In this issue: 1) Crisis Reveals Growing Finance Gaps for Developing Countries
2) Financial Crisis Highlights Need for More Social Safety Nets, Especially Conditional Cash Transfers
3) International Women's Day 2009
4) Blog on World Bank's World Development Report on Climate Change
5) Jobs for a Globalizing World: World Bank Labor Market Policy Core Course
6) Help Us!
7) To Receive this Newsletter Welcome to the one hundred and twenty third issue of the PovertyNet electronic newsletter from the World Bank. This newsletter provides an update of new resources about understanding and alleviating poverty available from PovertyNet, http://www.worldbank.org/poverty, and other websites. Please continue to send suggestions on items to highlight in forthcoming newsletters to povertynet@worldbank.org.
1) Crisis Reveals Growing Finance Gaps for Developing Countries Developing countries face a financing shortfall of $270-700 billion this year, as private sector creditors shun emerging markets, and only one quarter of the most vulnerable countries have the resources to prevent a rise in poverty, the World Bank said. In a paper for next Saturday’s meeting of the Group of 20 finance ministers and central bank governors, the World Bank said that international financial institutions cannot by themselves currently cover the shortfall -- that includes public and private debt and trade deficits -- for these 129 countries, even at the lower end of the range. A solution will require governments, multilateral institutions, and the private sector. Only one quarter of vulnerable developing countries have the ability to finance measures to blunt the economic downturn, such as job-creation or safety net programs. “We need to react in real time to a growing crisis that is hurting people in developing countries,” said World Bank Group President Robert B. Zoellick. “This global crisis needs a global solution and preventing an economic catastrophe in developing countries is important for global efforts to overcome this crisis. We need investments in safety nets, infrastructure, and small and medium size companies to create jobs and to avoid social and political unrest.” The global economy is likely to shrink this year for the first time since World War Two, with growth at least 5 percentage points below potential. World Bank forecasts show that global industrial production by the middle of 2009 could be as much as 15 percent lower than levels in 2008. World trade is on track in 2009 to record its largest decline in 80 years, with the sharpest losses in East Asia. The financial crisis will have long-term implications for developing countries. Debt issuance by high-income countries is set to increase dramatically, crowding out many developing country borrowers, both private and public. Many institutions that have provided financial intermediation for developing country clients have virtually disappeared. Developing countries that can still access financial markets face higher borrowing costs, and lower capital flows, leading to weaker investment and slower growth in the future. The paper said that 94 out of 116 developing countries have experienced a slowdown in economic growth. Of these countries, 43 have high levels of poverty. To date, the most affected sectors are those that were the most dynamic, typically urban-based exporters, construction, mining, and manufacturing. Cambodia, for example, has lost 30,000 jobs in the garment industry, its only significant export industry. More than half a million jobs have been lost in the last three months of 2008 in India, including in gems and jewelry, autos and textiles. Many of the world’s poorest countries are becoming ever more dependent on development assistance as their exports and fiscal revenues decline because of the crisis. Donors are already behind by around $39 billion on their commitments to increase aid made at the Gleneagles Summit in 2005. The concern now is that aid flows will become more volatile as some countries cut their aid budgets while others reaffirm aid commitments, at least for this year. To view the paper entitled Swimming Against the Tide: How Developing Countries Are Coping with the Global Crisis, go here: http://siteresources.worldbank.org/NEWS/Resources/swimmingagainstthetide-march2009.pdf For the World Bank website on the financial crisis, go here: http://www.worldbank.org/html/extdr/financialcrisis/
2) Financial Crisis Highlights Need for More Social Safety Nets, Including Conditional Cash Transfers Demand for well-designed safety net and cash transfer programs to assist poor families is growing across the world, as 2009 develops into a year of tough economic challenges-especially for households already hit by the recent food and fuel crises, and for governments concerned that the financial crisis could turn into a humanitarian one, according to a new World Bank report released in February. The report, Conditional Cash Transfers: Reducing Present and Future Poverty, evaluates CCT programs that offer qualifying families cash in exchange for commitments such as taking babies to health clinics regularly or keeping children in school. It finds that these programs—where the responsibility for breaking out of poverty is shared by the state and poor households—can reduce poverty both in the short and long term, particularly when supported by better public services. In response to the food and financial crisis, the World Bank expects to lend about $2.4 billion this year to start or expand CCT operations in Bangladesh, Colombia, Kenya, Macedonia, Pakistan, and the Philippines. Total World Bank lending support for CCT operations now covers 13 countries, with technical support to both national governments and donors. After early successes in South Asia and Latin America, CCT programs are now found on every continent. They operate in more than two dozen developing countries, as well as in several developed countries, including the United States. In countries such as Mexico and Brazil, CCT programs were introduced as part of larger efforts to make safety nets more effective, replace badly targeted subsidies, or integrate smaller programs. Colombia’s nationwide Familias program has generated important and positive evaluation results and has received sustained support from the World Bank. CCTs have also grown tremendously within countries. Mexico’s Progresa began in 1997 with 300,000 households; its successor Oportunidades now reaches 5 million households. Positive evaluations by researchers encouraged this scaling up. In economic terms, the program’s transfers account for about one-fifth of the consumption of the median recipient household. Go here for more information: http://go.worldbank.org/QWGMVSFRA0
3) International Women’s Day 2009 International Women’s Day on March 8, 2009, is an opportunity to remind the world of women’s economic, political and social achievements. Gender equality is crucial for the development process and the achievement of the Millennium Development Goals (MDGs). Despite the progress that has been made, women represent 60 percent of the world’s poorest, less than 16 percent of the world’s parliamentarians, two-thirds of the world’s illiterate and, both in times of armed conflict and behind closed doors at home, they are still systematically subjected to violence. Yet, stories of women show resilience, strength and courage. They are key players in democratic governance, poverty alleviation, crisis prevention, environment protection and response to HIV/AIDS. |
This UNDP site sponsored contains stories on the challenges women face throughout the world: http://content.undp.org/go/newsroom/2009/march/international-womens-day/international-womens-day-special-faces-of-strength-and-courage.en This World Bank press release notes that women in 34 countries are increasingly vulnerable to the financial crisis. For more details, go here http://go.worldbank.org/BLCC8JCFS0
4) Blog on World Bank’s World Development Report on Climate Change This blog is hosted by the authors of the World Bank’s upcoming World Development Report 2010, “Development in a Changing Climate”. It is a forum to get broad-based input on fundamental questions relating to climate change and development. Looking at both the challenges and the opportunities presented by climate change, the WDR 2010 will tackle three questions: 1. What does climate change mean for development?
2. What does development mean for climate change?
3. What does all this mean for policy? Climate change is one of many challenges facing developing countries – but unless it is tackled soon, it will reverse development gains. Developing countries simply cannot afford to ignore climate change; nor can they focus on adaptation alone. One objective of the WDR is to inform development policy: climate change does represent a changing climate for development. Climate-smart development, which incorporates adaptation and mitigation objectives, is needed and can be achieved. A rethinking of development policy can help to meet these challenges and to exploit the new competitive landscape created by climate change. A second objective of the WDR is to take a politically realistic, how-to approach, and contribute to emerging knowledge: how should development policy be designed in a greenhouse world? But reaching a solution to climate change that is adequate, achievable and acceptable will also require reworking climate policy, especially as it relates to finance and innovation, so as to address the substantial concerns of developing countries. Further, rich countries will need to take the lead on mitigation efforts. A third objective of the WDR is to inform climate policy: the integration of development realities into climate change agreements will be essential to their success. Go here for the blog: http://climatechangeblog.worldbank.org/gathering-clouds-climate-change-or-economic-recession
5) Jobs for a Globalizing World: World Bank Labor Market Policy Core Course “Jobs for a Globalizing World: Labor Market Policy is a two week course offering a unique learning experience on how employment is being transformed in today’s rapidly changing, globalizing environment. The course identifies key labor market challenges within the context of overall poverty reduction and other economic and social development goals, and explores what policy makers and others can do about them. It builds on the latest research findings by the World Bank and other academic and research institutions, as well as on practical lessons learned from country experiences. The content of the course will focus specially on developing and transition countries. The course will feature parallel sessions, focusing separately on labor issues in low-income and middle income countries. This structure will allow a more in-depth exploration of the policy options for each setting. Participants will also have the opportunity to present and discuss challenging labor market issues in their own country, and work toward solutions with other participants and experts. For information on this course, go here: http://go.worldbank.org/EMQCO79SU0
6) Help Us The PovertyNet website needs your input to continue to grow. Send information about new web resources, research, data or events related to poverty alleviation, as well as your suggestions for improvements to the web site and this newsletter to povertynet@worldbank.org.
Thank you!
The PovertyNet Team
povertynet@worldbank.org
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