Economic crisis slows poverty reduction efforts: IMF and WB

WASHINGTON, April 24: Global economic crisis has slowed the global efforts to fight against poverty as the crisis has weakened developing countries´ capacity to invest on critical social sectors like health and education, stated the Global Monitoring Report 2010 released jointly by the World Bank and International Monetary Fund on Friday.



However, the report in an optimistic tone underlined that the world is still in the right track to achieve major targets but not all set by the Millennium Development Goals (MDGs) and warned that the challenge would be much bigger for the least developed countries (LDCs) where economic recovery is expected to take a longer time. [break]



The global economic crisis has slowed the pace of poverty reduction in developing countries, and is hampering progress toward the other MDGs, said the report. It further stated that the major impacts of the crisis will be seen in sectors like hunger, child and maternal health, gender equality, access to clean water and disease control.



The human cost of the crisis will be severe then other costs and it is estimated the crisis will leave 53 million more people in extreme poverty by 2015 then otherwise would have been, said the report.



The report stated that South Asia will see a sustained decline of the percentage of the population living on less than $1.25 a day to 19.4 percent by 2020 from 40.3 percent seen in 2005. However, the poverty rate in the Sub-Saharan Africa will continue to be 32.4 percent by the end of 2020.



As a result of all changing dynamics, the global poverty rate is expected to decline to 12.8 percent from 25.2 percent seen in 2005, said the report. However, some of the major targets like fighting against hunger will continue to be a major challenge of the MDGs.



"The critical MDGs target of halving the proportion of people suffering from hunger from 1990 to 2015 appears very unlikely to be net as over a billion people struggle to meet basic food needs," the report underlined.



It pointed figure toward toxic combination of 2008 food prices rise and global financial crisis for the unexpected exacerbation of huger in developing countries. The effects might have been more serious without sound pre-crisis policy reforms by developing countries and efforts made by international institutions to counter the effects of the crisis, the report highlighted.



Government spending on social safety nets appears to have been remained relatively steady and least through 2009 and massive efforts by the international community to limit economic contraction and contagion paid off, stated the report.

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