The International Monetary Fund and World Bank should use their spring meetings to deliver the G20's promise to protect the world's poorest countries from economic devastation, Oxfam said today.
Dramatic declines in trade, remittances and foreign investment are hitting developing countries. The world's poorest countries are particularly vulnerable to the economic crisis, which is expected to push 46 million more people into poverty this year - the equivalent to the entire population of Spain.
Marita Hutjes, Oxfam senior policy advisor, said: "G20 leaders' pledge to increase IMF and World Bank funding is welcome but that blank cheque should now be made out in favour of poor countries. It's still unclear how promises for support for the poorest countries will materialise.
"Rich countries' governments need to arrive in Washington this week with concrete funding commitments. This money must not come at the expense of existing aid budgets. Instead rich countries must deliver on their commitment to provide 0.7% of their national income as aid, as soon as possible. Rich governments whose policies contributed to the crisis have a responsibility to make this happen."
Oxfam is also calling on the IMF to confirm the G20's promise that the fund will use the sale of gold reserves to release additional finance for low income countries. It should also commit to doubling cheap loans to these countries.
Along with the greater role in tackling the economic crisis that the IMF and World Bank have been given, comes a greater responsibility to move on long-awaited reforms to their lending arrangements and governance, Oxfam said.
Hutjes said: "Loans must not worsen the impact of the economic crisis on the poorest. It is essential that loans and grants are disbursed quickly, and that they come without onerous or harmful conditions attached. Everything must be done to ensure that poor countries are not landed with even more debt.
"It's time that the IMF and World Bank became more democratic to allow developing countries an equal voice in decision making. Governance reform is pivotal - the Europeans and the US need to cede some of their power over these institutions now."
/Ends.
Oxfam spokespeople will be available for interview in Washington and London
For information or to arrange an interview: Caroline Hooper-Box +1 202 321 2967, Jon Slater +44 7876 476493
Notes to editors:
The loss of wealth caused by the slump in emerging and developing country GDP comes to an estimated $1 trillion in 2009. (Calculated from http://www.imf.org/external/pubs/ft/weo/2009/update/01/index.htm and http://www.imf.org/external/pubs/ft/weo/2008/02/weodata/index.aspx)
Global aid levels are minimal in comparison to the $8.4 trillion mobilised to prop up ailing banks. At $173 billion, the American Insurance Group (AIG) alone has received $50 billion more than total global aid levels.
Foreign Direct Investment into developing countries has collapsed by more than $700 billion dollars since 2007, more than six times total aid levels.
According to the World Bank the economic crisis is projected to increase poverty by 46 million people in 2009.
The IMF has calculated that those 22 low income countries who face the most acute finance problems need $25 billion in concessional finance to keep their external reserves at safe levels in 2009. Support for fiscal stimulus would require funding at a larger scale.
Oxfam has calculated that Low Income Countries need at the bare minimum a fiscal stimulus package of 3-5% of their GDP which would amount to an estimated $24 billion - $41 billion per year