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.