked for use in loans to the world’s poorest countries.
Progressio’s Advocacy Manager, Tim Aldred said: “It is more than we expected. But we would have hoped that more of the $1 trillion would be explicitly targeted at the world’s poorest people. At best it looks like this money will keep poor people where they are, rather than lifting them out of poverty.”
He added: “We are still awaiting details of how these IMF loans will work in practice; we very much hope the money will not be plagued by the kinds of conditions we have seen in the past, which have so often rendered loans useless. Rich nations have a duty to make these funds work for the world’s poorest people. And they have a duty to free up the money as quickly as possible.”
In Malawi – where more than half the 14.3 million population lives below the poverty line – the G20’s announcement received a cautious welcome from Progressio’s development workers.
Lloyd Simwaka, Progressio’s country representative in Malawi urged the G20 to act quickly to deliver the promised cash. Otherwise, he warned, “people will die in the meantime”. “For too long the G20 has been about rhetoric rather than real commitment to eradicating poverty,” he said. “My message to the world’s leaders would be that they should find quick mechanisms of making this happen. They need to find practical ways of reaching out to poorer countries.”
The G20 communiqué made little mention of measures to tackle climate change, though world leaders backed the need for new measures. These will be discussed at Copenhagen in December. “We’ve heard the warm language, now we need to hear the specifics”, said Tim Aldred. “We need to see more green jobs and a greater investment in renewable energy.”
Meanwhile, a Progressio development worker in Peru warned that action on climate change must be taken soon. “If politicians persist in evading the necessary targets and weakening their resolve, whether through red tape or self-interest, millions of poor people will, in effect, be abandoned by the West to the escalating impact of an unpredictable and increasingly merciless climate,” said Bruno Guemes.
The G20 also took steps to regulate tax havens and reaffirmed commitments to deliver 0.7% of gross national income in aid to the world’s poorest countries, thereby honouring a pledge to meet the Millennium Development Goals.