GLOBAL RECESSION TO HAVE LASTING IMPACT ON LATIN AMERICAN ECONOMIES – UN OFFICIAL

Higher unemployment figures, lower economic growth, falling trade and stubborn fiscal deficits are among the lingering effects the global financial crisis will have on Latin American countries, the top United Nations official for the region warned today.

The after-shocks of the global meltdown have infected the region through a sharp decline in remittances, shrinking external demand for goods and services and changes in the relative price of exports, said Alicia Bárcena, Executive Secretary of the UN Economic Commission for Latin America and the Caribbean (ECLAC).

Ms. Bárcena highlighted trade as one of the hardest hit sectors in the region, in her opening address to the 2009 Summer School on Latin American Economies, whose theme is "The Real Impact of the Global Economic Crisis: A Latin American Perspective."

In April, trade was slashed by almost 32 per cent compared to the same month in 2008, with a 29.2 per cent drop in exports and 34.6 per cent decrease in imports during the same period, Ms. Bárcena told the gathering at ECLAC headquarters in Santiago, Chile.

She added that a cut in foreign direct investment of between 35 and 45 per cent is expected this year, while unemployment is estimated to climb to 9 per cent and money sent home by nationals living and working outside the region will fall by some 5 to 10 per cent.

Although there are signs of economic recovery, it will be a slow, gradual process, Ms. Bárcena warned the some 29 post-graduate students from Argentina, Belgium, Bolivia, Canada, Korea, Chile, Ecuador, France, Italy, Mexico and Spain, who will complete the ECLAC seminar on 30 September.

During the economic recession in the 1980s, it took 12 years for economies in the region to recover but as long as 24 years for social indicators to reach their pre-crisis levels, she said, predicting that the future comprises of lower growth in developed countries, more participation of developing countries in global growth and stricter regulations on financial systems.
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Financial Crisis To Leave 'Permanent Scars' On Economies: OECD Secretary-General.

"The current financial crisis is going to leave 'permanent scars' and government leaders must prepare to face new realities such as higher unemployment level and lack of credit, the head of the Organization for Economic Cooperation and Development (OECD) said on Monday [in an interview with Canadian CTV]. OECD Secretary-General Angel Gurria, in Montreal for the 15th annual International Economic Forum of the Americas, said the recession has been so widespread that it will likely bring about new realities...." [Xinhua/Factiva]

AFP adds that "... 'We may find in the future that unemployment remains at a higher level than we had before,' Gurria said.... Moreover, lack of credit and investment, particularly in research and development, will block growth in several countries, he added...." [Agence France Presse/Factiva]

In related news, EFE writes that "...talking about Latin America, Gurria indicated that 'the region is feeling the consequences of a problem that it did not create and a situation that originated in the industrialized countries.'...

He added, 'It is not that the region must change policies but that it needs support so that it can be compensated for the enormous damage it has suffered without guilt. This is the reality for most of the developing countries.'..." [EFE/Factiva]

UN DOWNGRADES ECONOMIC FORECAST FOR 2009; POORER COUNTRIES TO SUFFER MOST

UN DOWNGRADES ECONOMIC FORECAST FOR 2009; POORER COUNTRIES TO SUFFER MOST
New York, May 27 2009 4:00PM
The United Nations has downgraded its economic forecast for 2009, from an already pessimistic estimate made five months ago, and said the poorest countries would be hit the hardest.

"The world economy is expected to shrink by 2.6 per cent in 2009, down from a decline by 0.5 per cent according to the pessimistic scenario of the forecast presented in January," according to a press release on the mid-year report "World Economic Situation and Prospects 2009," by the UN Department of Economic and Social Affairs (<"http://www.un.org/esa/desa/">DESA).

Rob Vos, Director of DESA's Development Policy and Analysis Division, told a news conference in New York, "We are less sanguine than some observers about possible green shoots emerging. If they are there they don't give much sign of being spring time. It is still very wintry landscape."

With its increasing impact both in scope and depth worldwide, the global financial crisis poses a significant threat to world economic and social development, including the fulfilment of the Millennium Development Goals and other internationally agreed development goals, according to DESA.

Although the crisis originated in developed countries, "it is now evident that developing countries are being hit disproportionately hard through capital reversals, rising borrowing costs, collapsing world trade and commodity prices, and subsiding remittance flows," it stated.

During the first quarter of this year, world trade dwindled at a "dramatic" annual rate of more than 40 per cent, with the deepest impact felt by the exporting countries of Asia.

Growth in Africa's gross domestic product (GDP) is expected to slow to 0.9 per cent, down from 4.9 per cent in 2008. South American economies are expected to shrink by almost one per cent on average in 2009, while Mexico and the Central American economies are projected to fall by more than 4 per cent.

The report estimated that between 73 and 105 million more people will remain poor or fall into poverty in comparison with a situation in which pre-crisis growth would have continued.

"Most of this setback will be felt in East and South Asia, with between 56 and 80 million people likely to be affected, of whom about half are in India. The crisis could keep 12 to 16 million more people in poverty in Africa and another 4 million in Latin America and the Caribbean," it said.

The report added that at present the stimulus is very unbalanced. "Eighty per cent of the stimulus is concentrated in developed countries, while most developing countries lack the fiscal space to provide social protection and counteract the consequences of the crisis.

"In a more balanced global response, about $500 billion in additional development finance would be made available for countercyclical responses by developing countries."

The report predicted that with a coordinated, development-oriented policy scenario, the world economy would recover to an annual growth of 4-5 per cent in 2010-2015, led by a robust growth of 7 per cent per year in developing countries. This is in contrast to the uncoordinated scenario in which developing countries would recover at only half that rate," DESA said.
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FINANCIAL CRISIS HIGHLIGHTS NEED TO ACHIEVE DEVELOPMENT GOALS, MIGIRO SAYS

The current financial turmoil that has swept the world provides an impetus to deliver on aid commitments and reach the Millennium Development Goals (MDGs), the eight internationally-agreed anti-poverty targets with a 2015 deadline, Deputy Secretary-General Asha-Rose Migiro has said.

"One might say that aid is a luxury in a time of economic turmoil," she said yesterday at the Montreal Millennium Summit. "But our reaction to the crisis shows just how wrong-headed such thinking would be."

Ms. Migiro stressed in her address that the current crisis reveals that assistance is more crucial than ever, with aid as the only option left for many nations which have seen private financing disappear.

"If we fail to meet our aid commitments, we miss a chance to speed our own economic recovery," she said. "Fiscal stimulus has the biggest impact when it is directed to poor people."

With the midpoint to the MDG deadline having been reached, the Deputy Secretary-General said that even though many challenges remain, there is reason for hope, given the progress that has been made on many fronts, such as education, HIV/AIDS and gender equality.

She pointed out that Rwanda, which is still recovering from the devastating 1994 massacre of over 800,000 ethnic Tutsis and Hutus, is the country with the highest percentage of women in its parliament.

"We must never underestimate the human capacity for change," Ms. Migiro emphasized.

But progress has been too slow in other areas, such as improving maternal health and protecting the environment, she said.

The Deputy Secretary-General said that many developing countries have made great strides, achieving robust growth and even financing their own development, and she urged them to stand by their promises of improving governance and economic systems.

For their part, "donors could do more," she said. Even though "money can't buy development," she underscored that it is impossible to reach development targets with more resources.

While in Montreal, Ms. Migiro also addressed an event on the theme, "Forging a Renewed Partnership for Development," and reiterated the need for global cooperation to meet the MDGs.

"The task of achieving the Goals is too great for any one of us to achieve alone," she said. "We must succeed together."
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GENERAL ASSEMBLY AGREES ON TERMS OF UN SUMMIT ON FINANCIAL CRISIS

The United Nations will convene a global summit in June to assess the impact of the world economic crisis on development, it was announced today, after the General Assembly agreed on the arrangements for the conference.

"In the midst of the most serious economic downturn since the Great Depression, we now have the opportunity and the responsibility to search for solutions that take into account the interests of all nations, the rich and the poor, the large and the small," Assembly President Miguel D'Escoto stated after the 192-member body adopted a resolution on the 1 to 3 June summit.

Mr. D'Escoto has been tasked with organizing the UN Conference on the World Financial and Economic Crisis and its Impact on Development, which was called for by participants at a financing for development meeting held in Qatar in late 2008.

Last month, he travelled to a number of countries to build support for participation at the highest level in the June meeting, and he plans to visit several more in the weeks ahead.

"In agreeing to hold this United Nations conference at the highest level, Member States are recognizing the vital importance of assuring that all nations have an opportunity to participate equally and fully in the common search for solutions that meet the concerns and needs of all countries, large and small," said Mr. D'Escoto.

He stressed that, in this effort, it is vital to draw on "technical expertise and practical wisdom" from all over the world, and from countries at every stage of development, as well as from international organizations, academia, private sector organizations, and civil society.

In addition to the impact of the crisis on development, the conference will also focus on ongoing discussions on reforming and strengthening the international financial and economic system and architecture.

A Commission of Experts appointed by Mr. D'Escoto and chaired by Nobel Laureate Joseph Stiglitz has stated that international finance structures must be drastically overhauled in the face of the current global economic crisis.

The panel, as well as the meeting later this month of the Economic and Social Council with the World Bank, International Monetary Fund (IMF) and World Trade Organisation (WTO), are expected to contribute to the preparations for the June summit.

Mr. D'Escoto will likely circulate a draft outcome text for the summit for negotiation in early May.
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FINANCIAL TURMOIL COULD TRIGGER DEVELOPMENT CATASTROPHE, UN CAUTIONS

As leaders of the Group of 20 (G-20) nations gear up for their meeting tomorrow, the United Nations is warning that the current global economic crisis threatens to unleash a human development catastrophe in the world's poorest nations.

Secretary-General Ban Ki-moon will press participants at the London gathering for urgent collective action to boost development and allow people to keep their faith in their future, spokesperson Michele Montas told reporters today.

Mr. Ban, who held bilateral meetings with Indonesian President Susilo Bambang Yudhoyono and the United Kingdom's Foreign Secretary, David Miliband, is expected to warn the leaders tomorrow that the global recession hurts everyone, but especially the poor, who in some countries spend up to 80 per cent of their incomes on food.

The UN Development Programme (UNDP) has also called on the heads of the G-20 nations to recognize that those most vulnerable to the crisis – which is not exclusive to Europe or the United States – are living outside the spotlight.

Those attending tomorrow's event "should recognize the human development calamity facing the people of the poorest countries and commit the resources to bail them out," said Ad Melkert, UNDP Associate Administrator.

Remittances have slumped, trade has collapsed and commodity prices continue to be volatile, plunging more families into extreme poverty and increasing mortality as a result, UNDP said. A 3 per cent drop in gross domestic product (GDP) for developing countries leads to between 47 and 120 more infant deaths per 1,000 live births.

The crisis is a "matter of life or death for many people in the poorest countries," Mr. Melkert said.

"While the economic recovery may start in 2010, the damage to human development will be severe and social recovery may take us several more years," he noted, adding that the impacts may be felt as far away as 2020.

The official also pointed out that in past recessions, poorer nations have suffered disproportionately compared to their wealthier counterparts, witnessing falls in health and education indicators. Life expectancy, school enrollment and graduation rates all drop, and in low-income countries, women, children and society's poorest segments are most likely to bear the brunt of the economic collapse.

Also warning about the impact of the financial crisis on schooling was Koïchiro Matsuura, Director-General of the UN Educational, Scientific and Cultural Organization (UNESCO), who called for greater investment in education.

According to research, extending the average period spent at school by one year will boost per capita GDP by 4-6 per cent, he said. "By injecting resources into education now, not only would we stimulate economic recovery, but we would also contribute to stronger growth in the future and guarantee global stability in the long term."

For its part, the UN International Fund for Agricultural Development (IFAD) has called on governments to accelerate agricultural development, with the financial downturn pushing millions of people – especially poor rural people – into abject poverty.

"We ignore the world's poor farmers at our peril," said IFAD President Kanayo F. Nwanze. "As we strive to recover from the current turmoil, these farmers can be part of the solution."

Given the necessary support, they can drive economic growth and help the world to avert food crises, like the one that shook the world in 2008, he said.
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UN AGENCY AIMS TO TACKLE HOUSING CRUNCH DURING FINANCIAL CRISIS

With the world struck by an economic crisis that has its origins in housing credit, the head of the United Nations agency tasked with ensuring adequate shelter for all today said it was doubly important to confront the challenge of affordable housing.

"This year, our meeting takes place at a time our world is mired in the worst economic crisis in living memory," Anna Tibaijuka, Executive Director of the UN agency for human settlements (UN-HABITAT), said as she opened the agency's yearly Governing Council in Nairobi, Kenya.

"The origin of the crisis lies with a housing finance system gone wrong. Lessons learned from this experience must inform our housing policies and strategies," she added, outlining how the global financial crisis has affected housing worldwide.

The theme for the Governing Council, at which governments decide on UN-HABITAT's budgets and work programmes, is entitled "Promoting affordable housing finance systems in an urbanizing world in the face of the global financial crisis."

Also speaking at the meeting's opening session, the head of the UN Environment Programme (UNEP), Achim Steiner, called for measures to cushion the urban poor against the shocks arising from both the global economic meltdown and climate change.

The Governing Council, attended by representatives from some 100 countries, runs through 3 April.
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MARKETS ALONE CANNOT PROVIDE ADEQUATE HOUSING FOR ALL, SAYS UN EXPERT

MARKETS ALONE CANNOT PROVIDE ADEQUATE HOUSING FOR ALL, SAYS UN EXPERT
New York, Mar 9 2009 9:00PM

The over-reliance on private home ownership that contributed to the sub-prime mortgage crisis and the subsequent global financial meltdown highlights the need to view housing through the lens of human rights and not just as a commodity, the United Nations independent expert on adequate housing said today.

"While political discussions are ongoing, I believe it is important to consider the linkage of the crisis with human rights, especially to look at the causes of the crisis and avoid repeating the same mistakes in any new national and global agenda," said Special Rapporteur Raquel Rolnik, who presented a report to the Human Rights Council on the financial crisis, its causes and its relation to the right to adequate housing.

"One of the fundamental errors has been to consider housing only as a commodity and an investment asset," she told the 47-member body in Geneva, underscoring that that the provision of adequate housing for all can not be left solely in the hands of private housing and financial capital markets.

As private loans and mortgages were the only option open to most people who needed a place to live, Ms. Rolnik noted that "credits were attributed by the private sector to households that – in normal circumstances – would not be eligible for loans."

As a result, not only did private companies' risk increase, but also "low-income households were made even more vulnerable to economic and financial changes," she added.

In her report, the expert also argued that the reduction in the amount of public housing made available by the State had a significant impact on people in need of affordable accommodation, especially those that could not afford market prices and mortgages.

She noted that rapid increases in the price of housing led to excessive borrowing and the ensuing expansion of the financial system.

"The 'biggest bubble in history' was foreseen, but little or nothing was done by Governments to prevent it," Ms. Rolnik, an architect and urban planner with extensive experience in the area of housing and urban policies, said in a press release.

Since the so-called bubble has burst, the financial crisis has resulted in housing becoming even less affordable for many people around the world, she noted.

"It is a blunt reminder that it is not just the poor, but also low- and increasingly middle-income groups, who find it difficult to raise enough money to buy or rent adequate housing," said Ms. Rolnik.

"I believe that the current crisis represents an opportunity for reflection, and to consider how to improve housing systems, policies and programmes so as to ensure adequate housing to all."
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Global Financial Market Losses $50 Trillion

The global financial crisis slashed the value of financial assets worldwide by $50 trillion last year, a study commissioned by the Asian Development Bank (ADB) said on Monday.

Financial asset losses in developing Asia, which suffered more than other emerging markets, totaled $9.6 trillion, or just over one year's worth of developing Asia's gross domestic product, the study said.

ADB president Haruhiko Kuroda, speaking to delegates at a bank conference where the study was released, said he feared the region's economies would suffer further before they start to bounce back.

'This is by far the most serious crisis to hit the world economy since the Great Depression. While this crisis originated in the US and some European countries, by now no region or country is insulated,' Kuroda said.

According to the ADB study, the figures provide clear proof of the close connections between markets and economies around the world, leaving few, if any, countries immune to financial or economic fallout. A recovery can only now be envisaged for late 2009 or early 2010.

[Kuroda] said the ADB has responded by stepping up access to loans, grants and credit guarantees by several billion dollars from the originally planned $12 billion for 2009, and is asking its shareholders to increase the bank's capital to as much as possible.

World Bank Projects $270-700 Billion Finance Gap For Poor Nations.

"The World Bank said yesterday that 129 developing countries face a financing shortfall of $270 to $700 billion this year in [that includes]debt payments...plugging foreign trade deficits, because private-sector financial institutions are refraining from providing funds in emerging markets amid the global financial turmoil....

The multilateral development bank also projected that global industrial production by the middle of 2009 'could be as much as 15 percent lower than levels in 2008' and that world trade is 'on track in 2009 to record its largest decline in 80 years, with the sharpest losses in East Asia.

According to the NYT, the report says that "...the crisis...was causing havoc for poorer countries that had nothing to do with the original problem. As a result, it said, nations in Latin America, Africa and East Asia have had not only their growth stifled but their access to credit as well...."

The Washington Post adds that "...the report predicted that the global economy will shrink this year for the first time since the 1940s, reducing earlier estimates that emerging markets would propel the world to positive growth.... 'We need to react in real time to a growing crisis that is hurting people in developing countries,' World Bank President Robert Zoellick said in a statement. Action is needed by governments and multilateral lenders 'to avoid social and political unrest,' he said...."

"This global crisis needs a global solution and preventing an economic catastrophe in developing countries is important for global efforts to overcome this crisis."

Zoellick, who in February called for a fund to which each developed country would contribute 0.7 percent of its stimulus package to help poorer countries, urged more investment in safety nets, infrastructure, and small and medium-sized companies.

GREATER EFFORTS MUST BE MADE TO REALIZE EVERY PERSON’S RIGHT TO FOOD – BAN

GREATER EFFORTS MUST BE MADE TO REALIZE EVERY PERSON'S RIGHT TO FOOD – BAN
New York, Mar 5 2009 3:00PM

With the number of hungry people around the world surging amid the current global financial crisis and the effects of climate change, Secretary-General Ban Ki-moon today stressed the need to scale-up efforts to combat hunger and realize every person's right to food.

"Food is not just a commodity, and agriculture is not just a business. Both are central to survival. Realizing every person's right to food is a moral and humanitarian imperative," Mr. Ban told students of the UN International School at a conference on the global food crisis.

The Secretary-General said that the way the world grows, markets and trades food does not protect the poor, and the situation is getting worse. "Between global warming and the financial crisis, the number of hungry people is surging."

Last year saw an unprecedented movement of farmers, community groups, businesses, governments, the UN and development organizations working together to tackle the food crisis, in what Mr. Ban described as "the largest emergency scale-up against hunger and malnutrition in history."

Donors have pledged more aid, and the international community has held a series of emergency meetings, but the main work is in communities and countries, he noted. "That is where we are using food assistance and giving seeds and fertilizers to farmers. That is where we are helping communities adapt to climate change and building roads and storage centres so that produce can get to market."

Nevertheless, the global community needs to do even more this year, Mr. Ban stated.

The UN is moving on two fronts: delivering immediate food and nutrition assistance, and improving longer-term food production and agricultural development. In addition, it is pushing for a fairer world trade system that works for poor people while combating climate change.

The way out of the crisis, he noted, is to tackle the urgent challenges while fixing the underlying problem.

"Hunger is a stain on humanity," he asserted. "The time has come to remove that stain – forever."
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