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From Fides ServiceMarch 10, 2009
The negative facts on the progress of the world economy
are as follows: the Gross Domestic Product worldwide is shrinking for the first
time since the end of World War II, according to information released by the
International Monetary Fund, in Dar es Salaam (Tanzania), during the encounter
held with Ministers of Finance and leaders of the central banks of 53 African
nations.
The EPSCO Council at the European Spring Meeting (Council for Employment, Social
Politics, Health, and Consumerism) launched an alert on unemployment in Europe:
by 2010, there will be another 6 million unemployed and the financial crisis
will have heavy consequences on the world economy throughout 2009. In the
meantime, the World Bank – in a document drafted in light of the upcoming G20 of
economic ministers and central bank managers – says that both world trade and
industrial production will suffer a heavy drop this year.
The recession is worldwide, however the economic crisis will show its worst
effects among the poorer populations on the planet, affecting the most
vulnerable among them. This is the prediction made in a report from UNESCO,
presented in recent days. Over 390 million people from sub-Saharan Africa, who
live in conditions of extreme poverty, will pay 18 billion dollars, 46 dollars
per person, in a growth rate that will hit nearly zero in 2009, according to
predictions.
According to the World Bank, developing countries could rack up a financial
deficit between 270-700 billion dollars. It is a statistic that far surpasses
that of the wealthier nations. UNESCO predicts a loss of 20% of the per capita
income among the most desperate populations of Africa.
One particularly worrisome aspect of the economic crisis, according to the UN,
is the increase in the infant mortality rate, which could have a heavy impact on
the development of future generations. The phenomenon, which is mainly being
caused by malnutrition, could affect between 200,000-400,000 children. It could
also have effects on their cognitive skills.
The recession will have a negative impact on cognitive capacity of millions of
them. The recession will have negative effects on the development goals that
have been determined by the international community, and the strongest fiscal
reduction would obviously effect those countries still far from meeting these
goals. Another factor weighing heavily on the poorer nations is their weak
financial systems. The UN estimates that 43 of 48 low-income countries are not
prepared to adopt fiscal policies in favor of the weakest among the population.
Of the 43 above mentioned, 27 do not have room for fiscal maneuvering. Among
them are: Mozambique, Ethiopia, Mali, Senegal, Rwanda, and Bangladesh. Only one
third of the developing nations – says the World Bank – have the necessary
resources to respond to the crisis and prevent an increase in poverty.
The global crisis has come from the wealthy nations, from the lack of control
over their own financial systems, however the worst repercussions will occur in
developing nations and the poorest nations on the planet. The Washington
Institute says that 94 out of 166 developing countries have experienced a
notable decrease in growth; among the most effected sectors were construction
and the manufacturing department, those which had shown the most dynamism up
until now.
A greater economic commitment on the part of the northern hemisphere could
alleviate the situation and avoid a humanitarian catastrophe. However, while the
World Bank is asking that 0.7%-1% of fiscal plans be sent to poorer nations, the
generalized tendency seems to be in the opposite direction: according to a
UNESCO study, the EU is destined to reduce its economic commitments – equal to
0.56% of the GDP, from now until 2010 – due to the pessimistic predictions in
terms of growth. (Mtp)
