Feb 15, 2009

Human toll of the financial crisis

NEW estimates for 2009 released by the World Bank group suggest that lower economic growth rates will trap 46 million more people on less than 1.25 dollars a day than was expected prior to the spreading global economic crisis.
An extra 53 million will stay trapped on less than 2 dollars a day and this is on top of the 130 to 155 million people pushed into poverty in 2008 because of soaring food and fuel prices, the group says.
The World Bank said almost 40 percent of 107 developing countries were highly exposed to the poverty effects of the crisis and the remainder was moderately exposed, with less than 10 percent facing little risk. Pakistan has been placed among the 43 countries most exposed to poverty risks. Fourteen countries have been placed in the category of high poverty.
In a policy note, entitled ‘The Global Economic Crisis: Assessing Vulnerability with a Poverty Lens’ issued in the run up to the ‘Group of Seven’ finance ministers meeting on Saturday, World Bank says the spreading global economic crisis is trapping up to 53 million more people in poverty in developing countries and, with child mortality rates set to soar, poses a serious threat to achieving internationally agreed targets to overcome poverty.
These new forecasts highlight the serious threat to the achievement of the UN Millennium Development Goals (MDGs), which set specific targets by 2015 to overcome poverty. The new research shows that the sharply lower economic growth rates will significantly retard progress in reducing infant mortality.
Preliminary estimates for 2009 to 2015 forecast that an average 200,000 to 400,000 more children a year may die, a total of 1.4 to 2.8 million, if the crisis persists.
The policy note said it was critical for exposed countries to finance job creation, the delivery of essential services and infrastructure, and safety net programs for the vulnerable. Yet three quarters of these countries cannot raise funds domestically or internationally to finance programs to curb the effects of the downturn. One quarter of the exposed countries also lacked the institutional capacity to expand spending to protect vulnerable groups.
The note urges financial support in the form of grants and low or zero interest loans for these countries.

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