STEEL NEWS

64 million more people to live in extreme poverty: World Bank

Because of the continuing global recession, some 64 million more people will be living in extreme poverty by 2010, the World Bank said in a report released Tuesday.

The economic crisis and recession have substantially increased the challenge of meeting the Millennium Development Goals (MDG) targets, according to the World Development Indicator (WDI) 2010 released by the World Bank.

During 200002-2008, low and middle income countries averaged economic growth of 6.2 percent a year, and during 1999-2005 the number of people living on less than 1.25 dollars a day fell by 325 million.

In contrast to the record growth in 2000–07, the global economy grew only 1.9 percent in 2008 and declined an estimated 2.2 percent in 2009, the most severe recession in 50 years.

As a result, "some 64 million more people will be living in extreme poverty by 2010 because of the crisis. The effects on human welfare may be costly and long-lasting," the WDI said.

The effects of the crisis were transmitted from high-income economies to developing economies as exports, private capital flows, commodity prices, and workers' remittances declined.

Global trade, whose growth had slowed to 3 percent in 2008, declined an estimated 12 percent in 2009. Developing economies' trade fell an estimated 9 percent in 2009, according to the report.

 Private capital flows to developing economies, after peaking at nearly 1 trillion dollars in 2007, dropped to 765 billion dollars in 2008 and are estimated to have been much lower in 2009.

 Workers'remittances were more resilient, falling 6.1 percent to 317 billion dollars in 2009, but varied by country, the WDI said.

 Among developing country regions, Europe and Central Asia fared the worst, as GDP fell 6.2 percent. Severe economic adjustments were necessary as private capital flows, which had financed large current account deficits, were cut from 97 billion dollars in 2007 to 50 billion dollars in 2008, the WDI said.

 Latin America and the Caribbean economies contracted 2.6 percent, with Mexico, relying almost solely on the US market for its exports, the worst off.