G-77 expresses concern over crisis in Southeast Asia

WASHINGTON, May (IPS) - The Group of 77 has expressed concern over the recent financial crisis sweeping across Southeast Asia, particularly its adverse impact on the economic stability, growth, trade and development prospects of the developing countries in the region.

“We are convinced that strengthened regional and multilateral cooperation has a central role to play in maintaining financial stability and preventing such a negative impact on growth and development,” Ambassador Makarim Wibisono of Indonesia said.

Speaking on behalf of 132 developing nations, the chairman of the G-77 told a meeting of the Group of 24 in Washington that it is essential to ensure the transparency of capital flows, the strengthening of the early warning system and the improvement of crisis management so as to mitigate the adverse effects of the financial crisis.

In this context, he said, the G-77 strongly supports the final declaration adopted at the Special Ministerial Meeting of the Group of 24 in Caracas in February.

“The Group of 77 stresses the need for a strong commitment by the international community to provide adequate and additional resources in order to contribute effectively to accelerating sustained economic growth in developing countries,” he said.

The G-77 therefore strongly support the convening of an international conference on financing for development under the auspices of the United Nations. “We look forward to work very closely with the G-24 on this issue,” he added.

The G-77 chairman called for a strengthening of the role of the IMF and the World Bank so as to ensure that the economic policies of the more powerful economies would not be detrimental to the growth and development of the developing countries.

“These measures are indispensable if we are to help create a conducive environment for encouraging financial flows, for offsetting the risk of financial crises, and for helping the developing economies to effectively integrate into global financial markets,” he noted.

He also called on the U.N. system and the Bretton Woods institutions to expand their collaboration in co-financing development field programmes and projects. “They should continue to explore innovative ways of combining their resources in support of a common programme to optimize the benefit to the countries concerned,” he said.

“They should also work closely with recipient governments to determine the optimal mix of funds from grants, concessional funding in support of development programmes and projects in developing countries”, he concluded.