The global financial crisis: implications for the South

Source: Choike
Civil society organizations from 41 countries, urge G-20 leaders to make concrete progress towards the introduction of an internationally coordinated financial transactions tax (FTT) at the upcoming summit in Seoul. [see more]
The second half of 2008 saw unfold one of the most significant financial crises in history that started in the United States and then spread to Europe, Asia and the rest of the world. The response was just as historic. To stave off regional and global recessions and restore stability and confidence in the market, northern governments are pursuing a massive and unprecedented program of government intervention, nationalizing banks, injecting massive subsidies into ailing institutions and re-regulating their financial sectors.

This response sits in direct contrast to the austere neoliberal policies pressed on developing countries by the World Bank, International Monetary Fund and developed countries for the past thirty years in a complete and unacceptable double standard.

The international financial system, its architecture and its institutions have been completely overwhelmed by the scale of the current financial and economic crisis. The financial system, its architecture and its institutions are being questioned and they need to be completely rethought.

But what are the implications for the South? The crisis has already begun to impact developing countries as their stock markets and currency rates drop, private capital flows are being reduced and large investment projects are cancelled because its ultimate profitability is now in doubt.

The slowdown in the global economy has already compelled many companies to retrench workers and stop hiring. The International Labour Organisation (ILO) forecasts that the crisis will result in the loss of as many as 51 million jobs worldwide, with migrant workers among the most likely to be retrenched.

This unprecedented global financial and economic crisis requires an unprecedented global response. However, the most powerful countries in the world gathered in the G-7, G-8, G-10, or G-20 have been the first to call urgent meetings on the crisis leaving the rest of the international community out of negotiations on international economic and financial reform.

Many developing countries resent being silent victims of the crisis they clearly had no part in creating. Also civil society organizations have come together through different campaigns to demand a major international conference to tackle the crisis, convened by the United Nations and that includes all countries, civil society organizations and other stakeholders.

In the wake of the global financial and economic crisis, the President of the UN General Assembly, Miguel d’Escoto Brockmann, set up a commission of experts chaired by Nobel Prize Laureate Joseph Stiglitz, whose mandate includes putting forward “credible and feasible proposals for reforming the international monetary and financial system in the best interest of the international community”. The Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System will present its final report in early April 2009 including civil society views collected in previous consultations.

The numerous global summits that have taken place so far have addressed the economic crisis as a core issue in the discussions. Whether it is at the International Conference on Financing for Development, the United Nations General Assembly, the G8 meeting, the World Economic Forum in Davos or the World Social Forum in Belém, there is no doubt of the urgent need to come up with a solution for the global crisis of capitalism that addresses the comprehensive range of reforms needed, and fairly allocates their burden.

Sources: Civil society statement against a “Bretton Woods II”, Aldo Caliari, IPS
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Friday, October 22 2010
Civil G20 dialogue - South Korea, 2010
(Source: Choike)
Thursday, November 04 2010
Global financial reforms and developing countries
(Source: Third World Network)

Background documents

Policy response to the global financial crisis: key issues for developing countries (South Centre)

Trade issues crucial for effectively dealing with the global financial crisis (Center of Concern)

Impossible architecture: why the financial structure is not working for the poor (Social Watch)

Bretton Woods II conference FAQs (Eurodad)

Rethinking the international financial system and its architecture (IFIWatchnet)

Implications for the South

Steps out of the global development crisis (Global Policy Forum)

The cost of reserves: developing countries pay the price of global financial instability (Eurodad)

UN report on extreme poverty and human rights (UN)

Social investment is the key (Social Watch)

Wealth for Africa, not from Africa

Which Fund do you want? (Social Watch)

A next debt crisis? ( Jubilee Debt Campaign)

The Voksenaasen Statement (

A new debt crisis? Assessing the impact of the financial crisis on developing countries (Jubilee Debt Campaign)

A new prescription (FrontLine)

"Made in USA" crisis now affecting developing countries says Stiglitz (Third World Network)

The global financial crisis: Lessons and responses from Africa (Pambazuka)

Global crisis is good news for IFIs in Latin America (Americas Policy Program, Center for International Policy (CIP))

The global crisis of capitalism and its impact (Pambazuka)

The global financial crisis and developing countries (Overseas Development Institute)

The financial crisis and the developing world (Third World Network)

Dangerous derivatives at the heart of the financial crisis (Eurodad)

Wait! Do we really want those who got us into the financial crisis to plan our way out? (Center of Concern)

Changing face of global development finance (Halifax Initiative)

The current global financial turmoil and Asian developing countries (Third World Network)

Civil society initiatives

International Civil Society Statement to the G-20 Leaders Summit in Seoul (Choike)

G20 & the IMF: peddling cosmetic changes while hounded by illegitimacy (WWG)

What the G20 Pittsburgh summit needs to do (GCAP)

Statement on the G20 and the financial crisis (AWID)

Put People First (Bretton Woods Project)

Citizens must engage and respond to new global crises (UNDP)

CONCORD statement on Council Conclusions on Supporting developing countries in coping with the crisis (doc) (CONCORD)

Ensuring development in the face of the financial crisis (Social Watch Blog)

Transforming the world in crisis: Prague NGO declaration (Prague global policy institute)

NGOs submit proposals to the UN special commission on global crisis (Choike)

Statement on the G-20 summit on the financial crisis (Casino Crash)

Statement: Financial crisis is the focus of Civil Society Forum in Doha (Social Watch)

Women's statement on financing for development, Doha

People's Statement on the Global Crisis (Institute for Political Economy)

10 measures to fight global recession and bail out the poor (Social Watch)

The UN discusses implications of the financial crisis for development and the international financial system (EURODAD)

IMF head should not evade UN (Choike)

Trade union statement to the "G20 crisis summit” (ITUC)

Bank to the future: El Escorial statement on banks and the financial crisis (BankTrack)

If not now, when?: Three actions the G20 must take now (Oxfam)

Regarding the proposed International Meetings on the financial crisis (UBUNTU)

Global Call to Action to demand a new economic system

UK seminar: A coherent civil society response to the financial crisis (Bretton Woods Project)

Statement on the proposed “Global Summit” to reform the international financial system (Choike)

The global economic crisis: An historic opportunity for transformation (Casino crash blog)

ATTAC’s statement on the financial crisis and democratic alternatives (Attac)

Understanding the crisis

The end of an era (Alliance Sud)

IMF new loans and free trade agreements could hamper anti-crisis measures (Third World Network)

The World Bank, the IFC and the antecedents of the financial crisis (Bretton Woods Project)

UN only legitimate body to reform financial system (SUNS)

The Golgotha of global finance (Agenda Global, La Diaria)

"Free market has created conditions of enormous instability" says Eric Hobsbawm (BBC Radio 4 Today)

Blog: Casino Crash

UNCTAD urges right government action in "crisis of a century" (Third World Network)

Financial crisis: IMF chases its own tail (Bretton Woods Project)

Crisis and employment

Global Employment Trends - January 2010 (International Labour Organization)

Recovering from the crisis: A Global Jobs Pact (International Labour Organization)

Conferences and follow-up

Global financial reforms and developing countries (Third World Network)

Civil G20 dialogue - South Korea, 2010 (Choike)

Clear analysis, but (still) no concrete actions (Allliance Sud)

Clashing views on economic crisis at ECOSOC meeting (Finance and Development Programme - Third World Network (TWN))

Call for "global jobs pact" amidst rising job losses (South-north Development Monitor (SUNS))

Global economic crisis and development - the way forward (IFIs Monitor)

New OECD tax havens list sparks controversy (Eurodad Blog)

UN Commission on financial crisis issues recommendations (Choike)

The G20 and after: questions for Labour (IUF)

UN commission of experts makes recommendations on financial crisis (IFIs Latin American Monitor)

Bretton Woods II conference: limited expectations (Eurodad)

NGOs call for radical reforms as IMF offers new loans (IPS)

The Interactive Panel of the United Nations General Assembly on the Global Financial Crisis (United Nations)

Follow-up International Conference on Financing for Development

Asia-EU summit to address 'financial tsunami' (IPS)

A global summit to reform the international financial system (Bretton Woods Project)

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