GLOBAL ECONOMIC CRISIS AND THE MILLENNIUM DEVELOPMENT GOALS

PREAMBLE: For this issue we have selected a recent UN News Release that addresses global consequences of the greed and corruption in the financial industry. While almost all people have been affected by the economic crisis, the World Bank states that the crisis is set to drive 53 million more people into poverty in 2009, seriously threatening the prospect of achieving the Millennium Development Goals.

ECONOMIC CRISIS TO DRIVE MILLIONS INTO POVERTY IN 2009
13 February 2009 – The spreading global economic crisis is set to trap up to 53 million more people in poverty in developing countries this year on top of the 130-155 million driven into poverty in 2008 by soaring food and fuel prices, bringing the total of those living on less than $2 a day to over 1.5 billion, according to the World Bank.

The new forecast highlights the serious threat to achieving the United Nation's Millennium Development Goals (MDGs), which aim to slash poverty, hunger, infant and maternal mortality, and lack of access to health care and education, all by 2015. Preliminary estimates for 2009 to 2015 forecast that an average 200,000 to 400,000 more children a year may die if the crisis persists, making a total of 1.4 to 2.8 million over the period.

“The global economic crisis threatens to become a human crisis in many developing countries unless they can take targeted measures to protect vulnerable people in their communities,” World Bank President Robert B. Zoellick said on the eve of the Group of Seven (G7) finance ministers' meeting of leading industrial countries in Rome on Saturday, which he will attend.

“While much of the world is focused on bank rescues and stimulus packages, we should not forget that poor people in developing countries are far more exposed if their economies falter. This is a global crisis requiring a global solution. The needs of poor people in developing countries must be on the table.”

New estimates for 2009 suggest that lower economic growth rates will trap 46 million more people on less than $1.25 a day than was expected prior to the crisis, for a total of an extra 53 million trapped on less than $2 a day, on top of the 1.37 billion before the current crises.

A World Bank policy note issued in the run up to the G7 meeting reports that almost 40 per cent of 107 developing countries were highly exposed to the effects of the crisis and the remainder were moderately exposed, with less than 10 percent facing little risk.

It is critical for exposed countries to finance job creation, delivery of essential services and infrastructure, and safety net programmes for the vulnerable, according to the note, entitled The Global Economic Crisis: Assessing Vulnerability with a Poverty Lens.

Yet three quarters of these countries cannot raise funds domestically or internationally to finance programmes to curb the effects of the downturn. One quarter of them also lack 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.

Mr. Zoellick recently called for the establishment of a Vulnerability Fund in which each developed country would devote 0.7 per cent of its stimulus package to aid poorer countries set up safety net programmes, invest in infrastructure, and support small and medium-sized enterprises and microfinance institutions.

Source: UN News Service. http://www.un.org/apps/news/story.asp?NewsID=29897&Cr=financial&Cr1=crisis