The Citizen (Dar es Salaam)
David Mugonyi
10 October 2008
Castries — Commonwealth countries have called for stricter regulation and surveillance of financial institutions to stop the spread of the current crisis.
The countries' ministers also urged the World Bank and International Monetary Fund to put in place measures to shield poor countries from the effects of the financial turmoil. The gathered ministers of finance and plenipotentiaries said: "We want to see international cooperation both to secure an early return to stability and to strengthen financial regulation and surveillance for the future."
In a communiqué read by St Lucia Prime Minister and Minister for Finance Stephenson King yesterday, the ministers indicted the IMF for "sleeping on the job."
"Absence of tighter regulation contributed to this crisis which has eroded confidence in the financial markets and the IMF stands accused of failing in its regulatory duty," Mr King underlined.
He was addressing a press conference in Castries, St Lucia island after the ministers meeting, called to discuss rising food and fuel prices. The ministers also discussed the need to reform the WB and IMF. He was accompanied by Commonwealth deputy secretary general Ransford Smith.
The ministers asked the WB and IMF to assess the effects of the continuing financial turmoil in developed countries and design measures to protect developing states.
"The impact on developing countries, initially limited, has become more severe as borrowing spreads have widened and credit availability reduced," he added.
In the long run, the impact on these countries could be severe and problematic. Several banks, insurance companies and mortgage firms in America and Europe have collapsed forcing their governments to inject more cash to keep them afloat.
In addition to assisting developing countries to resolve the food and fuel crisis, the ministers urged the international community to increase both short and long term investments in agricultural production and finding new sources of energy. Increased food production would help tame rising prices, they said.
The countries called for effective disclosure by financial institutions on their status for improved risk management.
However, they applauded United States and UK measures to contain the crisis by stabilising markets through action to protect savers, boost confidence and reduce the risk of recession.
The ministers observed that high food and fuel prices were interfering with the progress of Millennium Development Goals such as education, health, combating HIV and other diseases because funds were being diverted to cushion the public from the fallout from the crisis.
Mr King said developing and small countries wanted more representation in the WB and IMF, quick disbursement of loans and change of outdated policies.
They proposed that Africa should get a third position in the World Bank executive board. They also want a more transparent procedure for appointment of the heads of the two institutions regardless of their nationality.
"The ministers unanimously agreed that the Bretton Woods institutions need overhaul so that their mandate can be in line with our needs in this era," he said.
The countries formed a group to draw specific reforms they want in the two institutions.
The Commonwealth ministers left Castries yesterday for Washington to attend the WB/IMF meeting where they are expected to speak with one voice to push their agenda.
Kenya's delegation is led by acting Finance Minister John Michuki. Others in the team include permanent secretary Joseph Kinyua and Central Bank Governor Njuguna Ndung'u. Also in the delegation are members of the Parliamentary Committee on Finance Chris Okemo (chair), Philip Kaloki (vice chair) and Jakoyo Midiwo.
Be the first to Write a Comment!
Copyright © 2008 The Citizen. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
