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FROM THE FIELD

Global credit crisis threatens the poorest, says ACT director
15 Oct 2008 16:13:00 GMT
 Source: Action by Churches Together (ACT) - Switzerland
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The home of a Denkesh Sebea, mother with seven children, living a few hours south of Addis Ababa. They have had no rain and the cattle have died because of lack of food and water. There is nothing left to eat.
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The home of a Denkesh Sebea, mother with seven children, living a few hours south of Addis Ababa. They have had no rain and the cattle have died because of lack of food and water. There is nothing left to eat.
Henrik Stubkjaer/DCA-ACT International.

Background

•  Food and hunger

•  E. African hunger

•  S. African hunger

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GENEVA, 15 October 2008--"The global credit crisis will have dramatic consequences for the poorest, because those who fund them are hit by the breakdown," says John Nduna, director of ACT International. The faith-based global humanitarian alliance is present in more than 75 countries and brings together 134 members from across the world. Mr Nduna's remarks come on the eve of World Food Day, 16 October 2008.

"A significant part of our funding comes from individuals through churches in Europe and North America. They are hit by the financial crises and that will affect their private budgets. Many struggle with loans, risk losing their jobs and small businesses might close down. Our contributors will have less to offer and our emergency work will be affected," Mr Nduna says. The financial meltdown will then dramatically affect those who are in chronic food crises, like Ethiopia, Zimbabwe, the Democratic Republic of Congo, India and Afghanistan.

Enough money
"The irony is that the European and American governments are now pumping in hundreds of billion dollars to help their banks and financial institutions, so they still can service the market. We ask for little. Just 30 percent of our funding comes from governments, but they seem to make their first cuts on aid. Where are their priorities?" Mr Nduna asks.

The reactions from the ACT director are in line with international senior analysts on development. Jeffrey Sachs, special advisor to the UN secretary-general, told Reuters that the financial crises "distract world leaders from the fight against hunger, even as it proves they can mobilize massive funds to tackle emergencies." Sachs also added: "The truth about poverty is that the poor don't need very much."

The World Bank president Robert Zoellick characterized the financial crises as "a man made catastrophe". The poorest and most vulnerable groups risk the most serious - and in some cases permanent - damage.

More people are starving
The harsh consequences for the poorest comes on top of the last year's dramatic rise of food price. According to the UN Food and Agriculture Organisation, the rise of food prices added 75 more million people to the ranks of the hungry in 2007. They will need help from others, but those "others" are now hit themselves by a financial crises affecting their ability to share.

###

ACT members speak out

The credit crisis has been an important issue on the minds of leaders of ACT members working across the world. While the long-term consequences of the crisis are not entirely known, ACT leaders report that the implications for poor people are likely to be dramatic in the coming years.

Words from ACT leaders around the globe:

"The image painted by the media is that the greatest world crisis today is the financial crisis on Wall Street. The real crisis is that there are 2.5 billion people on our planet who survive on less than two dollars per day.

"The poor countries see it as extremely serious that the West refuses to take their situation seriously. USD 500 billion has been loaned out irresponsibly to dictators. Congo, for example, which at this time is struggling to deal with the greatest humanitarian emergency there is, is being forced to repay billions of dollars that Mobutu loaned when he was in power." - Atle Sommerfelt, General Secretary, Norwegian Church Aid

"The price rise of some food commodities have reached up to 300 percent -- and are still increasing. The official number of people in need of emergency assistance has grown from 4.6 million in May 2008 to a current 6.4 million. Moreover, as most humanitarian interventions are supported by partners overseas, there is concern that the worldwide financial crises will have direct implication on resources that can be available for people in acute need of emeregency assistance." - Deed Jaldessa, Director of Development and Social Services Commission, Ethiopian Evangelical Church Mekane Yesus

"The economic crisis, I suspect, will naturally see the US having a 'home first focus' which then has automatic implications for the amount of fiscal support allocated for foreign assistance and support of international social programs. Ultimately, this would conceivably result in at least short-term negative impacts particularly for developing countries and the vulnerable populations in those countries." - Donna Derr, Director - Emergency Response Program, Church World Service, USA

"People are totally focused on economic growth, as if economic growth by itself can solve all the problems of the world. People have to understand that unless we have a very balanced view of social, economic and political emancipation of everyone -- which should be positively biased towards the poor - then society will never be transformed. And the gap between the rich and the poor will only continue to grow.

"On the macro level, the credit crisis will not affect Indonesia too significantly. The government has taken good decisions on the financial situation and can still survive four or five more years into the future. But on the micro level, poor people will be affected very much -- unemployment could rise and there will be an increase in the number of poor people who will not be able to fulfill their own needs." - Lucy Montolalu, Executive Director, Yayasan Tanggul Bencana di Indonesia

"The lifestyle and the economy in the western countries is too much burden for the ecological system of our planet and it is producing more and more hungry people in poor countries. We have to come from an economy of excessiveness to an economy of having enough. Eighty percent of the food production in the world is done by small farmers. And it is an irony that most of the people suffering from hunger are living in the countryside working as small farmers and daily laborers." - Cornelia Füllkrug-Weitzel, Director, Diakonie Katastrophenhilfe / Brot für die Welt, Germany

"If you look back 25 years, people were more engaged in producing millet, sorghum and other staple food grains. But now there is a total shift from producing staple foods to cash crops and biofuels, which is making the poor even more vulnerable because they lose their power and control over their livelihood. Justice, peace and dignity are missing from the agendas of the food and economic crises." - Sushant Agrawal, Director, Church's Auxiliary for Social Action, India

###

Action by Churches Together (ACT) International is a global alliance of churches and related agencies working to save lives and support communities in emergencies worldwide.

Media contacts:
Tomm Kristiansen, Communications Officer (office: +41 22 791 6039 / mobile: +41 79 358 3171 / tkr@act-intl.org)

Sidney Traynham, Assistant Communications Officer (office: +41 22 791 6711 / mobile: +41 79 681 1868 / sjt@act-intl.org)


[ Any views expressed in this article are those of the writer and not of Reuters. ]

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Topics

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[ Any views expressed in this article are those of the writer and not of Reuters. ]

Background information

Briefings
E. African hunger - [Who works where]
S. African hunger - [Who works where]

Topics
Food and hunger
Facts & figures
Afghanistan Congo (DR) India Indonesia Zimbabwe Ethiopia

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