Development banks and the International Mone-tary Fund (IMF) appeal for a multilateral solution rather than a protectionist response to the financial and economic crisis sweeping all over the world, said a joint statement received here yesterday.
The financial crisis has spiraled into a global economic crisis with growth projected to fall to 0.5 percent in 2009, its lowest rate since World War II, said the heads of the Multilateral Development Banks and the International Monetary Fund after their meeting in Tunis on Feb. 12 at the invitation of the African Development Bank.
Multilateral Develop-ment Banks are institutions that provide financial support and professional advice for economic and social development activities in developing countries, including the World Bank Group and four regional development banks: the African Deve-lopment Bank, the Asian Development Bank, the European Bank for Reconstruction and Development and the Inter-American Develo-pment Bank Group.
"We noted the importance of avoiding a protectionist response and experience shows that would inflict damage on developed and developing countries alike," read the statement.
"We emphasized that a multilateral solution that takes into account the interests of all countries, including the poorest, is vital," it added.
The financial institutions said that the whole world is faced with "high levels of uncertainty and downside risks, especially for emerging and developing economies.
"Financial markets remain under stress; currency markets are highly volatile; global industrial production and merchandise trade have plummeted since November 2008; and asset values are falling sharply. Our review of the situation in each region underlined the high levels of uncertainty and downside risks," said the statement.
In emerging and developing economies, "the consequences go well beyond economic contraction or reductions in growth," it added. Unlike the advanced economies, these countries simply do not have resources to bailout their financial or other sectors, to provide a package of stimulus measures, or of social protection, according to the statement.