Resolving economic crisis
The global financial
crisis has opened the eyes of the world economic power houses to
the importance of applying solutions across the spectrum to
encompass Third World countries.
No longer can these Western economies operate in isolation
given the increasing interdependence between economies in a
It is also gratifying to note that the powerful economic
blocs such as the G20 are veering away from its hegemony and are
acting considerately towards the poorer countries.
The new generosity displayed by the IMF to Third World
countries it now transpires, has its genesis in a plea made by
President Mahinda Rajapaksa during the SAARC Summit in April.
This was a time the global economic meltdown was having a
crippling effect on the major economies and was threatening to
strangle the Third World nations.
Addressing the SAARC Foreign Ministers Conference in Colombo,
President Rajapaksa called for a global solution encompassing
both rich and poor countries given the increasing
inter-dependence and sophisticated linkages between the
developed countries and third world economies.
On that occasion, the President advocated new modalities and
innovative approaches to deal with the crisis both regionally
and internationally. This was due to the fact that the global
stimulus packages unveiled were directed at helping only the
economies of the developed countries.
The President told the SAARC Foreign Ministers "let our
collective voices be heard at international financial fora
seeking positive responses from multilateral agencies and
international financial institutions to support our efforts
through special proactive initiatives".
In effect, the President was calling for strong South- South
amalgam to force the developed nations to adopt an inclusive
approach in dealing with the crisis.
It is now evident that the President's forceful advocacy that
a solution should be all encompassing has found resonance where
As reported in our main story yesterday, it was decided at
the April G20 Summit to make recommendations to the IMF to boost
its funding to all countries by US dollars 250 billion as a
multi-prong strategy to contain the global crisis. This decision
was implemented in August and there are already signs of
economic recovery in the form of increased commodity prices and
This may perhaps be a trend that we would be witnessing in
the future where the world economic powers would target their
policies to benefit a collective rather than members of a select
club. The globalized format of emerging structures would leave
no other choice but to force the western economies to come out
of their cocoons and address the crises on a collective basis.
If there is one thing that the global financial crisis has
taught the world economic power houses, it is that they can no
longer afford to act in isolation in their decision making.
Their decisions will have to consider the lesser economies
whose interests are interlinked with theirs, however remote. It
goes without saying that a break in this link or any weak spot
down the line is bound to trigger a collapse of the entire
edifice under the present order. Therefore the economic health
of a third world countries today is paramount for the stability
of the rich nations.
Hence it is vital that these Western economies extend all
assistance to uplift the third world economies which are
intrinsically linked with their own.No extraneous issues such as
human rights should be brought into the equation.
Sri Lanka is hoping for the renewal of her GSP Plus facility
which would boost her exports and stabilize the economy. The EU
should not waver on this and follow the example of the G20 in
giving a breather for poor economies to recover.
For, the Third World countries have now come to be major
players in the new world order and a key factor in the stability
of global financial markets. They can be ignored only to the
cost of the economic superpowers.