The bigger global crisis

“In London, Washington and Paris, people talk of bonuses or no bonuses. In parts of Africa, South Asia and Latin America, the struggle is for food or no food.”

That was World Bank President Robert Zoellick commenting on disparate agendas at the recent G-20 summit. For all the talk of financial bailouts in hopes of mitigating the global crisis, there exists a tacit qualification that this applies to the top economic engines.

But many nations aren’t developed enough to speak in terms of foregone retirements and failing auto industries. Rather, they grapple with issues like stunted trade, leaving them missing out on the little revenue they might have gotten for food.

And food issues are no small quandary. Recent projections indicate that global food production needs to double by 2050  to feed a surging population, coupled with higher input costs and climate change.

What’s worse, research from the United Nations Food and Agriculture Organization of the  recently indicated that food prices in developing countries have gotten stuck and started diverging from falling world prices.

So now, not only are poor nations dealing with falling jobs, government revenue and employee remittances that are normally associated with a global recession – the expected fall in prices to occur along with the recession has, for the time being, not occurred. How long this “stickiness” will last is unknown – and researchers agree it’s hard to imagine that it will last forever. But for now, it’s leaving families unable to eat.

A recent World Bank best-case scenario statistic predicts that, due to the crisis, an additional 22 children will die per hour in 2009. Non-best-case scenario? That number could double, resulting in an additional 400,000 child deaths.

What can wealthy countries do? Reviewing the final communique from the G-20 summit yields some insight, cryptic or not: “We have committed ... to provide $6 billion additional concessional and flexible finance for the poorest countries over the next two to three years. We call on the IMF to come forward with concrete proposals at the Spring Meetings.”

And when dealing with how to most efficaciously spend this money, the aid debate is already flying with prescriptions ready to hit the ground running. Nobel Prize-winning economist Muhammad Yunus is urging G-20 leaders to create a microfinance initiative, wherein a fund is used to create small loans in hopes of bolstering sustained commerce.

Renowned development economist Jeffrey Sachs emphasizes the importance of consulting policymakers from recipient countries so that development templates are adjusted according to the nuances and specificity of each individual country.

And Zoellick continues pushing a trade support program to help developing nations
sustain trade in times of global recession.

While overshadowed by talks of Wall Street and the U.S. auto industry, there exists a quiet storm of people affected by the crisis – and people wanting to help – that do not reside in G-20 countries.

Thankfully, the influence of development-oriented thinkers like Yunus and Sachs is finally gaining more traction.