Rich nations must live up to their commitments to boost development in poor countries and must guard against protectionism in dealing with the global financial crisis, African economic officials said on Friday. Multilateral lending institutions also needed to be fairer in the treatment of poorer governments trying to increase spending to lift growth.
African Development Bank President Donald Kaberuka told reporters the continent expected the developed world, where the current financial crisis originated, to do everything it could to stimulate world growth.
But this did not mean it should renege on commitments to poor countries. "We want to see the number of commitments made before the crisis respected; on trade, on official development assistance, on climate change, on the voice of African countries in the international discourse," he said at a meeting of African finance ministers to discuss the crisis.
"If Africa's voice is heard, we are able to look for solutions." Growth on the continent has been hard hit by a financial crisis that has pushed many developed economies into recession. Capital flows into Africa are drying up, while tight credit markets, and high lending rates, have put development projects at risk. South African Finance Minister Trevor Manuel said the G8 rich nations were already far behind on aid commitments. Protectionist policies by the developed world and a focus on internal issues could push Africa further into poverty.
"If there is a kind of retreat into themselves and the rest of the world does not matter, and the focus shifts exclusively to their domestic issues, then clearly Africa will be left behind even further," he said.
NOT FAIR: International lenders, including the International Monetary Fund, would not allow African countries to do the same. "That (protectionism) is the default of the rich world, that is not the default of Africa, that is not a recourse that we have. We would be pummelled if we tried to bring in protectionist measures," he said.
Manuel added that poorer countries receiving assistance from the IMF would be punished for boosting spending, and widening budget deficits, while countries, like the United States, could do so without impacting credit ratings. "If you try and emulate the US and run an 11 percent deficit, what do you think the IMF will say to you? So the issue of equity needs to be taken from that perspective; what is sauce for the goose is sauce for the gander," he said.
Major economies, including the US and Europe, have poured billions of dollars into their banking sectors and wider economies to thaw a credit freeze and stimulate growth. Kaberuka said Africa would push for a bigger role within the G 20 group of leading developed and emerging countries to ensure its case was not ignored. "This is a financial crisis, but for us in Africa it is a development crisis, so we are working to see that this broader context is fully understood," he said. "Apart from South Africa, it may not be systemically important (but) the development crisis unfolding on this continent is of interest to the whole world from the viewpoint of equity and poverty."