Washington, DC — The poverty in developing nations next year will deepen as a result of the attacks against the World Trade Center and the Pentagon, especially in Africa, the World Bank has warned: "About half the additional child deaths worldwide are likely to be in Africa," the World Bank said Monday.
In a statement accompanying the release of a "preliminary assessment" of the economic impact of the September 11 attacks, World Bank President James D. Wolfensohn estimates the number of additional people likely to be living below the poverty line of $1 dollar a day at 10 million because of loss of income from the attacks. He warns, "Many, many more people will be thrown into poverty if development strategies are disrupted."
Already, says the World Bank in its assessment, economic activity is slowing and global trade suffering. Investors are fleeing from developing nations to what they consider to be safe havens.
"The worst hit area will be Africa," said the Bank. Lower growth, falling commodity prices and dramatic drops in tourism could increase poverty for 2-3 million people. "The 300 million poor in Sub-Saharan Africa are particularly vulnerable because most countries have little or no safety nets, and poor households have minimal savings to cushion bad times."
This gloomy assessment is subject to revision, says World Bank Chief Economist Nicholas Stern, but "policy responses have to be swift and somewhat bolder in rich and poor countries." He and the Bank are urging several "crucial" steps:
*Boost foreign aid because capital flows to developing nations are falling sharply
*Reduce trade barriers and use trade as a tool for poverty reduction and development
*More coordination of economic policy among major industrial nations
*Greater effort at building social consensus for continued reforms.
The Bank says it is reviewing its lending instruments and financial resources to determine their best use in the aftermath of September 11. A country-by-country assessment of needs is already underway with "particular attention" being paid to Africa, the Bank says.
