By Professor Ngaire Woods
Presenter, Analysis, BBC Radio 4
In the frenetic political preparations ahead of the forthcoming G20 summit, there has been much talk of international co-operation to tackle the financial crisis.
But if you talk to insiders in the policy debate, you quickly realise there are two rival conversations going on.
One is about what rich countries need to do to stabilise their financial systems. The other, trying to make itself heard, is about the very different - but more urgent - needs of the world's poorest people.
Although the crisis originated elsewhere, many developing countries are facing a catastrophic loss of income on several fronts. Aid flows are declining as donor governments tighten up.
Remittances - money sent home by those who migrate to find work - has been worth more than aid in recent years, but has now gone into sharp decline.
In Mexico, remittances flows have even reversed, as families have to send money to support relatives in the US who have lost their jobs.
Even worse is the loss of export revenue. Here Africa has been especially affected.
"A lot of what is happening in the poorer countries is happening below the radar screen," South Africa's finance minister Trevor Manuel told me.
His neighbour Botswana, prospering until recently, depends on diamonds for its main export revenues, but has lost 90% of that revenue since last year.
In South Africa, meanwhile, he says "you can go to our ports and find iron ore and manganese, aluminium piled up, not going anywhere".
"And if you don't have the revenues", he adds, "you can't deliver all of the services".
That means teachers, nurses, police will lose jobs, children will not go to school. And whole societies will be undermined.
"I fear for social stability, I fear for political stability, and it is happening already" says Donald Kaberuka, head of the African Development Bank, who helped rebuild his country, Rwanda, after the 1994 genocide.
Return of protectionism?
There are serious and obvious risks for wealthy countries here. The trafficking of drugs, and of people, piracy, and conflict, all flourish where governments are insecure and unstable.
But whatever the talk of a united global response, there is little sign of it in practice.
Take protectionism. No-one is admitting in public that they are turning their backs on free trade.
"Everyone's rhetoric is very good," says Minouche Shafik, permanent secretary at the UK's Department for International Development (DFID).
"But the reality of some decisions being made is very worrying."
And it is precisely the emergency measures being taken in richer countries that can harm those most vulnerable. State subsidies to favoured industries or "encouraging your banks to lend at home or to consolidate at home" are both "protectionist", she adds.
"It is a classical problem where individual nations looking after their own interests end up damaging the collective."
Just how damaging the banks' new priorities are is clear as soon as you ask those struggling with the financial crisis in poorer countries.
There had been growing optimism as some countries began to stabilise in recent years and grow their economies. They were ready to become less dependent on aid, and apply for loans on the international market.
Now, no-one wants to lend to them. So, unlike Britain or the US, they cannot respond to the crisis with a massive fiscal stimulus, says economist Amar Bhattacharya, who represents developing countries in the International Monetary Fund (IMF) and World Bank.
"They cannot expand money for social safety nets or investment. They can't do anything".
Borrowing more from the IMF may be proposed for such countries at the G20 summit. But IMF loans are tough. They work very differently to the stimulus packages being used in wealthy countries.
And the IMF has limited money - so when countries go to it, the Fund lends them only part of what they need. The borrower must produce the rest by making severe cut-backs. That can have devastating consequences in poor countries - as seen in the East Asian crisis ten years ago.
So some countries such as Indonesia, says Amar Bhattacharya, insist "it is not politically feasible for us to come to the IMF because of the stigma".
While poorer countries, facing the most urgent economic and political challenges, have few options and resources, rich countries boast of spending their way out of crisis.
They say they will not use protectionism but their plans to subsidise their own banks and industries risk just this.
All the warning signs suggest that the financial crisis has produced a tsunami heading directly towards some of the most vulnerable parts of the world. It is not of their making, and yet they have the least capacity to deal with it.
Professor Ngaire Woods presents Analysis: Financial Tsunami on BBC Radio 4 on Thursday 19 March 2030 GMT and Sunday 22 March at 2130 GMT.
Story from BBC NEWS:
Published: 2009/03/20 00:00:39 GMT