Developing countries meet on global crisis

The World
The World

(What are you afraid of?) One would be that there’s a substantial drop in aid flow to developing countries, where people are suffering from the effects of rising food and fuel prices. The second concern is that this will disrupt the flow of investment into developing countries and I’ve seen some commentary from Morgan Stanley to that effect. (What do South Africans make of the figures being thrown around in the bailout package?) Yes, $700 billion is three times the GDP of South Africa, it’s more than twice the sum of money that could bring all the people in the world in severe poverty out of it. at the summit we said there’s a need to mitigate the effect of the crisis in poor countries and I think if there’s a simple resignation to there being cuts in aid, that would be a problem. (What would be the worst case scenario for you?) Well emerging economies in places like China, India, Brazil have to an extent mitigated the financial crisis for us. nonetheless, the financial crisis will likely lead to a general slowdown which will impact demands for exports and that will have a debilitating effect on growth in South Africa. But there’s not a concern that there will be a direct impact, just a general impact.

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