The current economic and financial crisis has led to a reconfiguration in the scenario of power in the world. The Group of 20 (G-20), which is an extended version of the Group of 8 (G-8), proclaimed itself the main forum for international cooperation. However, the measures the group has adopted do not provide real solutions to the many crises assailing the world today. The Group of 24 (G24), on the other hand, which was originally set up by developing countries to coordinate their positions in the international arena, has in many cases recommended stronger action and with a greater long-term vision than the G-20 countries themselves.
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Once the IDB Annual Meeting has been closed, the approved capital increase amounts to $70 billion, a figure quite below the much criticized amount requested in Medellin and also below the – unconditional – aims of most of the countries in the region that see the Bank as a source of finance for their economic recovery based on easy and quick economic stimulus packages such as the construction of mega-infrastructure projects. This capital increase is included among the ten items on the Cancun Declaration, which in its annex contains a set of 13 recommendations the Bank will have to incorporate to its final document on capital increase that must be approved by the Board of Governors within 60 days.
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Philip Morris seems to have launched in recent weeks a global litigation campaign against the governments that innovate in the war on tobacco. In mid-February the company announced the filing of a lawsuit against the Uruguayan government, on March 9 it sued Norway and similar steps are announced against Australia if the "preventive" policy being studied by the Labour government is approved. But, while the local justice will be settling the dispute in Australia and the case in Norway has been brought before the European Free Trade Agreement (EFTA) Court, the Uruguayan government will be forced to defend itself before the International Centre for Settlement of Investment Disputes (ICSID).
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The Ninth General Capital Increase of the IDB was in the agenda of the 50th Annual Assembly of Governors held in March in Medellin, Colombia. Since then, civil society organizations (CSOs) involved in monitoring IDB policies have requested information and made various proposals. The pressure exerted through successive papers, letters to the Governors and constant communication with Bank officials both at national and international level, resulted in the convening of a consultation process with the region’s civil society organizations, an unprecedented move in the history of the recapitalization processes of multilateral financial institutions.
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Civil society spokespeople representing a coalition of more than 100 organizations in 20 countries are arriving in Cancun this week for the Inter-American Development Bank’s annual meeting, looking for answers from the Bank’s governors and management on a 26-point reform agenda on which any capital increase should be conditioned. Key reforms are needed in areas of sustainability and climate change, regional integration, and managing for results.
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The latest turmoil underscores the need for financial reform, particularly to protect developing countries. One promising reform proposal involves the use of Special Drawing Rights (SDRs) both to finance the development needs of poor countries and, ultimately, as a global reserve currency to supplement the US dollar. Soren Ambrose and Bhumika Muchhala consider this proposal. They explain the need for an alternative to the US dollar as a reserve currency, pointing to problems faced by developing countries under the current system.
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