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I fear a looming catastrophe
The Guardian (UK)
02 April 2009
By Ban Ki-moon
Today’s meeting can make the difference between human hope and despair, between economic recovery and a plunge into deepening recession. We have seen the frightening velocity of change. What began as a financial crisis has become a global economic crisis. I fear worse to come: a full-blown political crisis defined by growing social unrest, weakened governments and angry publics who have lost all faith in their leaders and their own future.
We must stop the slide. The recession hurts everyone, but those hurt worst are the poor – people with no homes or savings to lose, who in some countries spend as much as 80% of their income on food, and often lack the basics of healthcare, water and sanitation. They are the majority of the world’s people – and they have no safety net.
In good times, economic and social development comes slowly. In bad times, things fall apart alarmingly fast. It is a short step from hunger to starvation, from disease to death, from peace and stability to conflict and wars that spill across borders and affect us all, near and far. Unless we can build a worldwide recovery, we face a looming catastrophe in human development.
This is what I will tell world leaders at the G20 summit in London. That is why I will press for urgent collective action to bolster global development and allow people to keep faith in their future.
We must recognise our interdependence. No single nation can hope to find economic security without taking into account the wellbeing of others. We therefore need a truly global stimulus. Between now and the end of next year, at least $1tn will be needed to provide liquidity, longer-term resources for –productive investment and a safety net for the poorest and most vulnerable.
The G20 looks likely to take steps that ensure developing countries have access to liquidity through the IMF. This is important because developing countries are experiencing a credit crunch that has devastated trade and slowed growth. There is a thin line between failing banks and failing countries, and we cross it at our peril.
G20 leaders may also agree to boost lending by the World Bank and other development banks. This is important because private funding for infrastructure projects has contracted sharply.
The poorer countries have had no part in the making of this crisis and yet they are in danger of suffering the most. That is why those countries that made a commitment to raising aid at Gleneagles in 2005 should reaffirm that promise, and also allocate more to poorer countries. This would amount to at least $300bn of assistance during 2009 and 2010.
Meanwhile, we must resist short-sighted pressures that would compromise, if not destroy, the progress we make in London – and say no to the new protectionism. At their last summit, in Washington, the G20 nations solemnly promised not to place new restrictions on trade. Since then 17 of the 20 have done precisely that. We must reverse this.
The London summit is an opportunity for the world’s most powerful nations to act together and show solidarity with their less fortunate neighbours on our small and increasingly vulnerable planet. Across the globe we face massive job losses. Many of the unemployed will be young and angry. Many work in foreign lands, sending money home for food, medicines and school fees. These remittances make up large percentages of some nations’ GDP. Their collapse lights a dangerous social fuse.
One trillion dollars over two years is not so large a sum, considering the consequences. Some might call it a moral imperative. But if our goal is to reverse a global slump, it is also sound economics.
Ban Ki-moon is the Secretary-General of the United Nations