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As news of the global economic slump becomes more dire by the day, the latest World Bank statistics suggest that 53 million more people could fall into $2 a day poverty in 2009 as a direct result of the financial crisis - or up to 100 million more people according to the UN Millennium Campaign. 

Crisis 'to trap 53m in poverty' - BBC News

Crisis hitting poor hard in developing world, World Bank says - World Bank

Anti-poverty campaigners appeal to G7 - Financial Times

Crisis could push 140 million Asians into poverty: ILO - AFP

16th February 09 - STWR 

Crisis 'to trap 53m in poverty'

12th February 09 - Steve Schifferes, BBC News

About 53 million people in developing countries will remain poor because of the world economic slowdown, the World Bank has said.

The Bank says the downturn will reverse many of the gains made in reducing poverty in developing countries.

It estimates that 40% of the world's 107 developing countries are "highly exposed" to the global crisis.

And it calls on the rich countries to devote 0.7% of their bail-out packages to help the poor in developing nations.

Poverty line

The global crisis is likely to keep 46 million more people below the absolute poverty line of $1.25 per day, and another seven million under $2 per day, compared with previous World Bank forecasts for 2009.

An earlier version of this story incorrectly stated that 100 million more people would remain poor.

"The global crisis threatens to become a human crisis in many developing countries unless they can take targeted measures to protect vulnerable people," said World Bank president Robert Zoellick.

"While much of the world is focused on bank rescues and stimulus packages, we should not forget that poor people are much more exposed if their economies falter."

The World Bank says the crisis will also delay progress towards reducing infant mortality, which could see 200,000-400,000 more children a year die if the crisis persists.

These developments will undermine the plans agreed by the UN to reach the world poverty targets agreed in the Millennium Development Goals by 2015.

The food and fuel price increases in 2008 pushed another 130-150 million poor people into poverty, the Bank estimates.

G7 meeting

The report comes as the G7 finance ministers - representing the world's richest nations - are meeting in Italy to discuss measures to restore confidence to the global financial system.

The US Treasury Secretary, Timothy Geithner, will be attending a G7 meeting for the first time, and may give details of the new measures planned by the Obama administration to deal with the crisis.

World economic growth is set to fall to just 0.5% this year, its lowest rate since World War II, the International Monetary Fund (IMF) warned last month.

The World Bank says that three-quarters of the developing countries most exposed to the crisis - many of them in sub-Saharan Africa - cannot raise the funds they need to curb the effects of the downturn.

The proposed "vulnerability fund" would help by funding safety net programmes for the poor, ensuring that investments in vital infrastructure go ahead, and supporting small enterprises and banks.

The Bank's private finance arm, the IFC, wants to invest $3bn in recapitalising distressed banks, and, along with Germany, has just pledged $500m to support micro-finance institutions which lend to the very poor.

Mr Zoellick says that "poor people in Africa should not pay the price for a crisis that originated in America".

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Crisis Hitting Poor Hard in Developing World, World Bank says: Ahead of G7 meeting, research highlights growing risks to the poor

12th February 09 - World Bank News

The spreading global economic crisis is trapping up to 53 million more people in poverty in developing countries and, with child mortality rates set to soar, poses a serious threat to achieving internationally agreed targets to overcome poverty, the World Bank Group said.

New estimates for 2009 suggest that lower economic growth rates will trap 46 million more people on less than $1.25 a day than was expected prior to the crisis. An extra 53 million will stay trapped on less than $2 a day. This is on top of the 130-155 million people pushed into poverty in 2008 because of soaring food and fuel prices.

These new forecasts highlight the serious threat to the achievement of the U.N.’s Millennium Development Goals (MDGs), which set specific targets by 2015 to overcome poverty. The new research shows that the sharply lower economic growth rates will significantly retard progress in reducing infant mortality. Preliminary estimates for 2009 to 2015 forecast that an average 200,000 to 400,000 more children a year, a total of 1.4 to 2.8 million, may die if the crisis persists.

“The global economic crisis threatens to become a human crisis in many developing countries unless they can take targeted measures to protect vulnerable people in their communities,” said World Bank Group President Robert B. Zoellick, who will be attending the meetings on Saturday. “While much of the world is focused on bank rescues and stimulus packages, we should not forget that poor people in developing countries are far more exposed if their economies falter. This is a global crisis requiring a global solution. The needs of poor people in developing countries must be on the table.”

In a policy note issued in the run up to the Group of Seven finance ministers meeting on Saturday, the World Bank said almost 40 percent of 107 developing countries were highly exposed to the poverty effects of the crisis and the remainder was moderately exposed, with less than 10 percent facing little risk.

The policy note, entitled “The Global Economic Crisis: Assessing Vulnerability with a Poverty Lens”, said it was critical for exposed countries to finance job creation, the delivery of essential services and infrastructure, and safety net programs for the vulnerable. Yet three quarters   of these countries cannot raise funds domestically or internationally to finance programs to curb the effects of the downturn. One quarter of the exposed countries also lacked the institutional capacity to expand spending to protect vulnerable groups. The note urges financial support in the form of grants and low or zero interest loans for these countries.

Zoellick has recently called for the establishment of a “Vulnerability Fund” in which each developed country devoted 0.7% of its stimulus package to the fund. Three priority areas for the Vulnerability Fund are: safety net programs, infrastructure investments, and, support for small and medium-sized enterprises and microfinance institutions.

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Anti-poverty campaigners appeal to G7

14th February 09 - Guy Dinmore, Financial Times

While G7 finance ministers and central bankers deliberated in Rome over how to deploy resources to rescue their crumbling economies and financial systems, UN and other agencies were there to remind them that global poverty was on the rise again.

“The numbers of hungry and poor are increasing,” warned Lennart Bage, president of the International Fund for Agricultural Development (Ifad), noting that the long downward trend in the ranks of poverty had been reversed, partly due to continuing high prices of food and a fall in remittances.

Governments had to invest more in making agriculture more productive, he told the FT after addressing ministers on food security, reminding them that global food production needed to increase by 50 per cent over the next 20 years.

Grain reserves are falling. “Seven out of the past nine years we have consumed more than we produced,” he added.

Investing in agriculture appears not to be a high priority of the wealthier nations represented in Rome at the weekend but 70 per cent of jobs in some African and Asian developing countries were in the agriculture sector, he noted.

The UN Millennium Campaign – anti-poverty activists -- said it was estimated that the number of people living on less than $1 a day could rise by 40m and those on less than $2 a day by 100m as a direct result of the financial crisis. Although outside the conference the group lobbied ministers to create a “vulnerability fund” for poorer countries, to spell out their plans to deliver on aid commitment and avoid protectionism.

The Campaign says the economic crisis must not be used as an excuse by wealthier nations to cut their aid programmes. It also urged them to cut trade-distorting agricultural subsidies.

Mr Bage said the session on food security had been “very serious, very focused”.

Judging by the final communiqué of the G7 ministers, the anti-poverty movement has its work cut out. A one-sentence reference to poorer economies said: “The G7 also stresses the need to support emerging and developing countries’ access to credit and trade financing and resume private capital flows, and is committed to explore urgently ways, including through multilateral development banks, to enhance this support.” 

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Crisis could push 140 million Asians into poverty: ILO

18th February 09 - AFP

More than 140 million people could be plunged into poverty and 23 million lose their jobs in Asia this year as the global financial crisis batters the region, according to a study released Wednesday.

The crisis could also slow rural-to-urban migration, with many facing the prospect of returning to low-paid agricultural jobs as factories and firms lay off workers, the International Labour Organisation (ILO) report said.

And as unemployment rises, it is imperative for countries in the region to use fiscal stimulus packages for safety nets to prevent widespread social unrest from erupting, officials said.

"A dramatic increase in working poverty of more than 140 million people by 2009 is projected under this scenario, representing regression of the Asia and Pacific region to a working poverty rate of 2004," the study said.

"These projections are not just numbers, they carry with them a real risk that children may be forced to withdraw from school in order to work and support their families," it said.

It said the region's robust growth in the past was not matched by "broad-based gains in real wages," leading to sharp inequalities in many countries.

"The substantial growth slowdown taking place is likely to lead to stagnant or falling real wages, with the potential for increased incidences of wage related disputes," the study said.

ILO regional director Sachiko Yamamoto noted the situation was quickly evolving "into an employment and social crisis."

"Its impact is deeply felt in both industrialised and developing countries in Asia," she told senior policy makers from 11 countries at a meeting in Manila, stressing that the downturn's "magnitude and speed has been astounding."

The region too is at the tipping point of seeing social unrest explode into the streets, as the jobless and marginalised demand greater government action.

"That prospect is a real one, therefore the social partners should be included in policy discussions in order to make sure that the most vulnerable and affected people are given the central attention," Yamamoto said.

Migrant workers with short-term contracts as well as women working in small and medium sized factories and firms are particularly vulnerable, she said.

"From India to China to Vietnam, large numbers of internal migrants have lost their jobs, generating a reverse migration to the countryside in search of rural employment," Yamamoto said.

An average of 10 percent economic growth in China over the past 25 years, long considered the engine of growth for Asia still leaves "a large jobs shortfall" in urban areas, the ILO said.

It said the employment challenge there "still remains considerable."

Young people in the region meanwhile will also find opportunities dwindling, while children of poor families may be forced to quit school as incomes fall, she said.

The report said that as Asia moves to spend about 3.9 percent of its gross domestic product on stimulus packages, there is also a need to protect employment and support household purchasing power.

Governments should also spend on schools, hospitals and healthcare to mitigate the impact of the crisis while also looking at ways to boost worker skills for longer-term productivity, it said.

The Asian Development Bank's vice president for sustainable development, Ursula Schaefer-Preus, said any stimulus packages should include job creation and infrastructure needs that will most benefit the poor.

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