Many voices, one message: remember the world’s poorest

Oct 2nd, 2009 5:12 PM UTC
By Jessica Gomez-Duran

A myriad of recent reports remind us that although the global economic crisis is starting to show tentative signs of recovery, low-income countries will suffer the consequences for some time. The World Bank, the United Nations Conference on Trade and Development (UNCTAD), and the MDG Gap Task Force all recently released reports detailing the effects of the global recession on the world’s poorest countries—which are far from over.

In preparation for the G20 summit in Pittsburgh, the World Bank released “Protecting Progress: the Challenge Facing Low-Income Countries in the Global Recession,” a paper urging the G20 to remember the world’s poorest nations. The report estimates that by the end of 2010, 89 million more people are expected to be living in extreme poverty due to the financial crisis. Furthermore, as a result of the recession, developing countries may have an $11.6 million funding gap for health, education, infrastructure, and social protection programs. As a group, low-income countries (LICs) are expected to face about $59 billion in additional financing needs.

The paper recommends coordinated policy action by the G20 and other international actors. They propose that the G20 encourage agricultural development by endorsing the $20 billion pledge made at the G8 Summit in Italy earlier this year, actively support small- and medium-size enterprises and create a crisis response facility to ensure that quick and effective assistance can be provided to LICs following shocks. The World Bank warns that failure to address these needs could not only prevent future progress, but also jeopardise and even reverse the progress achieved so far in many poor countries.

UNCTAD and The MDG Gap Task Force told similar stories. UNCTAD’s 2009 Trade and Development Report looks at how the crisis, which originated in developed countries, is seeping into the developing world. Although some economies are showing signs of recovery, UNCTAD warns that it’s still too early to celebrate. In developing countries, GDP growth is still expected to fall from almost 5.5 percent in 2008 to just over one percent in 2009.

The MDG Gap Task Force, made up of more than 20 UN agencies, the IMF, the World Bank, and the Organization for Economic Cooperation and Development (OECD), released “Strengthening the Global Partnership for Development in a Time of Crisis,” urging world leaders to honor their internationally agreed-upon aid commitments. Although development assistance reached record highs in 2008, the UN estimates that donors are falling $35 billion short per year on the 2005 G8 commitments and $20 billion short per year on aid to Africa.

These reports urge world leaders, fresh from the 2009 G20 Summit in Pittsburgh, to keep the developing world in mind while moving forward. As the global economy begins to turn around, it is necessary to remember that the world’s poorest will still be dealing with the ramifications of the crisis long after the recovery.

-Pooja Gupta

TAGS: Policy News