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Reform Is Needed. Reform Is in the Air. We Can't Afford to Fail.

by: Joseph Stiglitz | Visit article original @ The Guardian UK

The financial crisis that began in America's sub-prime mortgage market has now become a global recession - with growth projected to be a negative 1.5%, the worst performance since the Great Depression. Even countries that had done everything right are seeing marked declines in growth rates, and even deep recessions. And much of the most acute pain will be felt by developing countries.

A UN commission of experts on reforms of the international monetary and financial system, which I chair, has just published its preliminary report. It focuses especially on the impact of the crisis on developing countries and the poor everywhere, which is likely to be severe. An estimated 30 million more people will be unemployed in 2009 compared to 2007. The increase could even reach 50 million. Progress in reducing poverty may be halted. The report warns that: "Some 200 million people, mostly in developing economies, could be pushed into poverty if rapid action is not taken to counter the impact of the crisis."

While this is a global crisis, responses are undertaken by national governments, who quite naturally look after their own citizens' interest first. Particularly invidious are protectionist measures, such as the US "buy America" provision in its stimulus package. In fact, the World Bank reports that 17 of the group of 20 countries have engaged in protectionist measures, after making a commitment not to do so in their meeting in Washington in November. By focusing on national, as opposed to global impacts, the global stimulus will be less - and the global recovery weakened.'
Lees verder: http://www.truthout.org/032809Y