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15 Nov 2008 06:00
In the storm of worldwide economic meltdown it is the poorest who have the most to lose. The progress of poor countries towards the Millennium Development Goals risks being swept away by reductions in social spending because of the global recession.
This weekend leaders from 20 nations, the European Commission, the International Monetary Fund (IMF) and the World Bank will gather at an emergency G20 meeting in Washington to discuss the global financial crisis.
Some have dubbed the meeting Bretton Woods II, as it is expected to change international financing institutions as we know them.
While G20 nations look to see how they can cushion the effects of the fallout in their own economies, we must consider the world’s poorest. Cuts in aid and trade will have a devastating effect on development.
Teachers and nurses are not a luxury choice item. A good education and good health are basic human rights. Investing in education is essential for the growth of individual assets and national economies. A single year of schooling can increase a girl’s future income by 10% to 20%.
Education also results in healthier, better-informed individuals—and women’s education results in healthier families and reduced malnutrition. Education also lessens the impact of HIV/Aids: infection rates are double among young people who do not finish primary school.
Despite the obvious necessity to invest in education, this social spend has been threatened by the IMF in the past few decades. The IMF’s power to determine credit-worthiness and conditions related to loans have had a crippling effect on development and the chance of a decent livelihood for millions of people around the world. To meet IMF conditions governments have been forced to reduce spending on education in a number of ways, including reducing the number of teachers, freezing teacher salaries and recruiting unqualified teachers.
This has gone against the grain of education in recent years: 40-million more children now have the chance to go to school after primary school user fees were abolished in many countries, including Kenya, Tanzania, Uganda and Burundi.
While the world’s richest and middle-income countries are now encouraged to spend their way out of the economic crisis, the poorest have no such liberty, and the global cuts in aid and trade are set to further exacerbate global inequalities.
This weekend’s meeting must see world leaders honour current aid commitments and adopt a package that assists the world’s poorest. A package of debt relief and emergency loans should be made available to the poorest countries—but without the usual IMF conditions and macroeconomic controls.
Rich countries have contradicted themselves and rejected many of these policies during the recent financial crisis—for example the European Union budget deficit targets have been set aside to allow increased social spending. The IMF must allow poorer countries the same choice of increasing, not decreasing, social spending.
Given the origin of the crisis in poor regulation and greed within the banking sector in the richest countries, it is vital we do not see double standards in the stabilisation packages.
Now more than ever South Africa and others must be champions of change. The G20 is a welcome change from the exclusive club of the G8 in the hope of sorting out this financial crisis. It’s vital that South Africa takes full advantage of a seat at the table. Any changes made to the IMF and international institutions must correct previous mistakes that have limited development and must go further to protect the world’s poorest economies from suffering the most.
Alex Kent is the campaigns and communication coordinator for the Global Campaign for Education
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