Release Date: 05-Jun-2009
Jubilee Australia / Australian Council for International Development
The Hon Kevin Rudd, MP
Prime Minster of Australia
Canberra ACT 2600
Support for upcoming UN High-Level Conference, 24-26 June, on the World Financial and Economic Crisis and its Impact on Development
Dear Prime Minister,
On June 24-26 the United Nations Conference on the World Financial and Economic Crisis and its Impact on Development will take place in New York. We urge you to give this Conference the political weight it deserves by participating yourself, recognizing the Conference as an opportunity to advocate for important reforms of the global financial system.
Your recent article in The Monthly demonstrated aptly the unprecedented global dimensions of this crisis that will hit the more impoverished nations of the South as well as the wealthier countries of the North. The statistics on this, many of which you quote in your article, are compelling: an additional 53 million people living under $2 a day (World Bank estimate); 51 million people are predicted to lose their jobs in 2009 (ILO); shrinking export growth (16.8% in Asia, 12.5% in Africa, and 10% in Latin America). Already, 130-155 million people have been pushed into poverty in 2008 from the food and fuel crises, 70 percent of whom are women. Moreover, the current financial and economic crisis comes in the context of ongoing food, water, climate and energy crises that have exacerbated the burdens and sorrows of the developing world.
The unfolding crisis has shown the need for better and more government involvement in the economy ensuring a new balance between the market and public interest. We commend your strong advocacy of this principle. What you have said with respect to the Australian economy is equally true for the global economy.
We acknowledge the attempt by the G20 Leaders to reach consensus on some immediate measures, and your important role in helping broaden the conversation to this extent. However we believe that the responses proposed by the G20 are not sufficient to address the root causes of what are multiple, linked crises of food security, climate change, financial markets and sustainable development.
As the UN Commission of Experts on Reform of International Finance and Economic Structures, chaired by Professor Joseph Stiglitz, has concluded, many bilateral and multilateral trade agreements contain commitments that circumscribe the ability of countries to respond to the current crisis with appropriate regulatory, structural and macroeconomic reforms and reform packages. Moreover, the development dimension of the WTO Doha Round agenda has been largely lost, with the majority of developing countries projected by the World Bank to be net losers if the current agenda is completed.
Similarly, the majority of funds agreed by the G20 will be facilitated by the International Monetary Fund (IMF), despite the fact the IMF’s past conditionalities on loans, which have included financial deregulation, have created the conditions for this crisis to spread worldwide. Despite some pledges of reform, many new and ongoing IMF programs through which the new funds pledged by the G20 will flow still contain unwarranted pro-cyclical conditionalities. These conditions curtail the policy space available to developing countries, including their ability to invest in health and education, which is essential for increasing economic activity and involving women in the economy.
There can be no recovery from the global economic crisis without a plan involving the developing world. This global crisis needs a global response involving all societies that are affected by it. The UN is a unique forum in which to generate the broad ownership, knowledge and political support required to provide global solutions in the interests of all. The fact that all 192 nations are coming together to forge an agreement at this important time is a great achievement, but an achievement that will only have legitimacy if nations like ours provide the strongest support possible.
We urge you to show leadership by participating in the Conference alongside other heads of state, together with the Parliamentary Secretary for International Development Assistance, and participation of high-level departmental staff. We believe that your participation is appropriate and will be an indication to our region, to the world’s developing and developed countries, as well as to our citizens, that Australia supports global financial reform and work on inclusive recovery from the global economic crisis.
Also, we urge the Australian Government to be a strong voice for reform in the important negotiations currently taking place ahead of the Conference. The Preliminary Report of the Stiglitz Commission lays out a very important reform agenda. The nature of this crisis has opened up opportunities for change that would not have been conceivable even a few months ago. Yet, such transformational change requires leadership and vision from all.
We look forward to Australia making the most of this important opportunity for change.
Adele Webb, National Coordinator Jubilee Australia
Kelly Bruce, Acting Executive Director, ACFID
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