International Action Called For to Stem Global Meltdown

By webadmin on 09:20 pm Feb 20, 2009
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Berlin. Right across the world on Friday policy makers called for intensified action to rescue countries from the grips of the global economic and financial freeze.

The German government called on Friday for a joint European response to financing problems faced by certain euro-zone partners. In Asia, 13 nations are considering banding together to provide lending relief and currency swaps to the tune of $120 billion to kick-start economies.

And, the UN High Commissioner for Human Rights, Navi Pillay, said on Friday government economic stimulus packages must include provisions for migrant workers, who face the most difficulty in a downturn.

Pillay warned the world financial, economic, and industrial crisis would have a disproportionate impact on the livelihoods of vulnerable and already marginalized groups.

Women, children, disabled people, refugees, and immigrants will find it hardest to find work, afford food and housing, and access water, medical care, and education, Pillay told a special session of the UN Human Rights Council.

“They stand at the front line of hardship and they are most likely to lose their jobs and to lose access to social safety nets and services,” she said.

Governments across the developed world have unveiled multibillion-dollar rescue packages to help struggling industries and protect jobs as a global economic slump, triggered by the US housing market meltdown, worsens.

“States are not relieved of their human-rights obligations in times of crisis,” she said, arguing instead that policies to protect threatened people and groups “must be put in place as matters of both urgency and priority.”

On Friday, a German finance ministry statement said: “In light of widening interest rates for state borrowing in the euro zone, a common approach by the European Union, the European Central Bank and the Eurogroup is needed to discuss measures with countries involved to resolve the trend.”

The Eurogroup is composed of finance ministers from the 16-nation euro zone.

Countries like Greece and Ireland have been forced to offer higher interest rates on their sovereign bonds owing to fears they might default on payments, while others like Germany benefit from much more favorable conditions.

The statement urged countries with budget problems “to send positive signals to markets by strictly consolidating public finances.”

It said that “structural reforms must be carried out to reinforce the competitiveness” of the countries in question.

But the ministry stressed that “we have no doubt regarding the cohesion of the economic union,” following some speculation weaker euro-zone members might choose to abandon the single currency.

German Chancellor Angela Merkel’s spokesman encouraged the news media to “not fuel speculation” on “hypothetical trends” in the EU.

Meanwhile, in Bangkok, Asian finance ministers will consider expanding a currency-swap scheme to $120 billion at a meeting this weekend to help protect their economies from the global economic downturn.

The gathering of the finance chiefs of the 10 members of the Association of Southeast Asian Nations, or Asean, plus Japan, China and South Korea, on the island of Phuket on Sunday will discuss how they can cooperate to help the region get through the crisis.

Most are heavily reliant on demand from the United States and the euro zone, which have both slumped into deep recessions following the financial storm that swept worldwide following the dismantling of Wall Street last October.

“The biggest issue will be the economic problems, and we will discuss ideas and mutual measures to deal with them,” host of the meeting, Thailand Finance Minister Korn Chatikavanij, said.

“We are hoping the meeting will find policies and measures among the group to tackle the problems together,” Korn said.

Last week, Korn said the meeting would discuss raising the size of the fund to $120 billion from $80 billion.

The Asean members, plus Japan, China and South Korea, in May last year pledged to pool bilateral currency swap arrangements under the so-called Chiang Mai Initiative in an $80 billion multilateral fund that could be tapped in emergencies.

Under that agreement, Japan, China and South Korea would provide 80 percent of the funding and Asean countries the rest.

On Thursday, Asian Development Bank President Haruhiko Kuroda encouraged Asian countries to cooperate on foreign-exchange rates and make the currency-swap network more effective, suggesting they should be able to raise the size of the swaps without the need for IMF-mandated reforms.

Exports from Asia have crashed in the past few months as demand fell in developed countries. Japan, Taiwan, South Korea and Singapore have all reported record falls in exports.

Asean groups together Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Reuters, AFP