Saturday, Brazilian president Luiz Inácio Lula da Silva
urged international finance ministers to give developing countries a greater
role in solving the international economic crisis.
''This is a global crisis and demands global
solutions,'' said Lula in the opening remarks of a meeting of the Group of
20 (G-20), an organization of large industrialized and developing nations. ''The
crisis started in advanced economies. It is a result of the blind belief in the
market's self-regulation capacity and, by and large, of the lack of control of
the activities of financial agents,'' he continued.
Over the course of the two-day meeting in Sao Paulo, officials
are to discuss how the economic crisis has affected each of their respective
countries and how governments can cooperate and give a coordinated response and
effort to resolve the situation. Lula urged the group to come up with ideas for
the ''substantial change of the world's financial architecture,'' due to the
fact that the global credit crash is affecting the poorer countries of the
world.
Lula is pushing along with other developing countries to be
included in the meetings of the largest industrial nations, countries where the
crisis originated. The G-20’s origins are to be found in 1999 during the Asian
financial crisis, but the group’s meetings have not until now included
presidents and prime ministers.
Brazil’s Finance Minister Guido Mantega said on Saturday
that his country would not be “mere coffee drinkers” on the sidelines of the
meetings of larger nations.
According to Jenilee Guebert, a senior researcher with the
G-20 Research Group at the University of Toronto, many developing countries
want more of a voice in the decisions of organizations such as the IMF and the
World Bank.
"Right now, the emerging economies essentially have no
voice within the IMF-World Bank system," she said. "They want to be
included. They want a bigger role in the international system. . . . We live in
a globalized world, and they just feel that seven countries or eight countries
shouldn't be representing the whole world."
Developing economies have been hit by the crisis as
investment funds bailed out to safer economic climates, stock markets
plummeted, and local currencies lost value against the U.S. dollar.
"Many developing countries are moving into a new danger
zone," the World Bank said in a recent paper. "With this latest
financial crisis, growth is slowing and is likely to weaken even more sharply.
Developing-country exports to developed countries are falling, capital is being
withdrawn from emerging markets, and short-term credit is drying up."
Lula’s main concern is the impact of the slump on trade,
namely the rich countries reducing imports. ''Brazil believes countries
must avoid the temptation of resorting to financial and trade protectionism as
a mechanism to overcome the crisis,'' he said.
According to data released last week by the International
Monetary fund economic growth in countries would contract next year for the
first time since WW2.
United States representative at the G-20 David H. McCormick
said in a statement that Lula ''presented a constructive overview of the
challenges we face and the need for developed and developing nations to work
together in addressing those challenges.''