São Paulo – In the midst of the crisis, Arab and South American countries are going to defend the construction of a new international financial architecture during the second summit for heads of state and government from the two regions, to be held on March 31 and April 01 in Doha, Qatar. The information was taken from the minutes of the declaration that should be passed at the meeting, and to which ANBA obtained exclusive access. The document has already been approved by foreign ministers from the two blocs.
The meeting in Qatar should end one day prior to the G-20 Summit, in London, which was scheduled precisely to discuss solutions for the crisis and the resumption of economic growth worldwide. The group is comprised of the world’s 20 largest economies, including members of the Arab-South American Countries initiative (Aspa), such as Brazil, Saudi Arabia and Argentina.
According to the minutes for the Doha declaration – which is still amenable to change before its final approval at the meeting –, the Arab and South American countries “emphasize the need to establish an international financial system which prevents financial speculation and takes into account adequate regulations. In this context, the construction of this new international finance architecture must be congruent with socio-economic development.”
The text calls for the implementation of mechanisms for cooperation in the financial area. The crisis that emerged in the developed countries affects both regions, which together answer for more than 8% of the global Gross Domestic Product (GDP), the equivalent to approximately US$ 5 trillion, and account for 10.7% of the planet’s population. There are 22 Arab countries and 12 South American ones.
According to the minutes, the most developed nations and multilateral financial organisations must provide support for developing countries, especially the poorest ones, to face the crisis. In that regard, the letter calls for the promotion, as soon as possible, of an international conference, within the framework of the United Nations (UN), for debating the crisis and its solutions.
The two regions commit to strengthening the institutions linked to the UN in the economic and social areas, “in order to promote a broad and ambitious international economic, social and development agenda.”
Furthermore, the text emphasizes the importance of a continuous and stable flow of financial resources for the promotion of economic and social development, particularly in the areas of infrastructure, poverty reduction and hunger eradication.
A reform of the international financial system, with stricter regulation and supervision and greater representation of emerging countries in multilateral organisations, is already being discussed within the scope of the G-20, as well as the continuation of the Doha Round for liberalisation of international trade.
In that respect, the document by the Arab and South American countries states that the non-conclusion of negotiations at the World Trade Organisation (WTO) jeopardises exports by the developing and transitional economies, in addition to delaying global economic growth. International trade is being heavily affected by the crisis.
More trade
From a bi-regional standpoint, the letter calls for an expansion in trade of agricultural and industrial goods, plus greater technical cooperation between countries in the two blocs. It acknowledges the fact that trade has grown after the first summit, held in 2005, but highlights that there are still untapped opportunities. In the case of Brazil, for example, bilateral trade (the sum of exports and imports) with the Arab countries went from US$ 10.5 billion in 2005 to US$ 20.3 billion last year.
The minutes also mention agreements currently being negotiated by the Mercosur with Egypt, Jordan, Morocco and the Gulf Cooperation Council (GCC), a bloc consisting of Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman. In the document, the countries support the development of trade and partnerships by means of the granting of trade preferences between emerging nations.
Also in the economic area, the document underscores the importance of supporting sustainable development, especially through funding by micro-credit institutions, and highlights the importance of involving civil society and the private sector in the promotion of bi-regional efforts.
Read more on the topics of the summit tomorrow (18) on ANBA.
*Translated by Gabriel Pomerancblum
