Lula attacks rich nations on crisis

“We need to understand that in the 21st century, after the subprime disaster, after the disaster of the lack of regulation, the financial system needs to be tightly linked, morally and ethically and financially … to the productive sector.”

The subprime crisis erupted when many American mortgage customers defaulted on repayments after taking out high-interest loans.

More than 1.4 million homes have been foreclosed on in the US since the subprime meltdown began in 2007.

‘New concepts’

Alvaro Uribe, the Colombian president, who is also attending the summit, said he agreed that the world’s poor should not pay for a crisis that began in the US.

World leaders should adapt their nations’ economic models following the near collapse of the global financial system accordingly, he said.

In depth

Brazil’s poor hit by global economic turmoil

“We need to have a new concept of capital: Capital that should be used for the construction of social wealth,” Uribe said.

The two-day forum, one of the annual regional meetings hosted by the Swiss-based World Economic Forum, takes place before the Summit of the Americas in Trinidad and Tobago later this week.

Leaders of 34 Western hemisphere nations are expected to gather there to discuss issues including the economic crisis.

Lula said he welcomed the forthcoming attendance of Barack Obama, the US president, at the summit.

He said it was important for Obama to hold talks with Latin American nations as they would be “his partners during the next four years”.