Tuesday, February 10, 2009

Europe, developing countries and the financial crisis: response from different actors

Source: EU News, Issue 1, February 2008

The global financial crisis that erupted in 2008 will have dramatic economic, social, environmental and political consequences for all countries during 2009 and beyond. The developing world has been marginalized in many of the discussions to date, though it is directly affected. An important first step was taken with the G-20 Washington summit in November 2008 which acknowledged the need to include Southern countries in the reform of global governance.

Such a reorganization of the global system of governance raises the question on the role which Human Rights will play in the future. Social Watch – an international NGO that monitors poverty eradication and gender equality – emphasizes Human Rights as the solution in its “Social Watch Report 2008 - Rights is the answer” launched on 7th of January 2009 at the European Parliament, in the presence of Luisa Morgantini, Vice-President of the European Parliament. There concern was expressed about the risk that donors may reduce support for development and poverty eradication in view of the economic crisis. Others argued that an increase in spending on the efforts to improve Human Rights, gender equality and decent work will, in the long run, help in dealing with the crisis.

The consequences of the financial crisis for developing countries constituted one of the topics discussed on 30 January at the Informal Meeting of EU Development Ministers held in Prague, attended by European Commissioner for Development and Humanitarian Aid Louis Michel and representatives of the European Parliament Committee on Development.

Although the effects of the financial crisis on developing countries are not yet fully visible, they are likely to be considerable, the Ministers declared. It was also observed that, therefore, it is all the more important that the European Union and other developed countries fulfil their obligations in the area of development aid, from the perspective of quantity as well as quality (effectiveness of aid). During the debates on the reform of the international financial architecture, the ministers also evaluated possibilities of taking into consideration developmental aspects, including more influence for the developing countries themselves in the IFIs. Particularly disappointing however is the reluctance on the side of the UK and a few other member states to undertake any action in favour of combating tax evasion and better regulate and control tax havens. It is also surprising that a new round of debt cancellation has not been given more consideration, given that it could quickly release extra revenues to many developing countries facing serious fiscal pressures.

A major challenge for development (and environment) ministers will be to make sure that their concerns regarding the impact of the financial crisis on developing countries and climate change finance inform the debates of the EU finance ministers and the G-20. A proposal for a “support plan for the developing world” is currently being developed by the European Commission, to be finalized together with Development Ministries in March as an input to the EU position for the G-20 summit.

European civil society organises itself in response to the global financial crisis
The next G-20 meeting will take place in London on 2 April 2009. This will be the first high level summit on this issue with the new US president and opportunities for change are now higher. Strong measures must urgently be taken by world leaders not only to deal with the symptoms but also address the causes of the crisis. In preparation of the G20 summit, Eurodad and a number of other European networks and European trade unions launched a process to organise joint strategies and mobilisation efforts. This process started in Paris during the second week of January, with a cross network meeting gathering more than 130 CSO representatives from across Europe, including APRODEV. Main topics analysed during the meeting were: causes; major social and environmental consequences; challenges of the crisis, together with opportunities for change; the financial system; and the trade and regulatory framework. A specific focus has been given on Europe’s responsibilities and responses, and CSOs.

The declaration adopted in Paris and other information is available on the Eurodad website.

See also Euforic's newsfeeds on the financial crisis, CIDSE and APRODEV