Developing nations appeal for aid to battle recession

Jun 26, 2009, 19:06 GMT

New York - Developing countries were on Friday wrapping up their third and final day of debates on the global economic crisis with more appeals for over 1 trillion dollars in stimulus packages to fight off the worldwide recession.

The United Nations General Assembly planned to end the session with the adoption by consensus of a document supporting demands for stimulus packages for poor economies after hearing more than 140 government leaders, poor and rich.

Brazil's Foreign Minister Celso Amorim, whose country's emerging economy appeared brighter than that of many other developing nations, said the UN debate had brought together the world to deal with the recession.

'The fact that we have been able to agree on (a) balanced and ambitious outcome document is a testament to the vitality of the UN,' Amorin. 'It has disproved many of the skeptics.'

G20 member Turkey urged the group to deliver on its promise to make available over 1 trillion dollars to the poor. The group of the world's 20 richest nations is scheduled to meet in September in Pittsburgh to further discuss the stimulus packages.

Envoys from the Pacific small island states said in a joint statement that they were grappling with both the economic downturn and the effects of climate change.

The group said it has experienced a significant drop in export demands from customers in the West. 'Our trade balance and official foreign reserve levels will also be negatively affected, compromising our ability to weather economic fluctuations in the future,' the group said.

The 15-page outcome document reflects some demands of developing countries as well as least-developed countries. But on some issues, developed countries have won, for example in their rejection of a proposal to impose new regulations on world finance.

The document blamed rich countries for causing the recession, while the real victims have been poor countries. It called on wealthy nations to provide additional funding in the form of stimulus seen in the United States and some European nations.

The UN has predicted a fall of 2.6 per cent in the world gross product in 2009, the first such decline since World War II, threatening 'calamitous human and development consequences.'

The document urged creditors to honour their commitments to debt relief, but also for debtors to show a sense of responsibility.

It called for increasing the global liquidity to help overcome the financial crisis, and underlined the urgent need for the implementation of the first step - an allocation of 250 billion special drawing rights (SDR) for poor countries.

The arrangement allows the recipients to convert the SDR to one of the currencies approved by the International Monetary Fund (IMF), which is responsible for the SDR basket.

Reforms of the IMF and World Bank that allow more developing economies to the decision-making table are seen as key to the success of the proposals, as is strengthening the United Nations system.