Economic Downturn Threatens Developing Countries

Posted by Christine Welter Mar 13, 2009

There are growing signs that the economic downturn will have a devastating impact on developing countries. As world trade shrinks, private sector investment slows down (DFID, 3/09)

• the flow of cash from foreign companies into developing countries might fall by 80% from $929 billion in 2007 to $165 billion in 2009
• cash sent by foreign workers to their home countries will drop by $20 billion next year
• less demand for export means fewer jobs; 300,000 miners have lost their jobs in the Democratic Republic of Congo

In preparation for the G20 summit in April Douglas Alexander, British Secretary of State for International Development, warned that radical action is needed to protect the world's poorest from the financial crisis. As developed countries adopt new policies and pour money into their own economies, they have to be aware that these measures might have negative effects on developing countries.

US President Barack Obama and UN Secretary General Ban Ki-moon met at the White House earlier this week and called for global coordination to help the world's poorest nations weather the economic crisis.

It is time to focus on trade policies that help build sustainable economies worldwide. A positive outcome of the global economic crisis could be closer coordination and global partnership between nations, as defined in Goal 8 of the United Nations Development Goals.

Sources:

A Trade Agenda for the G 20: MDGs and Deficits in Global Governance