20 bln for war?
Bleak prospect for world's
poor
The financial crisis in Indonesia made poverty rates shoot up
dramatically
The World Bank has warned that efforts to improve
health, education and the living standards of the world's
poor are faltering.
In its annual report on the "World Development
Indicators", the bank said the gains of many people who
had escaped from poverty in recent years could be
erased in the aftermath of the Asian economic crisis.
Plummeting currencies, for example, have sent food
prices sky-high, and buying food accounts for a large
proportion of the spending of poor families.
If the World Bank's
predictions are correct, then
decades of progress in
improving social conditions in
the developing world could
stall.
At the same time the report
provides a counterpoint to a
survey by the International
Monetary Fund (IMF), which
suggested that the
international financial crisis
could be over.
That may indeed be the case, but according to the
World Bank the poor will have lost out.
Goals 'at risk'
The World Bank's chief economist, Joseph Stiglitz, for
example agrees that the financial markets have calmed
down. But he says that "we should keep our focus on
what really matters, which in my mind is our statistics
like unemployment, incomes, wages, poverty."
"Not exchange rates. People don't live off interest rates
or exchange rates, they don't eat interest rates or
exchange rates", he said.
His boss, World Bank
president James
Wolfensohn, fears a dramatic
reversal for the prospects of
poor people: "A year ago we
confidently predicted that the
international development
goals of halving poverty,
cutting infant and child
mortality by two-thirds and
enrolling all children in
primary education could be
met."
"Now those goals are at risk
and we must draw on the lessons of recent experience
to help us reshape our strategies for the future."
In 1990-97, according to the report, East and South Asia
were achieving sufficient economic growth to reduce
poverty by half by 2015.
In the wake of the crisis only South Asia and China are
expected to make it. Countries like Thailand and
Indonesia are unlikely to make the cut.
Part of the problem?
Together with the IMF, the World Bank has been
accused of being partly to blame for the plight of the
world's poor.
Critics say that their economic policies designed to
contain the economic crisis have actually increased
poverty.
Mr Stiglitz now says that the bank would have to be
"more cautious of policies that 'save the economy' ".
A policy's success should not only be measured by
whether it can deliver economic growth, but whether it
can protect the poor as well, he said.
Aids impact
But it is not only turmoil on the financial markets that is
threatening the world's poor.
The report also identifies the continuing spread of HIV
infection and Aids as reducing people's expected life
span by five to 10 years in some countries in Africa.
The bank says it is unusual for a single disease to have
such a striking effect on life expectancy.
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