DAMBER KRISHNA SHRESTHA
As a spreading financial crisis threatens to deepen the economic recession in the United States, the news of an unprecedented 700-billion-dollar bailout package reverberated through the corridors of the UN this week when over 100 world leaders gathered in New York for the annual General Assembly.
At a time when the United Nations is seeking increased financial assistance from rich nations to help developing countries meet the faltering Millennium Development Goals (MDGs), including reducing extreme poverty by half by 2015, the current US economic crisis is expected to be a major setback.
Addressing delegates last week, UN Secretary-General Ban Ki-moon warned that the current gloomy outlook threatens the well-being of billions of people, especially the poorest of the poor and compounds the damage caused by the higher prices for food and fuel. Ban has called for $72 billion per year in additional external financing to achieve the MDGs by 2015.
As one Asian delegate put it: "The 72 billion is peanuts compared to the 700 billion the White House wants to dish out to save some of the Wall Street firms from going belly up."
Father Miguel d'Escoto Brockman of Nicaragua, the newly-elected president of the General Assembly, warned that the current financial crisis will have "very serious consequences" that will impede the significant progress, "if indeed any progress is made", towards the targets established by the MDGs.
Norwegian Prime Minister Jens Stoltenberg told delegates that "money doesn't seem to be a problem, when the problem is money".
As the economic meltdown in the United States continues, the casualties are piling up both among commercial and investment banks: Bear Stearns, Lehman Brothers and Washington Mutual (allowed to collapse with no government bailout); American International Group, Goldman Sachs and Morgan Stanley (allowed to survive with emergency financial assistance, including some from the government). Merrill Lynch has been folded into Bank of America and Citigroup has taken over Wachovia Bank.
As the entire U.S. economic edifice is in danger of collapsing, the White House has been called upon to save some of the biggest financial institutions in the country and, at the same time, redress the excesses of Wall Street business tycoons who earned multi-million-dollar salaries and extravagant bonuses.
The greed factor in the crisis is that these same tycoons, who are responsible for mismanaging their companies, still insist on continuing with their same lavish lifestyles and lofty salaries even after the massive taxpayer-funded bailout.
But these salaries and bonuses are likely to be curbed as part a return for the bailout package.
Addressing the 192-member General Assembly last week, the President of Brazil Luiz Inacio Lula da Silva said the economy of any country is "too serious an undertaking to be left in the hands of speculators". He added: "We must not allow the burden of the boundless greed of a few to be shouldered by all."