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Crisis and the Developing World

One can’t help but agree with the call given by three big, developing economies this week. Following their meeting in New Delhi, leaders of India, Brazil and South Africa, known as IBSA, have flayed the rich nations for landing the global economy in a ‘self-made’ crisis.

Refusing to emulate the response of big economic players to the current credit crisis, the three countries representing three big continents have argued that the developing economies should evolve their own approach, and there is no such thing as uniformed diagnosis for the ills around.

With a combined population of 1.3 billion and their economies growing at a phenomenal speed, the three emerging giants called for reforms in the global economy. The IBSA have rightly pointed out that the ‘haves’ and ‘have-nots’ need to sit down and do an appraisal of ‘what really went wrong’. They should also need to see what can be done to avoid such disasters in future.

The Keynes economy cannot withstand a 1929-like Crash. Nor are there any Roosevelts around to come up with a New Deal. Extreme poverty, unwarranted wars and climate change pose enough dangers to our survival. The dictum of one-size fits all, imposed on parts of the world by the Western economies, needs to be done away with. The ongoing crisis necessitates a dialogue to establish a coordinating mechanism on global financial crisis. Brazil’s President Lula da Silva minced no words in saying that extra care needs to be taken on the part of the developing economies as they “are sellers” and depend on the largesse of the West.