Economic crisis hits global poor
About 53 million more people condemned to poverty after last year’s downturn.
“The financial crisis was a severe external shock that hit poor countries hard,” Murilo Portugal, the IMF deputy managing director, said in a statement.
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“Its effects could have been far worse were it not for better policies and institutions in developing countries over the past 15 years.”
The report said that the fallout would have been more serious had developing countries had sound macroeconomic policies before the crisis not given them room to maintain social safety nets in hard times.
“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.”
Vested interests
Jeremy Batstone Carr, the head of research at Charles Stanley, a UK financial firm, told Al Jazeera that the IMF protectionism was restricting the ability to pull people out of poverty and reduce inequality.
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“The IMF and World Bank have a very strong vested interest in trying to pursue an agenda of globalisation, the ultimate goal of which will be to lift people above the $1.25 a day poverty line,” he said.
“There are considerable concerns about whether there is real globalisation or whether countries around the world concerned about their own economic environments are actually putting protectionist barriers up therefore limiting the scope for globalisation, hence the IMF concern.
“In a very powerless economic recovery, as we have in the West, countries tend to look after themselves and don’t tend to think about the poorest in the world.”
The extra millions condemned to hardship come despite a strong recovery being forecast in the developing countries of Asia, Africa and Latin America.
Indebted world
Aly-Khan Satchu, a financial analyst, told Al Jazeera the developed world “is more indebted than it was after the Second World War” after spending trillions of dollars on stimulating their domestic economies.
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“We have lacked progress and achieved an uneven recovery in the last two years” Aly-Khan Satchu, financial analyst |
“In times of crisis, the developed world has sucked a lot of the liquidity out of the system,” he said.
“In an environment where we had these sorts of lurches in the global economy, those in the fringes suffer the most.
“We have lacked progress and achieved an uneven recovery in the last two years.”
The IMF is forecasting growthof 6.3 per cent for emerging and developing economies this year and 6.5 per cent for 2011, with much of the stimulus coming from Chinese expansion of around 10 per cent, and strong performances by India, Brazil and Indonesia.
Sub-Saharan Africa, the poorest region, is likely to expand 4.7 per cent in 2010 and 5.9 per cent the year after, putting it back on the growth cycle it enjoyed in the years leading up to the crisis.
Africa, however, has still lagged behind Asia in cutting poverty, with extreme hardship rates falling only to 51 per cent in 2005 from 58 per cent in 1990, the report said.
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