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Financial crisis could trigger social unrest, warns UN chief
Santhosh V. Perumal
Gulf
Times
Tuesday, Dec 02, 2008
THE global financial crisis has brought an abrupt end to a long
era of economic growth, and if not handled properly it could result
in social unrest and political instability, according to the United
Nations.
Seeking additional emergency financing from the International
Monetary Fund (IMF) and the central banks of the advanced countries,
the UN Secretary General Ban Ki-moon suggested a six-point agenda
to set the world economy in order.
“If not handled, today’s financial crisis will become
tomorrow’s human crisis. Social unrest and political instability
will grow, exacerbating all other problems,” he said, declaring
open the Follow-up International Conference on Financing for Development
(ARTICLE CONTINUES BELOW)
The ultimate danger would be a cascading series of crises, each
building on the other, with potentially “devastating”
consequences for all, he said.
He welcomed the fiscal and monetary rescue packages and stimulus
plans launched by major economies, but said that probably more
needed to be done since the vast sums committed to bail-out “dwarfed”
overseas development assistance, which remains a crucial pillar
of development finance for many countries.
Elaborating on the six-point agenda, he said there was a need
to address the liquidity needs, especially for the developing
countries.
He said that the wealthiest nations had moved to keep credits
flowing at home, and added that credit flows must be ensured to
developing countries as well.
Their (wealthy nations’) currencies were not reserve currencies;
their foreign reserves, often large, were not sufficient to withstand
the threat coming from today’s crisis, Ban Ki-moon said.
“We, therefore, need additional emergency financing from
the IMF and the central banks of the advanced countries. Without
it, the credit crisis will spread to emerging economies,”
he said.
In this process, growth would stall, hurting them and the world
as a whole, he said.
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