How will eurozone downfall affect the world’s poorest?

The deepening crisis in Europe is bad news for developing countries, especially if it leads to a split of the eurozone.

Aid campaign group Oxfam International issued this warning ahead of a meeting of the world’s top 20 economies June 18-19 in Los Cabos, Mexico. The organization urged the Group of 20 countries to ensure the euro crisis will not derail global development efforts.

According to Oxfam, a crisis-induced breakup of the eurozone could cost the world’s least developing countries, mostly in sub-Saharan Africa, up to $30 million in lost foreign investment and trade. This is equivalent to almost a quarter of total official development aid spent every year.

“A collapse of the eurozone would exacerbate the problems already facing low-income countries, including food shortages, failing aid and reduced capital flows as a result of the economic crisis,” Oxfam says.

In addition to preventing the European financial crisis from affecting development efforts in Africa, Oxfam called on the G-20 to fix the global food system, improve tax transparency, boost inclusive and equitable growth, and introduce a carbon price on international shipping. Further, Oxfam reiterated its call for the imposition of a tax on international financial transactions.

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About the author

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    Ivy Mungcal

    As senior staff writer, Ivy Mungcal contributes to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.