World Bank Report Examines Member Banks’ Response To Global Economic Downturn, Highlights Effect On Global Poverty
By the end of this year, an additional 64 million people will fall into extreme poverty as a result of the global economic downturn that started in 2008, the World Bank said in a study on “member banks’ response” to the situation, Reuters reports. The bank defines extreme poverty as living on less than $1.25 per day. The report is based on the findings of a group, created “to appraise the effectiveness of its response to the global downturn,” the news service writes.
“Even with rapid economic recovery, some 71 million people will remain in extreme poverty by 2020 who would have escaped it had the crisis not occurred, coupled with unemployment rates that remain high in several countries,” according to the bank, which said it had disbursed $80.6 billion between 2009 and 2010 to mitigate the effects of the bad economy (11/19).
“The World Bank … while responding to the crisis with some delay, has demonstrated preparedness based on its knowledge of poverty impacts, long-term dialogue with country authorities, and ability to expand lending â€“ aspects that need continued and careful attention,” according to a statement from the bank.Â “Areas that need strengthening include the ability to act quickly in the event of such crises and preparedness to carry out financial sector interventions,” it continued (11/18).
The World BankÂ citedÂ the International Finance Corporation, which it saidÂ identifiedÂ creativeÂ ways to solicit funds “to help clients deal with the effect of the crisis,”Â Reuters writes.Â “But opportunities were missed, and the effectiveness of the initiatives has been diluted by design and implementations weaknessesÂ â€“ such as the time needed for fund-raising and internal capacity building,” the report said, according to the news service.
“The report deplored the lasting damage done by the crisis to already-poor countries the World Bank tries to help with low-interest loans, interest-free credits and grants to boost investment in health, education and development,” Reuters writes. According to the report, “The crisis reversed the decline in poverty of the last decade.”Â It said the bank “‘was not ready when the crisis struck’ and now needs to do a better job of sharing information among its members to improve its ability to respond more swiftly if it must do so in future” (11/19).