27 May 2009

Below is a suggested text for a letter to President Obama, urging him to participate in the UN High Level Conference on the crisis to be held 24-26 June in New York, also highlighting major policy considerations.

The letter was prepared as an initiative by Our World is not for Sale, and is supported by the Global Call to Action against Poverty.

If your organization is interested in supporting this letter, please write to kinda.mohamadieh@annd.org)

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The Honorable Barack Obama
President of the United States
Washington, DC 20500

June -----, 2009
Dear President Obama:

We are writing to urge you to attend the United Nations Conference on the World Financial and Economic Crisis and its Impact on Development that will be held from the 24th to 26th of June 2009 in New York.

We appeal to you to provide the leadership at this important conference needed to ensure that this summit addresses the full causes of the crises devastating the lives and livelihoods of hundreds of millions of people around the world. We appeal to you to provide the leadership needed to ensure that world leaders agree to concrete measures to implement a coordinated, comprehensive and global response to address the causes of the crisis, mitigate its global impact, and establish mechanisms to prevent similar crises in the future.

Around the world, people have been inspired by your message of hope and change. At the heart of the present crisis is a crisis of human security which has shattered peoples’ hope for a better future and fueled despair and fear for what tomorrow may bring.

We agree with you that peace, stability and prosperity are indivisible. In your first congressional address, you stated that: “Now is the time to act boldly and wisely – to not only revive this economy, but to build a new foundation for lasting prosperity.” What you have said with respect to the U.S. economy is equally true for the global economy. Indeed, the destiny of developed and developing countries in an interdependent world and a globalised economy is inextricably linked. This global crisis needs a global response involving all societies that are affected by it.

The drivers of the present financial and economic crisis are complex. While much focus has been given to the bad practices by large financial firms, in fact at issue is the catastrophic failure of existing domestic and global economic policies and governance that has focused on eliminating necessary government regulation and oversight of the economy.

The unfolding crisis has shown the need for better and more government involvement in the economy ensuring a new balance between the market and public interest. We commend your strong advocacy of this principle. In practice, this demands changes to the institutions and rules of global economic governance.

The world had evolved considerably in the past 60 years, and this crisis has shown the urgency for reviewing and reforming the Bretton Woods system.

The majority of funds agreed by the G-20 will be facilitated by the International Monetary Fund (IMF.) Yet, the IMF’s past conditionalities on loans, which have included financial deregulation, have created the conditions for this crisis to spread worldwide. And, despite some pledges of reform, many new and ongoing IMF programmes through which the new funds pledged by the G-20 will flow still contain unwarranted pro-cyclical conditionalities. These IMF conditions curtail the policy space available to developing countries, including their ability to invest in health and education, which are essential for increasing economic activity and involving women in the economy. These measures undermine the likelihood of recovery and needlessly exacerbate the financial, economic and developmental challenges these countries face.

Similarly, existing rules of the World Trade Organization’s Financial Service Agreement implemented lock in the extreme financial service deregulation that is a cause of this crisis. And, these existing WTO rules impose specific barriers to the re-regulation of financial services and in fact legally obligate countries to continue many of the very policies that governments worldwide are now working to reform. As the UN Commission of Experts on Reform of International Finance and Economic Structures, chaired by Joseph Stiglitz, has concluded, many bilateral and multilateral trade agreements contain commitments that circumscribe the ability of countries to respond to the current crisis with appropriate regulatory, structural and macroeconomic reforms and reform packages. Moreover, the development dimension of the WTO Doha Round agenda has been largely lost, with the majority of developing countries projected by the World Bank to be net losers if the current agenda is completed. Yet, the current Doha Round agenda includes further financial service deregulation and liberalization

Developing countries are now bearing the brunt of the crisis, for which they are least responsible. Moreover, the current financial and economic crisis comes in the context of ongoing food, water, climate and energy crises that have exacerbated the burdens and sorrows of the developing world. We believe that the responses proposed by the G20 are not sufficient to address the root causes of what are multiple, linked crises of food, climate, financial markets and sustainable development. And, there can be no recovery from the global economic crisis without a plan involving the developing world.

The nature of this crisis has opened up opportunities for change that would not have been conceivable even a few months ago. Yet, such transformational change requires leadership and vision from all.

In your address to Congress, you told your fellow Americans: “As we stand at this crossroads of history, the eyes of all people in all nations are once again upon us – watching to see what we do with this moment; waiting for us to lead.”

We urge you to join other world leaders at the pending UN summit.

Sincerely,