by Xinhua writers Yang Lei, Gu Zhenqiu

The United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development is held at the UN headquarters in New York, the U.S., June 24, 2009. The United Nations kicked off a three-day high-level meeting on Wednesday to assess the worst global economic downturn since the Great Depression. (Xinhua/Gu Xinrong) Photo Gallery>>>

    UNITED NATIONS, June 25 (Xinhua) -- In face of the severe world economic recession, cooperation and coordination at the international level are key to the global anti-crisis response, especially for those hard-hit developing countries.

    "The crisis itself highlights a very important concept that the actions of one part of economy can affect other parts of the economy," economist and Nobel laureate Joseph Stiglitz said at the ongoing United Nations Conference on the world financial and economic crisis and its impact on development.

    "Failures in the financial system have affected the real sectors and many countries in the world," Stiglitz noted.

    The current economic downturn, the most serious one since the Great Depression which was triggered by a financial meltdown in the developed countries in late 2008, has taken its toll on every economy in the world.

    The globalization has left no exception for the suffering, whether the country has done right or wrong.

    As the economic turmoil spread around the globe, the developing world has borne the brunt of the crisis, suffering from capital outflows, rising borrowing costs, collapsing world trade, lower commodity prices and falling remittances from overseas workers.

    The World Bank forecast in its latest annual Global Development Finance report that the developing countries' growth will be only 1.2 percent in 2009, compared to 7.7 percent in 2007. But excluding economic powerhouses like China and India, the remaining developing economies are expected to shrink by 1.6 percent.

    "At this critical moment, we must all join our efforts to prevent the global crisis, with its myriad faces, from turning into a social, environmental and humanitarian tragedy," UN General Assembly President Miguel D'Escoto said at the start of the U.N. conference on Wednesday.

    Yet, the least developed countries, which contributed least to the crisis yet are most severely affected, do not have the adequate resources to map out stimulus plans and will require special assistance by the international community, said Sha Zukang, UN Under-Secretary-general for Economic and Social Affairs, in a written interview with Xinhua.

    A coordinated approach -- bringing together not just the G8 or even G20 nations, but the "G192" representing all members of the UN General Assembly -- is needed to pull the world out of the recession, according to the recommendations of the Commission of Experts on Reforms of International Finance and Economic Structures, which was appointed by D'Escoto and chaired by Stiglitz.

    Stiglitz said the commission recommends the creation of a "global economic coordination council," which is designed "not only to help coordinate economic policies, but also to identify lacuna in the global economic arrangements, and to identify deficiencies in the global economic arrangements."

    Another key issue in the global response to crisis is policy coordination across borders. While the crisis is global, the policy is determined at the national level. Risk remains that each country may focus only on its domestic benefits, which poses a threat to the unified efforts to combat the recession as the world economy is highly interdependent today.

    In the international cooperation, much importance should be placed on the policy space for developing countries, Yu Yongding, former Chinese central bank advisor and a senior researcher at the Chinese Academy of Social Sciences.

    "Developing countries should be able to determine what sort of policy they should adopt according to their domestic situation. I think this is very important," Yu said.