Financial turmoil will damage human development, UN warns by United Nations News 3:10am 1st Apr, 2009   April 2009    As leaders of the Group of 20 (G-20) nations gear up for their meeting tomorrow, the United Nations is warning that the current global economic crisis threatens to unleash a human development catastrophe in the world’s poorest nations.    Secretary-General Ban Ki-moon will press participants at the London gathering for urgent collective action to boost development and allow people to keep their faith in their future, spokesperson Michele Montas told reporters.    At a meeting today in London on climate change and forests, he reiterated the need for ‘green’ growth – which has the twin benefits of lowering carbon emissions and spurring prosperity – to “jumpstart recovery and generate jobs.”    Mr. Ban will warn the leaders that the global recession hurts everyone, but especially the poor, who in some countries spend up to 80 per cent of their incomes on food.    The UN Development Programme (UNDP) has also called on the heads of the G-20 nations to recognize that those most vulnerable to the crisis – which is not exclusive to Europe or the United States – are living outside the spotlight.    Those attending tomorrow’s event “should recognize the human development calamity facing the people of the poorest countries and commit the resources to bail them out,” said Ad Melkert, UNDP Associate Administrator.    Remittances have slumped, trade has collapsed and commodity prices continue to be volatile, plunging more families into extreme poverty and increasing mortality as a result, UNDP said. A 3 per cent drop in gross domestic product (GDP) for developing countries leads to up to 120 more infant deaths per 1,000 live births.    The crisis is a “matter of life or death for many people in the poorest countries,” Mr. Melkert said. “While the economic recovery may start in 2010, the damage to human development will be severe and social recovery may take us several more years,” he noted, adding that the impacts may be felt as far away as 2020.    The official also pointed out that in past recessions, poorer nations have suffered disproportionately compared to their wealthier counterparts, witnessing falls in health and education indicators. Life expectancy, school enrollment and graduation rates all drop, and in low-income countries, women, children and society’s poorest segments are most likely to bear the brunt of the economic collapse.    Also warning about the impact of the financial crisis on schooling was Koďchiro Matsuura, Director-General of the UN Educational, Scientific and Cultural Organization (UNESCO), who called for greater investment in education.    According to research, extending the average period spent at school by one year will boost per capita GDP by 4-6 per cent, he said. “By injecting resources into education now, not only would we stimulate economic recovery, but we would also contribute to stronger growth in the future and guarantee global stability in the long term.”    New World Bank data shows that developing countries’ economic growth will slow sharply to 2.1 per cent this year, marking a 3 per cent drop from 2008. As a result, tens of millions more people will fall into poverty this year, living on less than $1.25 a day, due to the crisis.    Additionally, the world economy will contract by 1.7 per cent compared to last year’s 1.9 per cent growth, making the first global decline since the Second World War.    “In London, Washington and Paris, people talk of bonuses or no bonuses,” Ngozi Okonjo-Iweala, managing director of the World Bank said. “In parts of Africa, South Asia and Latin America, the struggle is for food or no food.”    For its part, the UN International Fund for Agricultural Development (IFAD) has called on governments to accelerate agricultural development, with the financial downturn pushing millions of poor rural people – into abject poverty.    “We ignore the world’s poor farmers at our peril,” said IFAD President Kanayo F. Nwanze. “As we strive to recover from the current turmoil, these farmers must be part of the solution.” Given the necessary support, they can help the world to avert food crises, he said.    April 2009    Bank bailout could end poverty for 50 years – Oxfam tells G20.    The $8.42 trillion promised by rich country governments to bailout banks would be enough to end global extreme poverty for 50 years and a massive step towards ending it forever, Oxfam said today ahead of the meeting of G20 leaders in London on Thursday.    Oxfam says G20 leaders could make a massive difference to the world’s poorest people by diverting a tiny fraction of the bailout money to provide an economic stimulus, social safety nets and health services for those affected by the economic crisis.    Oxfam is calling for a $580bn-a-year rescue package for poor countries made up of an immediate fiscal stimulus for the poorest countries of at least $24bn, debt relief and fulfillment of existing pledges to increase development aid.    Urgent action is also needed to crackdown on tax havens, which deprive developing countries of hundreds of millions of pounds of tax revenue every year – much more than they receive in development aid.    Barbara Stocking, Oxfam Chief Executive, said: “When you look at the amount of money that has been found for banks it seems inconceivable that G20 leaders will stand aside and allow the economic crisis to destroy poor people’s lives."    “Developing countries are reeling from dramatic declines in trade, remittances and foreign investment. Rich governments whose policies contributed to the crisis have a responsibility to help those who cannot afford their own bailouts."    “Without urgent action, hundreds of millions of the world’s poorest people will fall further into poverty. Losing your job is devastating wherever it happens but for millions people in poor countries, without benefits and health services to fall back on, unemployment will push them into destitution.”    An Oxfam report, published earlier this week, revealed women are hit hardest and are often the first to lose their jobs as countries slide into recession. For many, in developing countries the recession comes on top of high fuel and food prices that have already stretched communities to breaking point.    Oxfam is pressing for rich country governments to promote a ‘green new deal’ by ensuring their domestic rescue packages help tackle climate change by accelerating the transition to a low-carbon economy.    Oxfam is also calling for reform of international financial institutions, including the IMF and World Bank, to give developing countries a real say in the decisions that affect them.    Stocking said: “We cannot return to the situation where the greed of the richest was allowed to take precedence over the needs of millions. G20 leaders have a real opportunity to take a significant step towards a fairer, more sustainable world.”    Note to editors: The $8.42 trillion – made up of capital injections, toxic asset purchases, subsidised loans and debt guarantees – is equivalent to more than $1,250 for every man woman and child on the planet. The annual cost of lifting the 1.4 billion people living on less than $1.25-a-day above this threshold is $173bn.
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