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Protecting the world's poorest people should benefit all of us

In advance of the G20 summit in London, Kofi Annan argues that people in the least developed countries may be the biggest casualties of the global financial crisis - one that they played no part in creating. This article first appeared in The Guardian.

 

One might assume, with the barrage of bad news on jobs and announcements of gigantic bailouts, that the brunt of the global financial meltdown is being borne by developed countries like Japan, the UK and the US. In fact, people in the poorest countries may end up paying the highest price.

World Bank forecasts indicate declines in economic activity and jobs could result in more than 50 million people being added to those living on less that $2 a day. Hard-won gains in poverty alleviation, health, education and food security are being reversed.

As western politicians rush to protect their economies, the potential impact of the crisis on the least developed countries has received insufficient attention. Failure to support them could have disastrous consequences. Success in doing so could contribute to global recovery. This is the message African leaders are taking to Gordon Brown today, two weeks before he hosts the G20 summit.

Last week I was in east Africa, and I am now in west Africa. It is not hard to understand why African leaders feel aggrieved and anxious. It is deeply unfair that the world's least advantaged may be the biggest casualties of an emergency they had no part in generating. Moreover, it comes as many African countries have achieved progress in growth, human development and governance, despite too many examples of authoritarian and corrupt rule. The last decade has seen inflation and debt going down, while trade and financial reserves have been going up. African economic growth rates have outpaced Europe's, and the numbers living in poverty have decreased.

There is astonishment here at the colossal sums found by industrialised countries to mitigate the impact of the crisis. Bump-starting their economies will be good news for Africa, but the trillions of dollars used dwarf the $100bn a year assigned by OECD nations for development assistance. Honouring aid commitments is a litmus test of the global solidarity being demanded by G20 leaders.

Ignoring the needs of the developing world is grossly unfair and short-sighted. As revenues plummet, governments will struggle to maintain basic services like healthcare and education. The risk of social unrest and political instability is growing. If action is not taken, the consequences will be disastrous for those affected and more costly in the long term.

Investing in Africa's infrastructure and clean energy potential would create jobs, address deficits that constrain growth, provide a basis for food security, and boost regional trade. It would also create business and markets for the world.

At a meeting in Dar es Salaam to discuss the crisis, leaders described how large-scale projects are being put on hold or cancelled as investors fail to mobilise funds. Africa needs - and deserves - its own massive financial intervention. Including it in a co-ordinated global stimulus plan makes sense. The alternative is the prospect of national plans, with the risk of beggar-thy-neighbour fiscal policies and a drift to protectionism.

International financial institutions can be vehicles for stimulus. But an enhanced role for the IMF and World Bank must go hand in hand with reform - in lending practices and in becoming representative and legitimate. Emerging economies such as Brazil and China need governance rights commensurate with their economic weight. And the least developed countries should have a stronger voice at the table.

The G20 summit is an opportunity to reshape the global fiscal and economic architecture in a fairer and more effective way: to commit to practical steps to stimulate economic growth in Africa; and to protect those who may be worst hit by the crisis. Everyone could benefit.

Kofi Annan was secretary general of the United Nations from 1997 to 2006 and chairs the Africa Progress Panel.