BRUSSELS (Reuters) - Senior European and U.S. officials said on Friday the G20 summit next month must take steps to help developing nations hit by the economic crisis or run the risk of more poverty and insecurity.
British Prime Minister Gordon Brown’s special representative to the London summit said developing nations had initially been considered relatively immune to the crisis as they did not have developed or liberalised banking sectors.
“Now that it’s become a real economic crisis, it’s hitting them right between the eyes,” Foreign Office Minister Mark Malloch-Brown told the annual Brussels Forum.
“It’s not jobs only that they are losing but in some cases people are being driven into poverty and terrible conditions.”
Malloch-Brown said the summit should help restore economic confidence throughout the world. ”The whole world has got to at some point say there are people in charge here... We’re going to need a real action plan, or we’re going to be in trouble.
“I know there will be a united view between Europeans and the U.S. on this... There is a common view that we have to do something quite significant for them (the poor),” he said.
Anne-Marie Slaughter, director of policy planning at the U.S. State Department, said the rich world needed to help ensure that income in developing countries is maintained.
“It’s the right thing to do and it’s also the prudent and intelligent thing to do from a security point of view.”
Swedish Foreign Minister Carl Bildt said financing huge deficits was soaking up capital and hurting developing nations.
“You can hear this big sucking sound... All of the capital is disappearing, from the Pakistanis, from the Ukrainians, from the Indonesians,” he said. “It’s a question also of an element of global solidarity when it comes to sharing the capital.”
G20 leaders last year agreed in principle to ensure there were more IMF funds available to support emerging economies, while giving them more say in the global financial order.
U.N. Secretary-General Ban Ki-moon told Reuters on Thursday he would press world leaders at the summit to keep their pledges of aid to poor nations, but expressed concern the global crisis would sap their resolve.
Ban said that although he had been encouraged by promises from wealthy countries not to reduce their development assistance, he worried they might not fulfil them.
Malloch-Brown said that because global trade has fallen faster than the global economy as a whole has declined, trade was becoming a major focus for the summit.
“The call for free trade to be protected, for monitoring mechanisms to make sure people don’t backtrack on their trade commitments, to add in trade finance to make sure we can get the wheels of trade going again, that issue is racing up there to join the stimulus and regulation as the big issue,” he said.
Reporting by David Brunnstrom, Editing by Jonathan Wright