Global Crisis Stalls Help for Poor
WASHINGTON (AP) _ The global financial crisis may stall or reverse improvements in the lives of millions of the world’s poor, the World Bank said Monday in a new report.
The bank also said that financial rescue packages designed to help crisis-hit countries often harm poor people and plunge back into poverty those who had achieved middle-class status.
``A year ago we confidently predicted that the international development goals of halving poverty ... could be met,″ World Bank President James Wolfensohn said in an introduction to the report. ``Now those goals are at risk and we must reshape our strategies,″ he said.
The report, ``World Development Indicators 1999,″ was issued as the bank and its sister institution, the International Monetary Fund, hold their annual spring meetings.
During these sessions, the United States is trying to push its European allies and Japan to do more to get the shaky world economy back on track.
The bank is forecasting that developing countries’ growth this year will decline to 1.5 percent. This contrasts with average growth in these countries, excluding the former Soviet Union, of 5.3 percent in 1991-1997, growth rates that encouraged expectations that living standards would continue to rise in most of the world, the report said.
``However, the financial crisis, has now tempered those expectations and could reverse the gains of many people who had previously migrated from poverty to the ranks of the middle class in the worst-affected countries,″ the report said.
Joseph Stiglitz, the World Bank’s chief economist, said the IMF had to be wary about the effects of its rescue packages. Some programs that help the economy may do so ``at the cost of increased poverty, interrupted education or declining life expectancies,″ he said.