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WB-IMF: Financial crisis turning into human, development crisis

(Xinhua)
Updated: 2009-04-24 23:00

WASHINGTON -- The global financial crisis, the most severe since the Great Depression in 1930s, is rapidly turning into a human and development crisis, warned an IMF-World Bank report released Friday.

The crisis originated in the developed world, but it has spread quickly and inexorably to the developing world, sparing no countries, said the Global Monitoring Report 2009: A Development Emergency.

The crisis is imperiling attainment of the Millennium Development Goals (MDGs) and creating an emergency for development as the poor countries are especially vulnerable, for they "lack the resources to respond with ameliorative actions."

Related readings:  Will Asia use crisis as catalyst for change?  Crisis dampens zeal to go global  IMF: Losses from global credit crisis mounting  Crisis pushes up jobless rate

Most of the eight MDGs are unlikely to be met by 2015, including those related to hunger, child and maternal mortality, education, and progress in combating HIV/AIDS, malaria and other major diseases, the report warned.

It also noted that, although the first goal of halving extreme poverty by 2015 from its 1990 level is still reachable based on current projections, risks abound.

New estimates show that more than half of all developing countries could experience a rise in the number of extreme poor in 2009.

This proportion is likely to be still higher among low-income countries and countries in Sub-Saharan Africa -- two-thirds and three-quarters, respectively.

It is estimated that an additional 55 to 90 million people will be trapped in extreme poverty in 2009 due to the worldwide recession.

The number of chronically hungry people is expected to climb to over 1 billion this year, reversing gains in fighting malnutrition and making the need to invest in agriculture especially urgent.

"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," said John Lipsky, IMF deputy managing director.

The crisis will affect all developing countries over the next two years, through contracting export volumes, lower prices, slowing domestic demand, declining remittances and foreign investment, reduced access to financing and shrinking revenues.