BASSETERRE, St. Kitts – THERE is concern at the international level that some vulnerable economies may be left behind as the world shows faint signs of economic recovery.
However, the latest economic policy paper issued by the World Bank addresses the need to assist developing states in realizing economic recovery.
The policy paper, entitled “Protecting progress: the challenge facing low-income countries in the global recession”, was released yesterday (Sep. 23) and focuses on the unique
challenges facing small developing states as a result of the ongoing financial and economic crisis.
It also addresses the importance of making aid available so the progress made in earlier years can be protected.
According to World Bank Group President Robert Zoellick, there has been some progress by international companies in trying to “break the fall”, but he noted that it is time to recognize that “developing countries are part of this solution”.
“Developing countries can play a key role in helping to boost global demand to support global recovery, but to do so they are going to need access to financing for some years to come.
“Looking to the longer term, developing countries can be vital parts of a global economy with multiple poles of growth, with responsive public sectors and dynamic private sectors; this would be more balanced,” he explained in a conference call yesterday.
While the World Bank Group, along with regional development banks, has been stretching to assist, Zoellick underscored that the G20 needs to put incentives in place to help developing countries build productivity, investment and sources of energy.
Explaining some of the challenges that developing countries are still struggling to address, Zoellick said, “The paper that we're releasing today shows that low-income countries are being hard hit through a collapse in trade, especially for commodity-exporting nations, decline in tourism, as well as remittances, while the crisis for developed countries has meant higher unemployment, for many in the poorest countries it means naked survival.”
The protection of social safety nets was also encouraged in the World Bank paper. Zoellick acknowledged the pledges made by various countries, but asserted that good intentions are not enough.
“There is a gap in the global financial architecture,” he continued. “Unless we can plug this gap and give some insurance to publics and countries that they won't be left defenseless in the face of shocks, we risk undermining support for global integration and global markets.”
As the economies of these developing nations enter a “new danger zone”, the policy paper agitates for quick and effective assistance to be provided to the most vulnerable low-income countries following severe and widespread shocks.
