Western aid declines, financial bailouts mount

By Thalif Deen

UNITED NATIONS (IPS/GIN) — As the world's poorer nations warn about the gravity of the global financial crisis on their fragile economies, the United Nations has exposed an apparent contradiction by Western donors who cry poverty even while they raise trillions of dollars to rescue their beleaguered financial institutions.
Secretary-General Ban Ki-moon has warned that the current financial meltdown should not be an excuse to slash development aid or marginalize developing nations, specifically the world's 49 least developed countries (LDCs) — ranging from Bhutan and Benin to Sierra Leone and Solomon Islands.
The United Nations Millennium Campaign, which is battling to help eradicate extreme poverty and hunger worldwide, points out that since the inception of overseas development assistance almost 50 years ago, donor countries have given some 2.0 trillion dollars in aid.
And yet over the past year, 18 trillion dollars has been found globally to bail out banks and other financial institutions.
"The stark contrast between the money dispersed to the world's desperately poor after 49 years of painstaking summits and negotiations and the staggering sums found virtually overnight to bail out the creators of the global economic crisis makes it impossible for governments to any longer claim that the world can't find the money to help the 50,000 people who are dying of extreme poverty every day", says Salil Shetty, director of the Millennium Campaign.
The amount of total aid over the past 49 years represents just 11.0 percent of the money found for financial institutions in one year, he added.
Addressing the three-day U.N. summit on the global financial crisis June 24, the secretary-general reinforced the same argument.
The annual aid to the crisis-stricken continent of Africa, he said, was at least 20 billion dollars below the promises made by the leaders of the industrial world in Gleneagles, Scotland back in 2005.
"Surely, if the world can mobilize more than 18 trillion dollars to keep the financial sector afloat, it can find more than 18 billion dollars to keep commitments to Africa," Ban said.
But would it?
The challenge to the industrial world will come up once again at a summit meeting of the G8 countries — the United States, Britain, France, Italy, Germany, Japan, Canada and Russia — in L'Aquila, Italy Jul. 8-10.
"We need clear priorities," Ban told the U.N. summit. "That is why I have just sent a letter to G8 leaders urging concrete commitments and specific action to renew our resolve."
A 16-page outcome document, to be adopted by political leaders Friday, says the evolving crisis, which began within the world's major financial centers, has spread throughout the global economy, causing severe social, political and economic impacts.
"This crisis is negatively affecting all countries, particularly developing countries, and threatening the livelihoods, well-being, and development opportunities of millions of people," the draft says.
The bottom line: millions of people all over the world are losing their jobs, their income, their savings and their homes.
The document specifically says that developing countries, "which did not cause the global economic and financial crisis, are nonetheless severely affected by it."
The Food and Agriculture Organization (FAO) says the economic meltdown has resulted in 100 million more people going hungry, with the total number of the world's starving population reaching over one billion this year.
The World Bank projects a finance gap of up to 700 billion dollars, desperately needed by developing nations, with the possibility of a "lost generation,” resulting in added deaths of 1.5 to 2.8 million infants by 2015.