THE GLOBAL FINANCIAL CRISIS: IMPACT AND RESPONSE OF THE REGIONAL COMMISSIONS

THE GLOBAL FINANCIAL CRISIS: IMPACT AND RESPONSE OF THE REGIONAL COMMISSIONS The world economy is facing the worst crisis since the Great Depression. All the regions are addressing enormous challenges emanating from the growth slowdown in developed countries as well as the global credit crunch. Shared impacts across regions are slowdown in exports, fall in asset markets, reduced credit for consumption and investment and the resulting increase in unemployment, poverty and increased difficulty in meeting the MDGs. Furthermore, regions display a number of challenges specific to their unique circumstances. Regional Commissions are addressing these challenges through a range of actions to support their member governments. Other than actions specific to their regions, there are some key areas in which joint initiatives among the Regional Commissions are important: • A joint approach to promoting debate and political consensus on recommendations for reforming the global financial architecture could be pursued through an inter-regional dialogue between the Regional Commissions, including through cooperation in research culminating in a high-level Meeting of key policy decision-makers from each region. • A joint approach to emphasizing strongly to the international community the need to maintain sufficient resources for financing for development in the face of greater needs arising from the crisis as well as increased budgetary pressure for developed country governments. In this context, a joint research initiative could be undertaken to assess the impact on achieving the MDGs arising from the crisis. Economic Commission for Africa Impact on region The financial crisis is taking place at a time when African countries are slowly emerging from the effects of the food and energy crises and threatens to reverse the gains made by the region in recent years. Furthermore, it has changed the international environment within which African countries conduct and implement policies and there is general consensus that bold, swift and concerted actions are needed to reduce the potential negative effects of the crisis on poor countries. The immediate effects of the crisis on African economies have been a tightening of credit, weakening currencies and declining stock markets, especially in some of the major stock exchanges in Africa. Moreover, most African countries are also likely to suffer from a second round of impacts, resulting from a decline in global economic activity which would lead to a decline in African exports, trade credits, investments, remittances and receipts from tourism. In addition, pressures to recapitalize financial institutions and support other ailing industries may cause donor countries to reduce aid to developing countries, with serious consequences for the African countries that rely on official development assistance to meet their pressing challenges. Preliminary evidence indicates that the crisis has led to a reduction in the growth forecasts for the continent for 2009 by 1.5 percentage points, download.