Some have drawn on a similar call to World Bank President Robert Zoellick -- that leaders should not forget that the poorest people are the hardest hit in times of financial crisis. Zoellick announced this week that the Bank would substantially increase financial support for developing countries. One specific effect expected from the economic turmoil is discussed by economist Dilip Ratha on another World Bank blog. Ratha points out that the economic turmoil will likely have a negative impact on remittances to developing countries.
On his blog, From Poverty to Power, researcher and author Duncan Green wrote this week that when money is tight, “cutting aid is an easy option for rich country governments.” However, Green continues that the savings from lowering such aid are minor, and, “In a crisis, poor countries need more aid, not less. Other sources of money are drying up.”
Similar sentiment is highlighted by Richard Baldwin, an economics professor who runs the discussion site VoxEU.org, which has published an “e-book” of 1,000-word essays from 20 economists stating what they think G-20 leaders “must do to stabilize our economy and fix the financial system.” Baldwin wrote this week on Economist.com’s Free Exchange blog that among the range of views, the economists generally agree on four priorities, including immediately strengthening institutions such as the World Bank and the IMF to help with the crisis in emerging markets.
In the context of East Asia, this week started with the news of China’s massive stimulus plan, which David Dollar wrote about on this blog. The stimulus will help improve infrastructure as well as quality of life in China, Dollar wrote. International Herald Tribune columnist Philip Bowring writes on the Asia Sentinel site that Asian countries with cash reserves should increase lending to developing countries. “The government interventions at national level must be extended to the international arena,” Bowring writes. “That does not mean US-EU-Japan. It means all those countries significantly involved in international trade and investment and particularly those, mostly in Asia, with the greatest collective potential to pull the world out of recession.”
Now it’s your turn. What do you hope will come out of this weekend’s summit? Post your comments here.