According to the World Bank, in January 2010 there were 1.5 billion people living in extreme poverty. Thus, the goal of reducing poverty and hunger to half by 2015 — the first of the Millennium Development Goals (MDGs) — will be impossible. Furthermore, the lack of significant progress on trade, debt, aid and technology transfer (goal 8) prevents the creation of an adequate environment to achieve the objectives 1 to 6. In this context, the UN report "Rethinking Poverty", published in January, is an important contribution to the discussions toward the MDG Summit that will be hold in New York in September 2010.
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This week, more than 100 civil society organizations from 18 countries stepped up pressure on Inter-American Development Bank (IDB), sending a letter urging its governors to explain how the Bank’s failing grades in transparency, sustainability, and accountability will be repaired before approving management’s request for a significant capital increase.
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At the World Economic Forum in January 2010, IMF Managing Director Dominique Strauss-Kahn (DSK) marked for the first time that the IMF has favorably acknowledged the possibility of using SDRs as a finance instrument. DSK was vague in his proposals and said the IMF will issue a paper sometime soon to elaborate. Though DSK seemed to suggest that the IMF could control the "fast-start green fund", it seems unlikely that an institution with no climate credentials would be entrusted with that role. DSK's speech does open up space for serious, practical consideration of how SDRs could be used for climate finance.
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The Unified System for Regional Compensation (Sistema Unitario de Compensación Regional de Pagos, SUCRE), whose founding treaty was signed in October 2009 by ALBA's presidents, finally came into effect on 27 last January. The Sucre is a virtual currency that allows those who buy goods in other countries (which are part of the system) to pay in their domestic currency, and also those who sell to receive payment in their local currency. This represents a saving of foreign currency and lowers the transaction costs, thus opening the way for further development of trade between these countries.
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ActionAid International and Third World Network launched a joint study on the potential use of the IMF's Special Drawing Rights (SDRs) as a tool for both innovative financing and systemic monetary reforms. SDR-derived funds can be applied to critical financing needs for developing and low-income countries, including development, climate finance, and effective measures to counter the impacts of the global economic and financial crisis. With international co-operation, SDRs could potentially mobilize more resources than other proposals for new forms of financing.
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With loans in 2008 outside the European Union (EU) of around EUR 6.1 billion, the European Investment Bank (EIB) is a leading financial powerhouse operating around the globe on behalf of the EU and its member states, the EIB’s shareholders. The mandate for EIB lending to all non-EU countries, excluding ACP and accession countries, is currently being reviewed by a panel of "wise persons". Within this framework, a group of Latin American civil society organizations sent a letter to that panel expressing their concerns on the EIB activity in the region.
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