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Friday, December 9, 2022
WASHINGTON, Apr 23 2010 (IPS) - The global economic crisis is projected to hamper progress towards the Millennium Development Goals (MDGs) and will directly impact MDGs related to hunger, child and maternal health, gender equality, access to clean water and disease control, according to a report released Friday by the World Bank and the International Monetary Fund (IMF).
According to the “Global Monitoring Report 2010: MDGs after the Crisis”, the economic crisis will result in 53 million more people remaining in extreme poverty by 2015 than otherwise would have.
“These findings by the IMF and World Bank are a shocking portrait of just how badly the crisis has hit poor countries. This is a wake-up call for the international community,” said Oxfam spokesperson Elizabeth Stuart.
Despite the setbacks in development initiatives, the number of people living in extreme poverty by 2015 is predicted to total around 920 million, a significant reduction from the 1.8 billion people living in extreme poverty in 1990.
The food prices and financial crises in 2008 did serious damage to efforts to combat hunger in the developing world and the report acknowledged that the MDG target of halving the number of people suffering from hunger from 1990 to 2015 seemed increasingly unlikely to succeed.
“The financial crisis was a severe external shock that hit poor countries hard. Its effects could have been far worse were it not for better policies and institutions in developing countries over the past 15 years,” said Murilo Portugal, IMF deputy managing director. “The crisis in the developing world has a potentially serious impact in everyday life since the margin of safety for so many people is so slim in even the best of times.”
Still, the MDG report emphasises that strong growth in emerging market economies and the relatively quick recovery in global trade have boosted GDP growth in developing countries to an estimated 6.3 percent in 2010, a noticeable improvement from the 2.4 percent growth experienced by developing economies in 2009 during the worst parts of the financial crisis.
According to IMF and World Bank data the global population was making good progress in working towards the MDGs before the economic crisis.
“When the crisis hit, many countries had already made considerable progress in reducing extreme poverty. Globally, poverty had fallen 40 percent since 1990, and the developing world was well on track to reach the global target of cutting income poverty in half by 2015,” read the report.
The IMF and World Bank offered estimates for how the crisis may impact measurable MDG indicators.
An additional 55,000 infants may die in 2015 and 260,000 more children under five could have been prevented from dying in 2015 in the absence of the crisis.
Approximately 350,000 more students might not be able to complete primary school in 2015 and 100 million people might not be able to gain access to safe water sources.
The report also emphasised that necessary responses to the crisis, taken by developing countries, will raise policy challenges going forward.
Several developing countries maintained spending levels and expanded fiscal deficits during the crisis in order to support social programmes and maintain domestic demand during the crisis.
This spending has resulted in increased debt ratios for a number of developing countries.
Responding to the necessary steps taken by these developing countries will require donors to follow through on their commitments to increase aid, say the World Bank and the IMF.
“Strong external funding is needed to ensure fiscal sustainability while maintaining key investments in infrastructure and social sectors. Developing countries also need to continue to match external support with domestic reforms to make government spending and service delivery more efficient,” read a World Bank/IMF press release.
More than 150 billion dollars has been committed by multilateral development banks since the beginning of the crisis and the IMF has committed 175 billion dollars to crisis-related needs as of February.
Donors have, so far, fallen short of their earlier commitments.
The OECD’s Development Assistance Committee (DAC) rose by 0.7 percent in 2009 to 119.6 billion dollars but that falls well short of earlier commitments, especially for Sub-Saharan Africa, says the report.
A communiqué from the G20 finance ministers acknowledged the aid commitments which had been made and committed to replenishing both the Inter-American Development Bank, the European Bank of Reconstruction and Development and the African Development Bank.
The G20 also agreed to support full relief of Haiti’s debt by all international financial institutions (IFIs).
The G20’s decision to forgive Haiti’s was widely endorsed by NGOs and aid groups but the group’s unwillingness to commit to a bank tax, as suggested by the IMF and World Bank, to pay for the financial system’s bailout and any future crises received a less enthusiastic response.
“The IMF has made it clear that the burden of this tax should fall on banks in wealthy countries. They were the ones who created the crisis because their regulation is so lax. The IMF has also spelled out that the rates should be lower in emerging markets. Their banks weren’t responsible for the crisis. Rich banks are the culprits here,” said Stuart.
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