G7 finance ministers promise more loans to poor nations

The finance ministers of the 7 wealthiest nations promised more money available for loans from the World Bank and the International Monetary Fund. The finance ministers meet with the leaders of the two banks twice a year to revise policies going forward. The representatives are vowing to keep the global recession from spreading further to the world's more vulnerable economies.

From Canada's Globe and Mail, reporter Kevin Carmichael files this summary of the meetings.

While hardly oblivious to the plight of the poor, economic leaders from the United States, Britain, Japan and other industrial nations have devoted most of their energy over the past year to cleaning up their financial messes at home.

But the risks facing emerging economies in Africa, Asia, South America and Eastern Europe have become so severe that they were impossible to ignore at meetings of the International Monetary Fund and World Bank.

The economies of emerging and developing countries will expand a mere 1.6 per cent in 2009, compared with 6.1 per cent last year, according to the IMF. Already, 50 million people have been thrust into extreme poverty as a result of the crisis, according to the World Bank.

"The financial and economic turmoil that began in advanced economies is now truly a global crisis that is spilling over into developing countries, and with serious repercussions," Canada's Finance Minister Jim Flaherty said in a written submission to a meeting yesterday of the officials who guide the World Bank.

These biannual gatherings of G7 finance chiefs have become slightly uncomfortable for Mr. Flaherty and his counterparts. For decades, they and their predecessors cajoled and coerced developing nations into following an economic path of free markets, light regulation and private ownership.

The crisis, rooted in the rampant trading of exotic financial assets by American and European banks, exposed the weaknesses of unfettered capitalism as a panacea for global poverty.

"The crisis didn't come from us," said Charles Koffi Diby, Ivory Coast's Finance Minister. "We are the victims here."