- The World Bank has warned that efforts
to improve health, education and the living standards of the world's poor
- 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
- 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.