UN lobbies for share of bank rescue funds
The UN and the World Bank are lobbying for a portion of the billions of dollars allocated to bailing out the West's banking systems to be diverted to prevent 400 million people sinking into poverty across Asia in the wake of the global economic crisis.
UN officials say that such a plan is necessary to prevent severe social unrest in poor countries, especially among the tens of millions of migrant workers who are being forced back to their villages as jobs dry up in the cities of Asia.
A similar scheme has been proposed by Robert Zoellick, the head of the World Bank, who recently called for a "Vulnerability Fund" to which each developed country would contribute 0.7 per cent of its stimulus package.
The model being held up as a possible template by UN officials is that used to tackle Turkey's banking collapse in 2000.
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Turkey spent about $50 billion (£34 billion) bailing out financial institutions and handed out about $500 million to poor families on the condition it was spent on things such as health and education.
Ban Ki Moon, the UN Secretary-General, will "make a big push on this" at the G20 summit of world leaders that is to be held in London from April 2, a senior UN official said.
The meeting will be the first of the organisation attended by President Obama.
The UN believes that less than 1 per cent of the funds being spent on saving failing banks would be enough to ensure that the 400 million poor people who have been dragged out of poverty across Asia in recent years, largely because of global demand for the region's exports, do not fall back below the poverty line.
Asian economies are suffering as demand for exports collapses.
Today all eyes were on a meeting of G7 finance officials in Rome for signs of how the world's rich nations will co-operate to combat the global economic crisis.
Timothy Geithner, the US Treasury Secretary, is expected to urge his G7 counterparts to take bold action to pull the global economy out of recession, prop up financial institutions and strengthen regulation.
In a policy note issued before the G7 meeting, the World Bank said that almost 40 per cent of the world's 107 developing countries were highly exposed to the poverty effects of the crisis and the remainder was moderately exposed, with less than 10 per cent facing little risk.
New estimates for 2009 suggest that the economic downturn will cause 46 million more people to live under $1.25 a day, according to the World Bank.
An extra 53 million will stay trapped on less than $2 a day on top of the 130 million to 155 million people pushed into poverty in 2008 because of soaring food and fuel prices, according to the bank.
The forecast suggests that the UN Millennium Development Goals, which set specific targets to reduce poverty by 2015, are at risk of being derailed in the wake of the sub-prime lending crisis.
"The global economic crisis threatens to become a human crisis in many developingunless they can take targeted measures to protect vulnerable people in their communities," Mr Zoellick said.
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