Global financial crisis creates development emergency

Monday, 27 April 2009, 03:11 Hrs
Printer Print Email Email
Washington: The widening global financial crisis has created a development emergency, preventing many countries from achieving targets on reducing hunger, child mortality and major diseases, the International Monetary Fund (IMF)and World Bank have warned in a report.

The Global Monitoring Report, released Friday on the eve of IMF and World Bank spring meetings in Washington, said it was unlikely that the eight Millennium Development Goals (MDGs), an ambitious programme adopted by governments in 2000, would be met by the target year of 2015.

"The triple jeopardy of the food, fuel and financial crises is pushing many poor countries into a danger zone, imposing rising human costs and imperiling development prospects," the report said.

In addition to reducing poverty, the MDGs call for halting the spread of HIV/AIDS, ensuring gender equality, providing universal primary education to all children, ending maternal and child mortality and stopping the degradation of the environment.

"With simultaneous recessions striking all major regions, the likelihood of painfully slow recoveries in many countries is very real, making the fight against poverty more challenging and more urgent," warned John Lipsky, IMF deputy managing director.

He described the financial meltdown as the "most serious crisis of confidence since the Great Depression" and said "conditions in developing countries are deteriorating dramatically".

According to new estimates, an additional 55 to 90 million people will be trapped in extreme poverty - defined as those who live on less than $1.25 a day - in 2009 because of the global recession. The number of chronically hungry people is expected to

climb to more than one billion this year or about one-sixth of the world's population, reversing gains in fighting malnutrition, the report said.

Developing countries will be particularly hard hit as exports contract, commodity prices fluctuate wildly, and remittances and foreign investment shrink, with growth in emerging economies projected to fall to 1.6 percent in 2009, from an average of 8.1 percent in 2006-2007, according to new IMF projections.

On Wednesday, the IMF offered its most dire picture yet of a world that is plunging into by far its deepest recession since World War II, predicting that the global economy will shrink by 1.3 percent in 2009 and recover to only 1.9-percent growth in 2010.

"Worldwide, we have an enormous loss of wealth and financial stability," said World Bank chief economist Justin Yifu Lin. "Millions more people will lose their jobs in 2009, and urgent funding must be provided for social safety nets, infrastructure, and

small businesses in poor countries, for a sustainable recovery."

Lipsky called on wealthier nations to take steps to protect the poor and follow up on their commitments to increase aid to low income countries. The report said increased spending in the private sector would alleviate some of the negative impact on the poor.

"Foreign aid to poor countries stands at $120 billion - nowhere near enough, and a drop in the ocean compared to the $8.4 trillion recently mobilised to prop up ailing banks," said Bernice Romero of humanitarian aid group Oxfam.

"At $173 billion, the American Insurance Group (AIG) alone has received $50 billion more than total global aid levels ... poor people need a bail-out of their own."

Citizens' groups from across the United States planned to disrupt the IMF-World Bank meetings over the weekend with street protests, traffic blockades and a five-km "Run on the Bank," voicing their opposition to financial policies they say disregard human rights and environmental concerns.

"We're demanding an economy that works for all of us," said Rev Graylan Hagler of Ministers for Racial, Social and Economic Justice. "For Latin America, for Africa, for the Middle East, for Asia ... we must stop the IMF and the World Bank from expanding their neoliberalist agenda. We are convening to resist this agenda and plan new ideas for a better world to come."
Source: IANS
Fossil Group sells smartwatch
Global watch and accessories maker Fossil Group has announced to sell its smartphone technolog..
GST rate cut to spur Bengaluru
The realty market in India's tech hub is set to grow as lower Goods and Services Tax (GST) rate..
SpiceJet plans aggressive
Budget passenger carrier SpiceJet plans to aggressively expand its international networks to fl..
Ola raises Rs 400 cr for electric
Leading ride-hailing cab aggregator Ola on Friday said it raised Rs 400 crore from its early in..