Global Crisis hits Developing Nations Hard

The financial and economic crisis that is currently hitting the entire world is now hitting much harder – but the developing countries are the ones that are experiencing the harder blows. The world is now faced with the problem of dealing with the effect of the global recession on these developing nations, according the Group of 24 when they had their meeting last Friday. The Group of 24 or G4 is an organization made of Asian, African and Latin American developing and emerging countries. The group had announced that there were sharp declines in terms of growth and also falling currency reserves. These two factors are the culprit in the rising poverty levels and unemployment.

Considerable Risks Declared

According to the G24 communiqué, there still remains a considerable amount of protracted deterioration for the entire world economy. This was announced right after a meeting that was held at the sidelines of a gathering last spring by the International Monetary Fund or the IMF and the WB or the World Bank. The communiqué had also noted small evidences that this crisis started in some advanced economies and is now affecting the developing economies by way of sharp declines in remittances, exports, global credit crunch and private capital flows. Adib Mayaleh, the G24 chairman as well as central bank governor of Syria, says that it is not wise to put trust in the recovery plans as well as plans for regulation. What is important is that a lot of efforts and several components have to be installed so that this crisis may be finished once and for all.

A Difficult Year for All

Mayaleh continues by saying that this year everyone will face more difficulties compared to the previous year – more so for the developing countries since they were the last to be affected by such a crisis. There are many consequences, and these consequences will have a lasting effect in these developing countries compared to developed countries. The group also mentioned that these developing countries shall need a lot of urgent as well as unprecedented support coming from several global financial institutions such as the World Bank and the International Monetary Fund.

They also welcome the new lending instrument of the International Monetary Fund, which is called the Flexible Credit Line. This Flexible Credit Line has been especially designed for some emerging economies which are showing signs of strong performance. However, they also encourage the institutions to be reformed by way of bold actions as well as a respectful increase in their voting power – especially for the rising economic powers. Besides this, a fairer seat distribution for the International Monetary Fund’s 24-member board (which is currently dominated by many European countries) need to be installed.