New York, NY (BBN) – United Nations Secretary-General Ban Ki-moon on Monday called for more action over the global financial crisis following the “laudable” steps taken by major economies and international financial institutions over the weekend.
“More coordinated approaches, including direct intervention by governments of the major economies, are necessary to recapitalize the banking system and guarantee the savings of ordinary people,” the UN chief said in a statement.
“The initiatives by the World Bank and the IMF [the International Monetary Fund] to provide new emergency liquidity provisioning to poor countries could help them counteract some of the consequences of this crisis. But more needs to be done,” he said, calling for urgent reform of the global financial system.
Meanwhile, the UN expects world gross product (WGP) growth to decline to a recessionary pace below 2.0 per cent for 2008, down from the 3.8 per cent of 2007, implying zero growth in world per-capita income and likely falls in income for a large proportion of the population, particularly the poor.
Growth in developing countries and economies in transition is expected to decelerate on average by about 2.0 per cent in 2008, from the previous year, and by another 1.0 per cent or so in 2009.
“The root cause of the global financial crisis is deeply embedded in policy deficiencies in the international financial system and in the unsustainable fundamentals of the world economy,” UN Under-Secretary-General for Economic and Social Affairs Sha Zukang declared. “The prospect of a systemic world financial breakdown –and, consequently, a long lasting economic slowdown – is real.”