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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