Global Monitoring Report
The World Bank 2009
The title of this year’s
Global Monitoring Report is “A Development Emergency.” Appropriately
so. We are in the midst of a global financial crisis for which there has
been no equal in over 70 years. It is a dangerous time. The financial
crisis that grew into an economic crisis is now becoming an unemployment
crisis. It risks becoming a human and social crisis—with political
implications. No region is immune. The poor countries are especially
vulnerable, as they have much less cushion to withstand events. This poses
serious threats to the hard-won gains in boosting the economic growth of
many developing countries, especially in Africa, as well as achieving
progress toward the Millennium Development Goals (MDGs). It also poses a
threat to global recovery, because developing countries can provide a
growth platform to help the global economy pull out of the crisis.
World Bank on the global financial crisis
Developing countries face a new challenge from the global financial crisis,
which is rapidly becoming an unemployment crisis. The World Bank Group is
helping with the financial rescue but believes that we must remain focused on
the human rescue for the many millions left behind. The recent food and fuel
crises have already pushed millions back into poverty and hunger. Sharply
tighter credit conditions and weaker growth are likely to cut into government
revenues and their ability to invest to meet education, health and gender goals,
as well as the infrastructure expenditures needed to sustain growth. The
financial crisis now threatens to shrink emerging markets' access to trade and
investment, and each 1 percent drop in growth could trap another 20 million in
poverty. Governments must keep their commitments to increase aid to the most
Historic commodity price boom ends with slowing global growth
A new World Bank report, Global Economic Prospects 2009, examines the
impact of the financial crisis on GDP growth across the world, noting a marked
slowdown everywhere, including in formerly resilient developing countries.
Subtitled Commodities at the Crossroads, the report finds that future
demand and supply of key commodities like oil and food can be balanced given the
right policies in the energy and agriculture sectors.
In its global economic outlook section, the report predicts that global GDP
growth will slip from 2.5 percent in 2008 to 0.9 percent in 2009. Developing
country growth is expected to decline from a resilient 7.9 percent in 2007 to
4.5 percent in 2009. Growth in rich countries next year will likely be
The slowdown in developing countries is very significant because the credit
squeeze directly hits investments, which were a key pillar supporting the strong
performance of the developing world during the past 5 years.
With tighter credit conditions and less appetite for risk, investment growth
in the developing world is projected to fall from 13 percent in the 2007 to 3.5
percent in 2009, deeply significant because a third of GDP growth can be
attributed to it.
...economists at the World Bank project that world trade will
contract by 2.1 percent in 2009. This is the first time since 1982 that world
trade will shrink. All countries will be affected by this drop in exports, which
reflects not only the sharp slowdown in global demand, but also the reduced
availability of export credits.
Interview with Danny Leipziger on Financial Crisis
The world economy has changed dramatically in the last few months.
The financial crisis has become a global crisis, threatening to shrink
developing countries’ access to trade and investment. World trade is projected
to decline in 2009, making it the first such drop in almost three decades. Real
GDP growth will slow down in all regions, according to the latest Bank
estimates. Each 1 percent drop in growth could trap another 20 million in
poverty. What can developing countries do? What can the World Bank do to help
Join Danny Leipziger, World Bank Vice President for Poverty
Reduction and Economic Management, for a live online discussion on November 24,
2008 at 12 p.m. EST.
is post-colonial thinking?