A recent report by the Economist on the world economy argued that, "when you are falling, you do not look up. Only when you hit bottom can you stop and contemplate the cliff you must now climb". If the climb back up is tough for the rich states, it is certainly much, much tougher for poorer states who did not have as much to cushion the fall.

Certainly, all economies have, and continue to, suffer in the global financial crisis. A World Bank report projects that in 2009¹, for the first time since the Second World War, global GDP will decline and the drop in world trade will be the steepest in 80 years. Most of the OECD states have suffered stagnated growth or recessionary losses, even in the emerging (BRIC) economies of Brazil, Russia, India and China, growth has slowed significantly.² But, as is the case, with any fall, it is those who already vulnerable that have suffered the most, simply because they have less to lose. For the poor, finance is always about much more than economics. In practical as well as philosophical terms it is a matter of basic human rights.

The poor have most to lose

On top of the sharp price increases in staple foods and fuel in 2008, least developed nations are especially vulnerable to reductions in foreign direct investment in their economies, in export trade, in the levels of remittances (which have been predicted by the World Bank to fall by at least 5% in 2009 (from $305 billion in 2008 to an amount closer to $290 billion in 2009),³ or in the quantities of economic aid they receive (legitimate fears of aid reductions are well founded, given the estimated 25% drop that followed the Asian financial crisis last decade).

Stark warnings have been voiced from within the UN about the imperilled prospects of achieving the Millennium Development Goals (of halving world poverty, instituting universal primary education for boys and girls, substantially reducing infant and maternal mortality rates, halting the spread of HIV/Aids, arresting environmental degradation, and promoting economic development in the poorest states) by the scheduled 2015. Though short on detail, UN Secretary-General Ban Ki-moon has been long on pessimistic rhetoric, warning that the turmoil in global financial markets could have "a very serious negative impact" on the ability (or more likely, enthusiasm) of rich nations to meet the goals. That is despite the sums required to do so being considerably less than the $1.3 trillion bailout packages put together to rescue ailing Wall Street banks (the annual aid budget of the US is currently around $25 billion, while that of the World Bank stands at approximately $38 billion; according to the OECD, the total aid commitment from all the world's major Western donors in 2007 was just over $100 billion (this figure then excludes China which clearly does provide substantial aid and investment, especially in Africa, but does not publish its overseas development assistance statistics). The plight of the developing countries in the wake of the crisis has been on the minds of global leaders and global institutions in the lead up to the G20 Summits this year. In April, World Bank President, Bob Zoellick, put the plight in sharp perspective, arguing, "in London, Washington and Paris people talk of bonuses or no bonuses. In parts of Africa, South Asia, and Latin America, the struggle is for food or no food." This concern echoes the statement of UK Secretary of State for International Development, Douglas Alexander, at last year's World Bank AGM that "in this interdependent world, co-ordinated action from governments, the IMF and the World Bank is not only a moral imperative, but in our self interest."

The fundamentalist undertones of such an exhortation flow from the circumstances faced by nearly one billion people every day. For without the means to secure adequate housing, health care, education, and enough to eat and drink, and lacking protection against exploitation, discrimination, and (perhaps worst of all) disdainful disregard, the poorest of the poor will live, if they manage to stay alive at all, only barely. Poverty does not cause human rights abuse. It is, primarily, the actions or inactions of governments that cause human rights abuse. However, the incidence of poverty is a reliable sign of attendant human rights problems, and an indicator that states are not fulfilling their obligations under international human rights laws.

One year on

A year on from the panic of September 2008, Mr Zoellick has pronounced that immediate measures put in place have "broken the fall of the financial crisis". He adds, however, that it is "too early to declare success."⁴ In particular, debate is far from resolved on the question of repairing the global financial system for the long-term. In these discussions, considerations of how to help the rich help the poor should be front and centre. This is not just because their social and economic development needs are so desperate, but, more broadly, because such a focus reminds us what the economy is really for. Economic prosperity, still less the generation of capital, is not an end in itself. Rather, it is merely a means necessary to achieve ends such as greater individual wealth, social welfare, national stability and global peace.

The notion of the economy as an instrument is hardly new, even if it is too often forgotten. John Stuart Mill and Adam Smith, the intellectual titans of liberalism who laid the philosophical foundations of modern economic thought and practice, were clear about this. For Mill, "the economical advantages of commerce are surpassed in importance by those of its effects which are intellectual and moral", while Smith was adamant that while the benefits that commerce can bestow on individual freedom may be the "least observed advantage of commerce", they are "by far the most important of all its effects." These are clarion calls that must now be heard and heeded above the din of the market.

As a matter of principle, economic globalisation is indispensible to the prosperity, welfare and rights-protection of rich and poor alike. But markets in practice – whether in the surreal, paper world of global finance or in the real economy of commodities and services – must be managed if such goals are to be reached. Even the now much- maligned, so-called "deregulated" capital markets, ushered in under the laissez-faire banners of Reaganomics and Thatcherism (and duly embraced by all economies in the West (and globally)) were in fact sustained by mountains of regulations. Substantial legal regimes have been needed to keep at bay the protectionist and discriminatory tendencies of states, the anti-trust and anti-competitive behaviour of corporations, and the insider-dealing and collusion inclinations of financiers.

In the wake of the two G20 Summits of 2009, there appears now to be a consensus that regulation (or rather re-regulation) of the global capital markets, at least, is paramount. As it was strongly put in the Leader's Statement from the recent Pittsburgh Summit: "we will not allow a return to banking as usual." These fighting words have been accepted, it seems, even among the former so-called 'masters of the (free market) universe', as vividly illustrated by the reports of the then Treasury Secretary, Hank Paulson's bended-knee appeal to House Speaker, Nancy Pelosi, to secure the passage of the initial $700 billion rescue bid, pretty much regardless of whatever regulatory strings were to be attached.