UN economic conference unable to secure financing for developing countries

Video

Play Video126 countries join UN meets on financial crisis Play VideoCCTV interview: UN meeting on crisis Play VideoUN meets on financial crisis

by Lucy-Claire Saunders, Bai Jie

UNITED NATIONS, June 25 (Xinhua) -- The inability to secure funding for low-income countries is the most unfortunate development to come out of the ongoing United Nations conference on the financial crisis, said Martin Khor, the head of an influential think tank of developing countries, here on Thursday.

"This is the greatest deficiency, that there was no decision made to give concrete financing to countries that are now facing major problems," Khor of the South Center told Xinhua in an exclusive interview. "This, everybody knows, and this was the weakness of the conference."

The South Center, based in Geneva, is an intergovernmental organization and think tank of developing countries.

Developing countries had put forward certain proposals at the conference, which opened on Wednesday at the UN Headquarters in New York, to get financing, but they were not exactly embraced by developed countries like the United States, Europe and Japan, said Khor, who is an economist from Malaysia.

In particular, the Group of 77 (G77) argued for 100 billion in Special Drawing Rights (SDRs) at no cost, which, Khor said, did not seem unreasonable as the Group of 20 (G20) key economies in the world had previously made a commitment of 250 billion U.S. dollars in SDRs.

However, from that G20 commitment, only 25 to 30 billion dollars made it to low-income countries, while 80 billion dollars will go to the developed countries because the allocations were made on quotas and not on need, said Khor.

The G77 proposal, along with several others, was rejected during the negotiations over the draft document to be voted on by the 192 countries of the General Assembly on Friday.

Khor, who observed part of the negotiations, said if financing was secured for low-income and middle-income countries, the conference would have had a "fantastic conclusion."