Developing countries warned on Friday that the global financial crisis could dampen their growth prospects and recommended an international response to prevent "the most difficult situation in years" from worsening.
The Group of 24 poorer countries noted that some advanced economies are slowing markedly and some already are in recession. They suggested a possible spillover effect that could hit their economies.
It is essential, they said, to "address deep-rooted weaknesses in risk management and financial sectors in advanced countries that led to excessive risk-taking and speculation."
The G-24 met Friday before the weekend meetings of the International Monetary Fund and the World Bank. The group includes countries from Latin America, Asia and Africa. It groups such regional economic powers as Brazil, India and South Africa. China attends the semiannual meetings as an observer.
"We need to avoid having a domino effect," said G-24 chairman Jean-Claude Masangu Mulongo, governor of Congo's central bank. "We need a coordinated effort to address the crisis and not have countries just deal with their own crisis but to look at the effect of their actions on their neighbors."
The G-24 communique noted several times the crisis originated in advanced countries, which for years have been telling them how to manage their economies, to open their borders to trade and to promote private-sector development.
They said to reduce developing countries' vulnerability, the IMF and the World Bank need to develop new instruments to help them. The communique urged the IMF to introduce a new liquidity facility and asked the World Bank to slash the time it takes to implement development projects.
The ministers stressed the IMF has an important role to play in forging a multilateral response to the financial crisis.
"Ministers reiterated their call for stronger surveillance of advanced economies, policies and financial systems," the communique said.
