UN urges G20 to back $1 trln aid for poor nations

UNITED NATIONS, (Reu-ters) – The United Nations is  urging 20 of the world’s most powerful economies to support a  $1 trillion stimulus plan for developing countries when the 20  meet in London next month, U.N. officials said yesterday.

U.N. officials familiar with the plan told Reuters it was  based on an estimate of the financing developing countries will  need in 2009 and 2010 to weather the financial crisis.  Secretary-General Ban Ki-moon had made the appeal in a letter  to leaders of the so-called Group of 20 nations, they said.

Ban’s proposal, first reported by the Financial Times, will  be discussed at the G20 summit meeting in London on April 2. He  will also discuss it with British Prime Minister Gordon Brown.

It was not immediately clear whether the G20 leaders would  agree to back the plan, which U.N. officials said was intended  to provide liquidity and prevent widespread social unrest in  developing countries due to a deepening of the credit crisis.

“Our worry is that this is fast becoming a political  issue,” said one U.N. official on condition of anonymity. He  said ensuring “social protections” across the developing world  was crucial.

The U.N. officials said a quarter of the funds should go to  the poorest countries where the most vulnerable people are  living. Another quarter should go to critical investments, such  as infrastructure projects, in order to stimulate growth in  line with the U.N. fight against poverty already underway.

The other $500 billion should be used to bridge liquidity  gaps and keep trade flows active, the officials said.
Much of the financing, they said, could be done through already existing international organizations like the World  Bank and International Monetary Fund, as well as through funding of U.N. development projects.

In his letter Ban also warned G20 leaders against what one  official described as “knee-jerk protectionism”. Ban also  emphasized the importance of environmentally friendly  investments in clean energy and so-called green jobs.

Approval in London is not assured. One worry, U.N.  officials said, was a potential split emerging among European  Union countries on the wisdom of stimulus packages.

Czech Prime Minister Mirek Topolanek, whose government  holds the rotating EU presidency but lost a confidence vote in  Parliament on Tuesday, was quoted as saying U.S. President  Barack Obama’s stimulus policy was the “way to hell.” His  deputy Alexandr Vondra later said he had been misunderstood.

“I think we’ll have to wait until April 2 to gauge  acceptance,” a U.N. official said.

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