UN urges donors to boost aid to poor countries despite economic crisis by UNDP Administrator Helen Clark 2:40am 10th Sep, 2009   9 September 2009    Facing possible shortfalls in funding due to the global economic crisis, the United Nations Development Programme (UNDP) today called on donors to “continue, and ideally boost, their current commitments” to help the agency pull the world’s developing countries out of poverty.    “I am concerned that we may not meet our income targets for 2009 and 2010, and that we will face a continuing imbalance between contributions to regular and other resources,” UNDP Administrator Helen Clark said, calling on the Group of Eight (G8) leading industrialized countries to fulfil their oft-stated pledge to commit 0.7 per cent of their gross national income to official development assistance (ODA).    She stressed that the Millennium Development Goals (MDGs), the UN-endorsed targets which seek to mitigate a host of social ills ranging from poverty and hunger to maternal and infant mortality to lack of access to health and education, all by 2015, remain at the core of UNDP’s Strategic Plan.    “With 2015 now barely six years away, we need an enormous focus on the MDGs,” she told a session of the Executive Board of UNDP and the UN Population Fund (UNFPA). “Nowhere is that more important than in Africa, especially in these challenging times when African nations and their peoples have been hit hard by the economic crisis.    “As is well known, no country in sub-Saharan Africa was on track to achieve all the MDGs before the crisis. It would be a double blow if the global recession acted to reverse hard won progress towards the MDGs.”    Many developing countries, facing reduced domestic revenue this year, need support to maintain budgets for basic services like health and education, vital ingredients in meeting the MDGs, Ms. Clark said.    “If children are pulled out of school because of the effects of the crisis on their families and their countries’ budgets, they may never get a second chance in education. If children have poor nutrition because of the crisis, the long-term effects on their cognitive skills and productive potential are serious,” she added.    “Profound economic crisis in vulnerable countries then may extend into a humanitarian crisis, and at worst precipitate instability and conflict. The consequences may take years or even decades to remedy, ultimately at a much greater cost to the international community than timely support right now.”    Without secure and predictable funding, UNDP cannot plan ahead and be fully effective in helping countries reach their development goals, Ms. Clark said.    “We will, however, spare no effort to meet our resource projections. We do deeply appreciate the ongoing support of our donors, and urge them to continue, and ideally boost, their current commitments. We can also consider how our donor pool could be expanded,” she added.    8 September 2009    Economic, financial crises far from over, warns latest UN trade report.    The global recession is unprecedented in its depth and breadth, and has left no country unscathed, according a new report by the United Nations Conference on Trade and Development (UNCTAD) launched today, predicting a gloomy economic future.    The UNCTAD report blames excessive risk-taking made possible by financial deregulation and innovation in obscure financial instruments for the economic turmoil inflicted across the world over the past year.    The crisis that initially began in the financial sector now has turned into a dramatic downturn in the wider economy with global gross domestic product (GDP) expected to fall by more than 2.5 per cent this year, according to the 2009 Trade and Development Report.    GDP in the developed nations is forecast to contract by some 4 per cent this year, and output in the so-called “transition economies” is expected to fall by more than 6 per cent, while growth in developing countries is expected to slow from 5.4 per cent in 2008 to 1.3 per cent in 2009.    “The outlook is bleak,” UNCTAD’s Director of Division on Globalization and Development Strategies Heiner Flassbeck told reporters in New York.    Mr. Flassbeck cautioned that even in the most optimistic circumstances it could take up to six years for many countries to return to levels of GDP reached in 2007 before the crisis.    “On the global scale there are only two things that can promote growth,” he said. “One is consumption [and] the other is investment. There is nothing else, unfortunately.”    He noted that rising unemployment rates and depressed wages are obstacles to consumption, and new investment is hampered by idle manufacturing capacity and cuts in profits.    “We can only urge governments to go on with stimulating the economy,” said Mr. Flassbeck, stressing that all “talks about early exit strategies are premature. The world has to wait another one or even two years until the stimulus can be withdrawn and the private sector [can] go ahead on its own.”    In addition, banks still need to be recapitalized and their balance sheets cleansed of toxic assets before they can be guided back to their traditional role as providers of credit to investors in fixed capital, according to the report.    The report also spotlights elements of reform for the international financial architecture, which it says is long overdue, calling for a fundamental rethink of global financial governance to stabilize trade and financial relations by reducing the potential for gains from speculative capital flows. This will reduce the likelihood of similar crises occurring and help create a stable environment conducive to growth and smooth structural change in poor countries.
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