Brazilian President Calls for Global Solutions

By Eric Blair
19:35, November 9th 2008
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Brazilian President Calls for Global Solutions

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.''



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Tags: Brazil, G20, Lula
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