This also explains the adamant attitude of the larger threshold countries. Global Monitoring Report 2009: A Development Emergency Washington. Before the Pittsburgh summit, non-governmental organisations wrote to the G-20 that a tax of this kind should be introduced and the income used for development purposes. At the same time the financial crisis had entailed increased pressure on the reform of governance. UN agencies estimate that 1.5 billion people – half the global labour force – will become unemployed, with 500 million thrust back into poverty while 250 million could face famine, reversing all the gains of the past two decades. http://www.intracen.org/docman/PRSR14306.pdf. 2008. In many cases this also causes a sharp fall in the value of their currency, making foreign imports even more expensive. 81It is striking that the Norwegian government has also come out in favour. also Press Release No. URL: http://journals.openedition.org/poldev/144; DOI: https://doi.org/10.4000/poldev.144. Doing a decent job? Switzerland also pledged to provide the IMF with an exceptional, set-period contribution to the stocking up in the amount of CHF 12.5 billion (FDF 2009b). Konzept zur Gleichbehandlung für die Doppelbesteuerungsabkommen. Media Conference. It announced that it would rapidly initiate negotiations for the revision of DTAs with States that wished this. 3) The economic collapse is threatening the world financial system. 3As inconsistent as the recovery pattern is now, there was a similar lack of consistence in the impact of the financial and economic crisis on the individual countries and regions worldwide. The crisis did impact the developing countries, principally via financial flows and through trade. Injecting USD 283 Billion in SDRs into Global Economy, Boosting Reserves. UNESCO Future Forum. http://www.imf.org/external/np/speeches/2009/090409.htm, Swiss Banking. The 12th International Days of Statistics and Economics, Prague, September 6-8, 2018 611 IDENTIFIED ECONOMIC PROBLEMS OF DEVELOPING PEACEKEEPING HOST COUNTRIES … A renewed conflict is imminent. Foreign States would profit from increased tax income from Switzerland but would not have any information on the names of the holders of the assets. Making Finances Work: People First. 19  The UN NGO Liaison Service published a summary of all inputs on the subject. 43  Thus, local banks in Guatemala no longer wanted to grant credits to local producers as they could no longer trust the previously customary guarantee pledges of the major international commercial banks in view of the financial crisis, as explained by the Fonds International de Garantie, Geneva, in discussion with the author. Borrowing abroad became more expensive; investors had become more risk-conscious. 7 May. 2 October 2009. http://blog-imfdirect.imf.org/. Report on the short-term stocking up of IMF funds. 16Finally, there is a threat of regression or at least stagnation in official development assistance (ODA). Geneva. The Least Developed Countries Report 2009: The State and Development Governance. Hamdani, K. 2009. Tax Information Exchange Arrangements. 22  All the conference documentary matter and the programme are posted at: http://www.un.org/ga/econcrisissummit/. 21There is a considerable degree of variation in the initial position of the individual developing countries. Contrary to expectations, criminal dealings or bribery and corruption payments do not account for the greater part of these illicit flows. http://www.eldis.org/cf/rdr/?doc=42397, IDS (Institute of Development Studies). Only in the event of a surveillance mechanism, to be created by the UN, monitoring the effects of the crisis on the poorest, does Jubilee come to a positive response on both counts. It was soon patent that the poorest countries, already depleted by the food and energy crisis, had few possibilities of providing the necessary responses from their own resources. http://www.oecd.org/document/50/0,3343,en_2649_34447_42415922_1_1_1_37413,00.html, OECD. Global Economic Prospects. Tax Justice Brief, May. Ed. Developing countries have made considerable progress in closing the gap with developed countries in terms of school attainment, but recent research has underscored the importance of cognitive skills for economic growth. See: http://www.un.org/ga/president/63/commission/financial_commission.shtml Alliance Sud also took part in this consultation. 42  All Development Committee papers are posted at: http://web.worldbank.org/WBSITE/EXTERNAL/DEVCOMMEXT/0,,menuPK:64060743~pagePK:60000303~piPK:64000842~theSitePK:277473,00.html. See: Etwareea, Ram, Le FMI incapable de se démocratiser. The force of impact on the developing and transition countries became apparent only gradually. 12  Other examples are Korea, Malaysia, the Philippines, Thailand and Vietnam. However, the measures introduced to date largely bypass the needs of the developing countries. Progress report on the actions of the London and Washington G-20 summits. Also under discussion is an expansion on the lines of a monetary union or a monetary stabilisation fund (Ugarteche and Ortiz 2009). As the IMF recommended massive stimulation programmes to the industrialised countries impacted by the crisis, the developing countries accused the IMF of double standards in view of their previous experience with its stringent conditions. An economic commission motion has been submitted instructing the Federal Council to draw up a concept for the equal treatment of OECD and developing countries. 68There is no doubt that one of the consequences of the financial and economic crisis was a shift in power and influence. City, University of London provides funding as a founding partner of The Conversation UK. http://www.financialtaskforce.org/wp-content/uploads/2009/06/Final_CbyC_Report_Published.pdf, Tax Justice Network. Financing can no longer be covered by the present World Bank capital basis. Report from the Government Commission on Capital Flight from Poor Countries. As the First world enjoys endless benefits of integration, the effects of globalization on developing countries are harming economies in different ways. Briefing Paper. The International Labour Organization (ILO) (2008) feared the number of unemployed could rise to some 50 million by the end of 2009. One-third of this went to infrastructure projects in the hope of rapidly increasing employment and generally stimulating the economy. They are under pressure from the international institutions to relax their previous dominance in favour of the increasingly strong emerging countries. from the already resolved extended cooperation in the tax sector under the reform of the IMF and the World Bank. What is most worrying is that the economic crisis is not confined to one country or one region, but is happening across the world. Media Release. 2009a. also http://thefourthpillar.ning.com/, OECD (Organisation for Economic Co-operation and Development). 18 August. And finally, the developing countries emphatically urged the IMF to at last step up the reforms on voting rights and other governance questions. 40  Cf. IMF-Supported Programs Help Countries Weather the Worst of the Global Crisis, Says Internal Review. EED Paper, Evangelischer Entwicklungsdienst EED. The G-20 put itself on the throne, rendering the legitimacy of decisions with global impact questionable.26. At the time this would have raised some USD 15 billion. There were no concrete courses of action in favour of the developing countries; the phraseology remained vague. In April 2008 the Bolivarian Alliance for the Americas group of Latin American States resolved on a joint monetary council, a reference currency for their inter-State trade, a chamber for payment compensation and a reserve fund for trade transactions (Cassen 2008). 79The OECD and G-20 initiative therefore remains insufficient for the developing countries. 2009. But she also calls for bilateral exchange of information, precisely between neighbouring countries. Global Development Finance. Stock market losses also had a sharp impact on countries like Chile, whose pension funds include shares from the industrialised countries. 2The various predictions, particularly for China, India, Brazil, Japan and a few other Asian countries, were optimistic. That weakness will spill over to the outlook for emerging market and developing economies, who are forecast to contract by 2.5 percent as they cope with their own domestic outbreaks of the virus. This process had not been completed by autumn 2009. 2009. 32  See: IMF Overhauls Lending Framework. 29 September. On one hand, it raised the interest on loans; on the other, it took up significantly more funds on the international capital markets. 26A good example of strengthened South-South cooperation is the expansion of the Association of South-East Asian Nations (ASEAN) multilateral credit agreement. Crime and corruption, common scourges of modern societies, top the list of problems cited by publics in emerging and developing nations. The standstill or reverse in remittances was often coupled with a freeze in engagement of foreign labour or even the repatriation of foreign workers.7. Geneva. 26  In this respect Jeffrey Sachs wrote in the Financial Times: America has passed on the baton, September 29 2009. http://www.ft.com. http://www.southcentre.org/, Strauss-Kahn, D. 2009. 30  The WEO is usually published twice a year. http://www.news.admin.ch/message/index.html?lang=de&msg-id=25863, FDF. October. 2009b. 37The G-2025 has clearly assumed the role of coordinating instrument for global economic and financial policy. Voices from the South. And finally, taxation of interest should be expanded, analogous to the agreement with the EU, to cover the developing countries. Poorer countries, whose debts are mainly to western governments, need an immediate moratorium on such debt repayments. Subsequently the World Bank Group raised its total lending activities in the 2009 financial year by 54% compared to the previous year, to some USD 60 billion. In August 2009 it created USD 283 billion new special drawing rights, including USD 110 billion for the developing countries (and USD 20 billion of these for the poorest countries).34 In September the Executive Council permitted the IMF to sell 400 tonnes of gold.35 Further, there were also bilateral contributions by the individual member countries, as called for by the G-20.36 This financing procedure was still in progress in October 2009. It is a fact that the IMF is now bound to implement quota reform and with it the revision of voting rights by January 2011.39 The developing countries would like a shift in voting rights of at least 7% to give them a majority. In the absence of […] How to cope with this issue is a primary element of public economy and political debate. 48The principal concerns included on the one hand the policy counselling of the member countries and financial support, which is to be considerably increased. IDEAS. Moreover, lower fuel prices would help the developing countries, most of who are net importers of energy. Such a capital gains tax contradicts the tendency to improved exchange of information. http://www.taxjustice.net/cms/upload/pdf/Tax_Information_Exchange_Arrangements.pdf, Tax Justice Network. Development Viewpoint No. http://www.globalwitness.org/media_library_get.php/1029/1259681511/illicit_financial_flows_asks_for_g20.pdf. 18Lower State income may also be coupled with sinking export income, as in the case of Côte d’Ivoire, Lesotho and Swaziland where 40-50% of State income derives from customs duties (IMF 2009e). 09.039. 29The same ever-recurring themes run like a red thread through the international initiatives to deal with financial and economic crises, although they may be weighted differently or even run in the opposing direction. 78The fact is, however, that these agreements on the exchange of information on tax affairs exclusively concern transactions between the tax havens and OECD States and not the developing countries. The majority – who work in the informal economy without regular jobs, employment rights or social benefits – have immediately lost their livelihoods, and there are no government safety nets to pay their wages or prevent destitution. In this respect see the issues of the GFSR and the WEO including their IMF regional issues at http://www.imf.org/external/ns/cs.aspx?id=29 and also the World Bank Global Economic Prospects (GEP) and Global Development Finance (GDF). While attention in developed countries has been focused inward on the effects of the pandemic at home and the anticipated exit from lockdown, an economic and health disaster is emerging in developing counties that make up 85% of the world’s population. Each of these havens was examined according to 12 indicators, selected to provide information on the degree of transparency and the spheres of secrecy. Towards the end of 2008 taking up loans by governments and private enterprises in developing countries was virtually at a standstill. Countries with substantial international currency reserves and a low budget deficit, like China, were in a position to do so. But the food, energy and financial crises played a significant role throughout the preparatory phase and had a marked influence on the conference and the resolutions taken. September. 41The international media felt the outcome of this summit was rather disappointing, at least with respect to a new global financial order. Donor States with substantial budget deficits and mounting public debt downgrade the priority of development aid.9 This would exert pressure above all on those developing countries where ODA accounts for a high proportion of incoming capital. 29  Iceland, as first West European country since the 1970s, followed by Ukraine, Hungary, then other Eastern European countries, the Baltic States and Pakistan. Obviously they also see the IMF rather than the UN as the decisive power centre and forum for disputes on global economic issues. 2009b. Outlook for Remittances Flows, 2009-2011: Remittances Expected to Fall by 7-10% in 2009. During the course of the 1950s–1970s, development was predominantly gauged by gains in per capita GNP growth. This also involved an examination of the frequently criticised economic policy conditions for granting loans. The IMF created the flexible credit line as a precautionary measure for countries whose policies are considered good and which post sound macro-economic data. Among the many ills that the less developed countries face, Infrastructure or the lack of it is one of the most prominent factors for poor economic growth. Honorary Research Fellow, City Political Economy Research Centre, City, University of London. Developing countries were hit hard by the financial and economic crisis, although the impact was somewhat delayed. These agreements must, at least, meet the OECD minimum standards for mutual exchange of tax information on request. In particular, the direct interests of the poor countries were, for the most part, not taken into consideration, although the final declaration did mention the necessity of supporting the threshold and developing countries. http://www.imf.org/external/np/sec/pr/2009/pr0953.htm, IMF and World Bank. 21  More than 200 civil society organisations signed a joint document entitled “Civil Society Background Document on the UN Conference on the World Financial and Economic Crisis and Its Impact on Development”, 28 June 2009. 5 September. Some have high international currency reserves, others have a substantial inland market. http://www.insouth.org/index.php?option=com_publicationz2&publicationz2Task=publicationz2Details&publicationz2Id=226&Itemid=94, UNCTAD (United Conference on Trade and Development). The latter is significant because local enterprises in developing countries had encountered increasing difficulties in obtaining trade credits or bank guarantees from the major international banks.43, 65The World Bank channelled its activities through a specially created “Crisis Response Facility”.44 Before the World Economic Forum in Davos in January 2009 World Bank President Robert B. Zoellick had already called for a “vulnerability fund” to which all countries would contribute 0.7% of their economic programme for development policy purposes. They granted loans, participated in enterprises and put up guarantees. South Africa also stepped up its investment and social spending. Social issues are derived from the collision between development, economic a nd natural resources. The International Response to the Global Crisis and the Reform of the International Financial and Aid Architecture. The conditionalities have been simplified and limited (IMF 2009d). 2009. the UN’s role in global economy issues should be kept as small as possible. In Kenya the central bank warned of a fall in exports of flowers. See: UN News Centre, General Assembly President sets up task force to review global financial system, Press Release, 21 October 2008. http://www.un.org/ga/news/news.asp?NewsID=28643. 10  See: Least Developed Countries Suffer Most From Global Trade Slump, International Trade Centre, Press Release, 6 October 2009, Geneva. 2008. Capital Flows to Emerging Market Economies. 47  See: IMF WEO, October 2009, table B21, http://www.imf.org/external/pubs/ft/weo/2009/02/pdf/tblpartb.pdf. 70The industrialised countries have not become impotent. IDA accelerated its processes for the poorest countries to receive their funds more rapidly. October. 55The Swiss Council of States approved the credit at its 2009 summer session (Official Bulletin 2009). IMF aid granted to the 15 countries which applied for credit in the past few months was successful (IMF 2009c).37 In the poorest countries the IMF commitment had helped to make way for effective programmes. N. Woods (2009) did acknowledge IMF efforts for increased inflows of funds. Poorer economic prospects kept investment plans down. Washington. 23  Ambassador Martin Dahinden, Director of the Swiss Agency for Development and Cooperation (SDC), declared that he was satisfied with the outcome and promised not to reduce Swiss aid. This time developing countries are the victims of the crisis, but they did not cause it. 2009b. 09/94 29 July 2009. http://www.imf.org/external/np/sec/pr/2009/pr0953.htm. Cf. By under-invoicing or over-invoicing, book profits and losses can be shunted around virtually at will. So it was all the more surprising that Federal Councillor Micheline Calmy-Rey took up the aid organisations’ idea at the UN conference on financing development at Doha at the end of 2008 and declared Switzerland’s readiness, along with other interested countries, to tax the assets from developing countries deposited with Swiss banks, analogous to the interest taxation agreement with the EU, and to direct the income back to the developing countries. http://library.fes.de/pdf-files/iez/global/06444.pdf, Morais de Sa e Silva, M. 2009. In October 2008 several countries had to apply to the IMF for aid.29 Suddenly the question arose of whether the IMF would have enough resources if it were confronted with numerous large-scale applications for loans due to the financial crisis. The closer the developing countries are interconnected with the world economy, the crasser the effects. The World Bank also published numerous studies and reviews.45, 66Non-governmental organisations recognised the distinct advocate’s role of the World Bank and its will to help as rapidly as possible. As agriculturists are illiterate and backward, rapid economic progress may not be possible. Developing countries have also increased their cooperation with one another and are urgently demanding a greater voice in global economic affairs.The industrialised countries are for the most part more concerned with their own problems. PIN No. These are posted at: http://www.imf.org/external/ns/cs.aspx?id=29. Preliminary Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System. In the process of economic growth, countries change what they do. The aid organisation added critically that, however, this would be for the most part in the form of loans and not gifts. Outcome of the Conference on the World Financial and Economic Crisis and Its Impact on Development. 41  Cf. http://www.taxjustice.net/cms/upload/pdf/Country-by-country_reporting_-_080322.pdf, Tax Justice Network. 64The World Bank subsidiaries Multilateral Investment Guarantee Agency (MIGA) and International Finance Corporation (IFC), responsible for the direct support of the private sector, also stepped up their activities. 2009. Four specialised non-governmental organisations demanded six immediate and trenchant measures by letter to the G-20 (Global Witness et al. http://www.gfip.org/storage/gfip/documents/executive - final version 05-14-09.pdf. The Tax Justice Network (2009) has set out in detail why the exchange of information on request is not sufficient, why an automatic exchange of information is necessary and why multilateral rules are essential, precisely for developing countries. June. ILO (International Labour Organization). DC2009-0010 29 September. 5  One example was the planned takeover of a South African mining conglomerate by Xstrata (Zug). OECD presents a review of its efforts in the struggle against tax evasion in an informative brochure published in October 2009. In contrast, various comments on the results with respect to the development aspects were cautiously optimistic. G-20 summit on financial markets and the world economy. The financial and economic crisis of the industrialised States spread to the developing countries primarily via financial flows and through trade. Non-governmental organisations throughout the world played an active part in these discussions and published numerous documents. Trade and Development Report 2009: Responding to the Global Crisis: Climate Change Mitigation and Development. By and large, most of the developing nations have agrarian economy. 2009. They have strengthened their (regional) cooperation with one another. The banks’ newly built-up defence for banking secrecy does not appear to be appropriate for a prolonged defensive battle. According to the latest estimates, between USD 800 and 1,000 billion of illicit flows are leaving the developing countries (Global Financial Integrity 2009). The document recognised the necessity of political leeway for the developing countries, though without going into the conditionality issue. 16  International Conference to Review the Implementation of the Monterrey Consensus, held in Doha, Qatar, from 29 November to 2 December 2008. Regarding foreign direct investment (FDI) in the developing countries, the United Nations Conference on Trade and Development (UNCTAD) posted a weak growth of 7% on a sinking curve for 2008. Globalization is not very rosy for developing countries. In the IMF July 2008 update of the Global Financial Stability Report (IMF GFSR)2 the IMF, for its part, registered a weakening of growth in the threshold countries and a heightened risk of inflation. Digression: the Swiss financial centre under pressure. http://www.parlament.ch/ab/frameset/d/s/4809/298822/d_s_4809_298822_298921.htm, Ortiz, I. 2 March. The OECD standard should also apply for developing countries. 4The crisis originated in the major financial centres in the developed countries. Almost all the developing countries suffer from large-scale hidden and partial unemployment exacerbated by an increase in population due to the decrease in child … From London to Pittsburgh: assessing G-20 action for developing countries. In July 2009 Bangladesh exported 10% less than in the same month the previous year. The EU wants data, not money. IMF. 4 September. And with this, the industrialised countries have taken the changed global economic power structure into account. World Economic Outlook. South-South Cooperation in Times of Global Economic Crisis. 45Eurodad (2009), the European Network on Debt and Development, acknowledges that more progress has been achieved in comparison to previous G-7 summits. 35In the meantime the G-20 had already established facts at the summit in London (see below). 31The UN claimed an important role for itself at a very early juncture. However, effective payments tended to lag behind the approvals. 46  An extensive compendium of such opinions is posted under Eurodad, International Financial Institutions. http://web.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/GEPEXT/0,,contentMDK:21021075~menuPK:51087945~pagePK:51087946~piPK:51087916~theSitePK:538110,00.html, World Bank GMR. September. Most predictions are still cautious. Assessing the Impact of the Current Financial and Economic Crisis on Global DFI Flows. At all events, the impact of the crisis on the poor countries did not hit the headlines the way bank bailouts and toxic securities did. Many of them have not yet been brought into operation. The UN, IMF, World Bank and other international organisations have also endeavoured to support the developing countries. 50  Cf. The annual meeting in Istanbul in early October 2009 even adopted the optimistic slogan: “Road to global recovery”. In the previous year they had still amounted to nearly USD 1,160 billion (see table 1). The cost of all these measures could be US$2.5 trillion – although this is just a fraction of the huge amount rich countries are already spending on reviving their own economies. Compared with their growth potential, the developing and threshold countries are therefore harder hit by the global financial and economic crisis than the industrialised countries that caused it. The timing of the conference proved unfortunate. The developing countries and international organisations took a number of steps to mitigate the effects of the crisis, but with varying results. 2  All IMF GFSRs can be found at: http://www.imf.org/external/pubs/ft/GFSR/index.htm. Those with France and Turkey, also originally negotiated on the old model without exchange of information even for tax evasion, were, in contrast, referred back for reworking. 77Most talked about were the black and grey lists drawn up by the G-20 in conjunction with OECD. 42The strengthened position of the IMF was rated more critically by the developing countries and the aid organisations. See: Swissinfo, Finanzkrise: Schweiz mit UNO-Konferenz zufrieden, June 2009.http://www.swissinfo.ch. The withdrawal of foreign capital led to devaluation of currencies in the developing countries. For many developing countries, however, these money policy measures are strictly limited because easement in interest policy impacts the exchange rate of their currency and the rate of inflation. Switzerland is off the OECD “grey list”. Another group of the agreements assures administrative aid only in the event of tax fraud. The G-20 represents 85% of the world GDP, but 2.6 billion (for the most part impoverished) people and 172 countries are excluded. faster rate than in the 2008 global financial crisis, shrink faster than at any time since World War II. Geneva and New York. Bird, Graham (1995), IMF Lending to Developing Countries: Issues and Evidence, Routledge. P. Chowla (2009) also sees a restricted development potential in IMF resources. Six months later the World Bank predicted that the number of poor would rise further in half the developing countries. 17. http://www.g24.org/pbno47.pdf, Christian Aid. It set up a special commission whose report on capital flight from the poor countries was published in June 2009 (Commission on Capital Flight from Developing Countries 2009). 30The primary actors for development policy debates were the UN and certain of their special organisations, the Bretton Woods institutions, the EU and the regional development banks. Press Release No. Washington. Steve Schifferes does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment. Towards a Renewed Debt Crisis? International Development Policy is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. 20  The programme, background documents (including papers by the IMF, World Bank and UNCTAD) and statements issued by the Conference on the Interactive Thematic Dialogue of the UN General Assembly on the World Financial and Economic Crisis and Its Impact on Development, 25-27 March 2009, can be found at: http://www.un.org/ga/president/63/interactive/worldfinancialcrisis.shtml. 11897, National Bureau of Economic Research, Cambridge: MA. Three more have been negotiated but have not yet been signed. http://www.financialsecrecyindex.com. 39The G-20 summit in Washington in mid-November 2008 was the first held at heads of State and government level. March. 6 May. The motion was not discussed seriously either in Pittsburgh or in Istanbul.