Brazil's president puts West on warning about 'spicy G20'

Brasilia: British Prime Minister Gordon Brown was told to expect a "spicy" G20 summit in London this week amid anger in the developing world over the financial crisis.

Brown, who is in Brazil for talks, pledged to help secure a $100 billion (Dh367 billion) scheme to underwrite credit to boost trade with the Third World. However, the announcement was overshadowed by an outspoken attack on the West by the President of Brazil, Luiz Inacio Lula de Silva.

He said the financial crisis was not caused by any "black person" or "poor person" and called on Western nations to pay the costs of solving the meltdown.

"This was a crisis fostered and boosted by the irrational behaviour of people who are white and blue-eyed," he said. "Before the crisis it looked like they knew everything about economics. And now they have demonstrated they don't know anything about economics... These were people who appeared to be gods of wisdom."

Lula said Brazil and other countries were being unfairly penalised, with the poor bearing the brunt. Brazil's exports have slumped and businesses are unable to obtain credit. "Brazil has been highly responsible in terms of regulating our financial system," he said at a press conference alongside Brown at the presidential residence in Brasilia, the capital.

"The part of humanity that is responsible should pay for the crisis," Lula said, calling on Western nations not to limit immigration during the recession and make "victims" of the poor.

He criticised plans by President Barack Obama and Brown to bail out banks by buying or insuring their so-called toxic assets. The comments were embarrassing for Brown and he looked uncomfortable alongside the Brazilian leader, who put Western leaders on notice to expect a "spicy" summit.

Brown met Lula to discuss ways of boosting world trade, which has slumped by 25 per cent in the wake of the credit crisis. The British leader pledged to set up a scheme that would underwrite credit agreements for exporters in poorer countries. It would involve Western governments and organisations such as the World Bank alongside private financial institutions. "Exports worldwide are expected to fall for the first time in 30 years," he said.

"We have to act on trade. It is absolutely vital if we are going to move forward from the recession that world trade resumes," Brown said also sounding a warning against the introduction of protectionist policies.

Meanwhile, officials played down a row over the European Union presidency's description of US economic policy as the "road to hell". Diplomats are trying to find suitable words for a G20 summit communique that papers over a deep disagreement between the EU and US over strategy to deal with the economic crisis.

A spokesman for the European Commission played down the undiplomatic language used by the Czech Republic's Mirek Topolanek, the current presidency holder.