The world is focused on the financial crisis due to its sheer scope and because it embodies the sanction of decades of generalized speculation, uncontrolled debt, and blind deregulation in a mad race for wealth. The result is the current dramatic injustice. The poorest, those who are a real economy’s lifeblood, are the hardest hit by the crumpling of the virtual economy. Confronted with the global crisis, a crisis of meaning and ethics, Europe, as it should, has taken the necessary steps in order to demand during the G-20 Summit true reforms at the global level and not mere cosmetic touch-ups for a system on its last legs.
The G-20 however will not be able to see things through if it does not take clear, fair, forceful measures to save the poorest nations from the crisis. Even more so than for other nations, the trap is closing in around them. They import almost everything and export almost nothing. Their workers are having a harder and harder time finding work abroad. Certain countries have only a handful of months of imports left… In today’s context, nobody wants to sell to the poorest anymore, and when they do, it is at grossly unfair prices. The World Bank estimates that 44 million people are threatened with malnutrition due to the crisis and the hike in food prices. This is a tragic regression. Angola, a country that does have abundant raw materials and resources, will witness a 20% drop in its GDP this year alone. The deep recession that destroys everything has hit Africa, the Caribbean, parts of South and Southeast Asia the hardest. In many countries, colossal public deficit is worsening. Many States are on the verge of bankruptcy. This will further destabilize an already fragile world system. Doing nothing now will plunge the most vulnerable countries into economic disaster. It would allow a horrendous feeling of neglect and injustice to well up, irreparably feeding immigration of despair, profound misunderstandings, and also extreme violence on a planetary level.
One of the G20’s top priorities must be helping the poorest countries. I am here today to plead for three immediate courses of actions:
- ensure that at least 1% of reflation spending be dedicated to a special fund for poor countries hit by the crisis. The World Bank has been fighting to obtain a mere 0.7% for months now;
- reserve 10% of the approximately 600 billion dollars (451 billion Euros) dedicated to funding IMF’s programs and use it to reduce public debt for poor countries. Without this financing, we will never reach the Millennium objectives. Eradicating poverty, large-scale epidemics, and famine will be delayed by dozens of years.
- ensure a five year sanctuary for development funds already voted by the G20 countries. We must keep our word for all of our commitments, at all costs.
Above and beyond these emergency measures, we also need to become a part of the reform process of the world’s financial system, to create and implement innovative, new financing for development. France has shown the way. Air travel ticket contributions have proved their feasibility and efficiency in bringing new means to the fight against AIDS, malaria, and tuberculosis. Plans to save failing banks have also shown we know how to be imaginative and find considerable means when we want to. This is not the time to wait, we must not remain walled in by preconceived ideas and egotism.
We must, of course, stabilize our markets, rebuild our industries, and revive world exchanges on different bases. The rest of the world depends on our prosperity.
But let us not once again write off poor countries otherwise, History will brutally punish such thoughtlessness and blind delusion.
Former French President
President of the Fondation Chirac