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September 21, 2009 | by  | in Opinion |
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Credit Crunch

Last Wednesday was the second seminar presented in the ‘Do Something!’ series of talks about today’s hottest political issues. Hosted by the Anglican Chaplaincy and Human FM, these sessions are designed to inform and call people to practical action on these issues. Last week’s topic was about the relationship between the credit crunch and global poverty, presented by Miriam Plume (NZAid) and Ben Thirkell White (VUW).

Students were given a low-down on the recession, with the key message being that this was a crisis started elsewhere, and yet there has been marginal response to how the developing world has been affected. For a recession brought on by the collapse of Western excess and unchecked speculating by financial institutions, it’s impressive how much attention has been given to those that could well-afford to lose money and still keep afloat (the winners out of the US stimulus package? The banks). There have been huge amounts of resource poured out at home whil ‘maintaining’ aid levels to developing countries.

The trouble with the current level of aid is that it is disproportionate to the impact of the recession on the developing world. They have suffered lower export prices, lower government revenue and reduced earnings, which, set against the backdrop of 2008’s sharp rise in the cost of food, have hit these countries at their most vulnerable. Growth is sitting 3 percent below previous projections. According to IMF (International Monetary Fund) a 1 percent growth drop leads to a 2 percent increase in poverty, so this reduced growth is a cause for great concern. Yet those in line to get most of new IMF resources are middle income countries.

Thirkell-White suggested that the current situation about poverty is a symptom of the way the world works. It’s not that people don’t care, it’s just that it isn’t a high priority.

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