The world’s poorest countries had no hand in creating the global economic crisis and yet continue to bear the brunt of its ricochet effects. Despite the G20’s1 pledges and the world’s stock markets’ partial recovery, the working poor in 79 low-income countries2 (LICs) continue to face devastating unemployment and deprivation, a continuing food and fuel crisis, and deteriorating climate conditions. The International Monetary Fund (IMF) and World Bank have begun allocating funds for LICs. The distribution of these funds needs to be more rapid and publically documented.
Recommendations
InterAction’s G8/G20 NGO Coordination Group urges the U.S. government to take a strong leadership role at the June 2010 G8 Muskoka Summit and G20 Toronto Summit. We request that the following recommendations be included in the respective communiqués.
1. By the end of 2011, G20 countries should fully deliver on the $50 billion pledge dedicated to LICs to help mitigate the impact of the global economic crisis with transparent and accountable mechanisms.
• By June 2010 there needs to be on-line quarterly reports on the amounts actually delivered and how they were spent including the proportion of loans versus grants and any conditions imposed on the use of the funds.
• Anti-corruption measures need to ensure the funds reach the intended low-income recipients.
2. International Financial Institutions (IFIs)
• Resources should be in the form of grants or debt relief only, to avoid accumulation of unsustainable debt and stimulating a new debt crisis.
• Developing countries need to be protected from IFI pro-cyclical policies
• IFI governance must be reformed to reflect the changing global economy and allow emerging economies and developing countries to have representation in economic decision-making bodies.
3 need to use innovative mechanisms4 for a rapid disbursement of funds. 5.
3. The G20 needs to ensure that financial institutions and markets are reformed, held publicly accountable, and regulated effectively. The reforms need to include provisions to address the abusive and risky activities of hedge funds, "vulture funds," off-balance sheet transactions, and credit rating firms