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No pot of gold at the end of the IMF rainbow

At this weekend's IMF and World Bank spring meetings, Global ministers warned that the economic crisis risks derailing the MDGs and, in the closing communiqué, "urged donors to accelerate delivery of commitments to increase aid, and for us all to consider going beyond existing commitments."  But, in the end, they did very little to provide immediate relief to the world's poorest.

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The G-20 Plan for the World’s Poor

Section 25 of the G-20 outcome document deals with bottom billion.

Ensuring a fair and sustainable recovery for all

25. We are determined not only to restore growth but to lay the foundation for a fair and sustainable world economy. We recognise that the current crisis has a disproportionate impact on the vulnerable in the poorest countries and recognise our collective responsibility to mitigate the social impact of the crisis to minimise long-lasting damage to global potential. To this end:

 * we reaffirm our historic commitment to meeting the Millennium Development Goals and to achieving our respective ODA pledges, including commitments on Aid for Trade, debt relief, and the Gleneagles commitments, especially to sub-Saharan Africa;

*the actions and decisions we have taken today will provide $50 billion to support social protection, boost trade and safeguard development in low income countries, as part of the significant increase in crisis support for these and other developing countries and emerging markets;

  * we are making available resources for social protection for the poorest countries, including through investing in long-term food security and through voluntary bilateral contributions to the World Bank’s Vulnerability Framework, including the Infrastructure Crisis Facility, and the Rapid Social Response Fund;

  * we have committed, consistent with the new income model, that additional resources from agreed sales of IMF gold will be used, together with surplus income, to provide $6 billion additional concessional and flexible finance for the poorest countries over the next 2 to 3 years. We call on the IMF to come forward with concrete proposals at the Spring Meetings;

 * we have agreed to review the flexibility of the Debt Sustainability Framework and call on the IMF and World Bank to report to the IMFC and Development Committee at the Annual Meetings; and

* we call on the UN, working with other global institutions, to establish an effective mechanism to monitor the impact of the crisis on the poorest and most vulnerable.

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A Wholly Different Perspective on the G-20 Meeting

The Financial Times published the leaked G20 draft communiqué yesterday in advance of the summit’s Thursday meeting in London. According (pdf) the UN Millennium Campaign, “the global economic crisis threatens to reduce development assistance by at least $4.5 billion as a result of contractions in Gross National Income, force more than 50 million more people to live in poverty and set back the fight against poverty by up to three years. Already, more than 130 million people were pushed into extreme poverty as the result of soaring food and fuel prices in 2008. This is particularly cruel and unjust given that the crisis is of the rich world’s making.” As far as the developing world and the United Nations are concerned, the communiqué reconfirms the commitment of the G20 countries to the Millennium Development Goals and promises an unspecified amount of money for "social protection" for the poorest countries.
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No Compromise on MDGs

The Secretary-General is ready to remind leaders of the G-20 nations at their coming summit who is really suffering from the financial crisis. And he's not planning on letting them fudge the deadline for the Millenium Development Goals (MDGs), the bold development initiatives set in 2000.
Ban said: "We cannot move this target date. 2015 is the deadline and target. We must be able to keep the target."
You tell 'em, Ban. The problem, of course, is that it is not the G-20 countries that are most struggling to uphold their commitments to reducing poverty, promoting good governance, eradicating disease, and fulfilling the other prerogatives of the MDGs. The countries that are behind in their 2015 targets won't be represented at the April 2 London meeting, which is perhaps why Ban feels the need to so strongly campaign on their behalf. The wealth of the G-20 countries, however, will inevitably have to play a crucial role in helping developing nations meet their targets. Pushing for a hard and fast 2015 deadline, even if it looks improbable that all of the goals will be met by then, is the best option here, for acting too audaciously will certainly prove less harmful to the world's poor than acting not audaciously enough.
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Two Very Smart People Discuss How to End Poverty

A fascinating diavlog between the famed (and controversial) utilitarian bio-ethicist Peter Singer and libertarian-minded economist Tyler Cowen. Singer has a new book about philanthropy, which is the ostensible topic of this diavlog. In the excerpt below, the duo debate aid-effectiveness and ways to reduce poverty. At the very end, Singer gives a nod to the Paul Collier, The Bottom Billion author. As regular readers are no doubt aware, a couple of weeks ago Collier released a new report for the United Nations Industrial Development Agency. Having read the report, I think that Collier would argue that the biggest impact poverty reduction projects and policies are those that help countries to expand their manufacturing base. Manufacturing exports, says Collier, can do more to help countries trapped in endemic poverty than natural resource extraction or farming exports -- and certainly more than aid alone. Collier fans out there should definitely make Bottom Billion Blog a regular stop. In the meantime, watch the entire diavlog. This is just one snippet of a fascinating, hour long exchange.
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Annan: Aid to Africa Makes Sense

Former Secretary-General Kofi Annan sends a "message from Africa," in advance of April's G-20 summit: the global financial crisis is hitting poor African economies the hardest, so they're the ones that most need a stimulus package:
Ignoring the needs of the developing world is grossly unfair and short-sighted. As revenues plummet, governments will struggle to maintain basic services like healthcare and education. The risk of social unrest and political instability is growing. If action is not taken, the consequences will be disastrous for those affected and more costly in the long term. Investing in Africa's infrastructure and clean energy potential would create jobs, address deficits that constrain growth, provide a basis for food security, and boost regional trade. It would also create business and markets for the world. At a meeting in Dar es Salaam to discuss the crisis, leaders described how large-scale projects are being put on hold or cancelled as investors fail to mobilise funds. Africa needs - and deserves - its own massive financial intervention. Including it in a co-ordinated global stimulus plan makes sense. The alternative is the prospect of national plans, with the risk of beggar-thy-neighbour fiscal policies and a drift to protectionism. [emphasis mine]
Annan's points are in service of what may appear a counter-intuitive argument: it's exactly now, when it seems that wealthy countries are least able to support developing economies, that it is most crucial for them to do so. When you consider how badly some of these economies have been hit, and how they have the potential to drag down the world market, this argument doesn't even seem counter-intuitive anymore.
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From Whence to Fight Global Poverty?

The Cable passes on the news of Lael Brainard's upcoming nomination to become under secretary of the Treasury for international affairs. Previously, she was tapped to join the State Department in a top economic role. While I confess ignorance as to the specific bureaucratic distinctions between the two jobs, I can't help but feel a twinge of remorse for her absence from Foggy Bottom. Brainard's appointment to any branch of the government should unquestionably be seen as a good thing for proponents of global development, but I was encouraged to see someone who has so consistently articulated the links between national security, U.S. foreign assistance, and poverty reduction headed to the department that concerns itself with global diplomacy. State's loss is Treasury's gain, I guess.
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More Bad News

More bad news on the state of the global economy. According to a World Bank study prepared for next Saturday’s meeting of the Group of 20 finance ministers and central bank governors in London:
The global economy is likely to shrink this year for the first time since World War Two, with growth at least 5 percentage points below potential. World Bank forecasts show that global industrial production by the middle of 2009 could be as much as 15 percent lower than levels in 2008. World trade is on track in 2009 to record its largest decline in 80 years, with the sharpest losses in East Asia.
This is especially troubling for those least responsible for the crisis -- the extreme poor. The study goes on to warn of financing shortfalls of anywhere between $270-700 billion as commodity prices continue to decline, global trade collapses, trade finance and private capital flows dry up and remittances drop. The poorest countries lack the social safety nets to deal with the crisis and are becoming increasingly dependent on overseas development assistance.
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Industrial Strength! Some Advice from Paul Collier and Co.

I’m just back from a briefing with economists Paul Collier (of Bottom Billion fame) and John Page of Brookings. The duo recently co-authored a report for the United Nations Industrial Development Organization (UNIDO) called “Breaking in and Moving Up: New Industrial Challenges for the Bottom Billion and the Middle Income Countries.” For fans of Collier (and I count myself as one) the report offers a follow-up to one of the key arguments of the Bottom Billion: that a robust manufacturing sector is critical to lifting least developed countries out of their poverty trap. Accordingly, the authors write that we should eschew “least developed countries” from our lexicon and instead refer to the world's poorest countries as “least developed manufacturing countries.” Why manufacturing?