Crisis Pushing Key Poverty Goals Out of Reach

WASHINGTON - The global economic crisis has created a "development emergency" that will put at least some of the U.N.'s key poverty-reducing 2015 Millennium Development Goals (MDGs) out of reach for many countries, especially in sub-Saharan Africa and South Asia, according to a new report released Friday by the World Bank and the International Monetary Fund (IMF).

While the economies of developing countries as a whole are still likely to achieve a 1.5 percent growth rate in 2009, between 55 million and 90 million of their citizens are expected to join the ranks of the absolute poor, according to the nearly 300-page 'Global Monitoring Report 2009: A Development Emergency'. Per capita income is expected to fall in some 50 poor countries, most of them in Africa.

"The numbers will rise if the crisis deepens and growth in developing countries falters further," the report warned, adding that in sub-Saharan Africa and South Asia, where poverty rates are highest, the sharp slowdown in economic growth "essentially eliminates the pre-crisis prospect of continued reductions in the poverty count in 2009."

That will have serious and long-lasting impacts on health and education, as well, according to the report, which cited estimates that the current financial crisis may cause as many as 200,000 to 400,000 more infant deaths each year between 2009 and the MDG target year of 2015.

"Even though the recession is being felt most strongly so far in the advanced economies, unfortunately, conditions in developing countries are deteriorating dramatically," said John Lipsky, the IMF's first deputy managing director, at a press briefing on the new report Friday morning. "With simultaneous recessions striking all major regions, the likelihood of painfully slow recoveries is very real, making the fight against poverty more challenging and more urgent."

The new report was released amid four days of deliberations by the world's finance ministers and central bankers who are gathered here for the annual spring meetings of the governing boards of the two Bretton Woods institutions, which are expected to play key roles in addressing the crisis.

Earlier this month, the leaders of the Group of 20 (G20) nations agreed to provide the IMF with some 750 billion dollars to help borrowing countries cope with the crisis and an additional 250 billion dollars in an allocation of Special Drawing Rights (SDR) of which about 100 billion dollars will go directly to developing countries.

The G20 also supported an increase in lending by the major multilateral development banks (MDBs), including the World Bank, of 100 billion dollars a year over the next three years and endorsed the bank's plans to sharply increase lending for infrastructure projects, small and medium enterprises, and maintaining social safety nets. The bank announced Friday that it will triple funding for health systems and double education financing this year, to 3.1 billion dollars and 4.1 billion dollars, respectively.

The MDGs, which were set by the world's leaders at the U.N.'s Millennium Summit in 2000 and re-affirmed just last year, consist of eight specific goals to be achieved by 2015. The first was to halve the proportion of people in the developing world living in absolute poverty and chronic hunger by the year 2015.

The targets also include achieving universal primary education; promoting gender equality and empowering women; reducing of infant and maternal mortality by two-thirds; halting the spread of HIV/AIDS, malaria and other major diseases.

While substantial progress was made in achieving these goals during the first part of the decade, momentum has been set back by a combination of factors, including the failure of wealthy nations to keep up with the aid commitments they made at the Group of Eight (G8) summit in Gleneagles in Britain in 2005.

Between 2006 and 2008, non-oil-producing developing countries were hit particularly hard by the historic rise in the prices of fuel and basic food commodities which immediately preceded the onset of the financial crisis last September.

"For poor countries, this is a crisis upon crisis," according to the new report. "The triple jeopardy of the food, fuel, and financial crises is pushing many poor countries into a danger zone, imposing rising human costs and imperiling development prospects."

Before the onset of the food crisis in 2007, international agencies estimated the number of chronically hungry people in the developing world at 850 million. That number rose to 960 million people in 2008 and is now expected to climb past one billion this year, the report said, noting that the MDG hunger goal is now "seriously jeopardi(sed)."

And while the goal of universal primary education remains within reach by 2015, the combination of the food and financial crises make it unlikely that the MDG health targets - reducing infant and maternal mortality - will be met.

"The overall outlook for the MDGs, already a cause for serious concern (before the financial crisis), has become still more worrisome," the report warned.

Oxfam, the development group, said the report presented a "doomsday scenario" and should spur wealthy countries to follow through on their previous commitments - at the Gleneagles summit four years ago and as recently as the Group of 20 Summit earlier this month - to sharply increase aid to developing countries.

"Today the World Bank confirmed that the financial crisis has become a poverty crisis," said Bernice Romero, Oxfam's advocacy director. "At the G20 last month, a promise was made - 50 billion dollars for poor countries to weather this storm. This weekend at the spring meetings, the World Bank's rich country shareholders must deliver the promised cash, and no smoke and mirrors must be involved. The money must come over and above (past) foreign aid commitments."