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Africa Seeks Protection From Global Crisis As World Poorest Face 'Disaster'
 
October 2, 2008

Accra, Ghana - The world's poorest states facing a "disastrous" cut in aid and capital flows due to the global banking crisis must not be made to suffer for the mistakes of rich, developed countries, according to ministers.

Ministers from African, Caribbean and Pacific (ACP) countries on Wednesday called on international institutions to shore up funding to the poorest peoples of the planet with the same urgency as the rich world's banks were being bailed out.

Gathering for a summit of the 79-nation ACP group due to start today in Accra, they said they were bracing for the impact of the international financial turmoil on their often-fragile, commodity-exporting economies.

"The consequences for the ACP, especially for small, vulnerable countries, will be disastrous," Arvin Boolell, Mauritius's minister for foreign affairs, regional integration and international trade, said.

"There will be less overseas development assistance money. There will be less obligations on behalf of developed countries to honour their commitments of monetary agreements," he added.

Several ministers cited estimates that flows of funds for emerging markets would drop by 25 percent due to the developed world's banking crisis, which has toppled Wall Street firms, frozen lending among banks and forced the US and European governments to rescue failing banks and companies.

They noted that many ACP countries were already grappling with budgetary shortfalls and pressures caused by sharp rises over the past year of global food and fuel prices.

"We need to take active steps to make sure that developing countries do not disproportionately pay for problems which were not of their creation," Rob Davies, SA's deputy minister for trade and industry, said.

"I would suggest engaging international institutions about what can be done, including the deployment of funding, to ensure that capital flows and aid flows to developing countries are not interrupted."

The ACP ministers noted that the US government had put forward a $700-billion (R5,7-trillion) financial rescue plan to try to restore market confidence, while European central banks were also pumping out billions to try to keep credit flowing.

"They can find the money for this purpose at this moment but apparently not for development," Davies said.
 
 
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