SOUTH-SOUTH MEET TO OVERCOME FINANCIAL CRISIS

KUALA LUMPUR, Feb 5 (Bernama) -- As financial and economic crisis begins to
bite, the developing countries are meeting in Geneva to find ways to soften the
blows from the financial crisis now spreading to their economies.

Financial experts and government officials began a two-day "Multi-Year
Expert Meeting on International Cooperation: South-South Cooperation and
Regional Integration" in Geneva Wednesday.

In a statement here Thursday, United Nations Conference on Trade and
Development (Unctad) said the meeting aimed to find ways to use the
"South-South" economic cooperation -- particularly trade, investment, financial
flows, and joint efforts to stabilise currency exchange rates and debt.

Unctad secretary-general, Supachai Panitchpakdi, said a global financial
crisis has shaken the economic foundations of the North and has threatened the
growth and development aspirations of the South.

"The timing, therefore, is right to explore how greater South-South
cooperation can help them cope with the crisis," he said at the opening of the
meeting.

Supachai said merchandise trade between developing countries grew at an
average of 13 percent per year from 1995-2007, and at the end of that period
amounted to US$2.4 trillion (US$1=RM3.59), or 20 percent, of world trade.

He said one-third of these exports were high-skilled manufactured goods,
which yielded high profits and had enabled developing nations to diversify their
economies.

"The global financial crisis has now put these trends in jeopardy," he said.

Supachai said the sharp declines in demand from the North were quickly
filtering through the international trading system and Unctad now estimated that
exports from the developing world could decline by 9.2 percent in 2009.

He said the sharp fall in commodity prices resulting from the slowdown
was threatening the well-being of least developed countries, which were heavily
dependent on exports of these basic farm products and industrial raw materials.

Supachai said a near freeze-up of the global banking system has made it hard
for countries to obtain the credit and other financing needed to carry out trade
while remittances from migrant workers employed overseas were likely to decline
as they were were increasingly laid off.

"Aid from rich to poor nations could very well decrease by 20-40 percent as
donor countries struggle to bail out their own economies," he said.

He said South-South measures could include financing from regional
development banks in the South to compensate for the loss of some international
aid.

"Regional stimulus packages, especially for badly-needed improvements to
infrastructure, might help preserve jobs and keep developing countries'
economies viable," he said.

Supachai also recommended regional arrangements aimed at mitigating the
impact of financial shocks.

"The Chiang Mai initiative arising out of the Asian financial crisis of
1997-1998 provided participating countries with international financial
liquidity through swap arrangements," he said.

Meanwhile, some participants termed the meeting an "emergency crisis clinic"
to serve as a starting point for the development of a "diagnosis kit" to help
developing countries cope with periodic global financial crises.

The meeting continued today with a panel discussion on "Regional monetary
and financial cooperation -- South-South solutions?" and will conclude with a
debate on "The way forward."
-- BERNAMA