World Bank: Cushion the Poor Via NY Transfer News Collective * All the News that Doesn't Fit Jun 3, 1999 by infopal@palvision.net ________________________________________________________________________ INFOPAL * The Palestinian News Network * Comments: infopal@palvision.net ________________________________________________________________________ E. Asian crisis causes surge in poverty, poor needs to be cushioned: World Bank study By Ramesh Chandran The Times of India News Service, Thursday 3 June 1999 _____________________________________________________ check http://www.worldbank.org/html/extdr/extme/2214.htm for the World Bank News release ----------------------------------------------------- WASHINGTON: The East Asian decades of impressive prosperity and growth which witnessed a substantial fall in poverty rates has now been replaced by a ``substantial surge'' in the region's poverty levels caused by its recent financial crisis. A new comprehensive study by the World Bank recommends that international financial packages be ``better balanced'' to ``cushion the poor from the worst effects of crises''. The study maintains that those countries that until recently believed they were turning the tide in the fight against poverty are witnessing its re-emergence. What are the palliatives that can be adopted to tackle this surge and enforce a broad-based recovery? The Bank recommends `social safety net' measures. Among them: unemployment insurance, subsidised school fees, job creation programmes and food subsidies. According to the World Bank, in 1987, 1.2 billion people lived on less than $1 per day; in 1993 that number was closer to 1.3 billion. In 1999, if the proportion of people living in poverty has remained the same as in 1993, there could be 1.5 billion people living in ``abject poverty'' at the ``dawn of a new millennium''. The Bank warns the world leaders not to be ``complacent'' as the numbers of the global poor continues to surge. In its new working paper titled, Macroeconomic Crises and Poverty: Transmission Mechanisms and Policy Responses, gauging the impact of economic crises on the lives of the poor and detailing an agenda on ``safeguarding the needy'' during troubled times, it also maintains that the picture for South Asia was mixed. Although growth rates for the region have remained ``positive'' and ``significant''--per capita GDP growth for 1998 for the region is expected to be 2.7 per cent --rural wages in India have stagnated. In the late nineties, (1997), an estimated 340 million were living in poverty, up from an estimated 300 million in the late 1980s. More precisely, the study outlines that through 1997, there were increases in the numbers of both the rural poor (from 224 million in the early 1990s to 250 million in the mid-1990s) and the urban poor (from 72 to 73 million) in the 1990s post-reform experience. The Poverty Update suggests that this correspondence to an almost constant incidence of rural poverty and a slow decline in the incidence of urban poverty. The World Bank president James D Wolfenson stated that the ``financial turmoil of the last two years has dealt a blow to the expectations we had for reducing poverty. Just a short time ago, we had confidence that the international development goal of halving poverty would be met in the next 20 years in most areas of the world. Today, countries that until recently believed they were turning the tide in the fight against poverty are witnessing its re-emergence along with hunger and the human suffering it brings''. Given what the Bank calls the ``human impact'' of the crisis on the lives of millions of people in East Asia and other developing and countries in transition, the World Bank believes that international financial rescue packages must be better designed in future to protect the poor, the sick and the elderly from the worst effects of crises. In its agenda for action, the Update makes numerous recommendations: Among them: * Choose policies that achieve macroeconomic objectives at the least cost to the most vulnerable * Ensure fiscal adjustment protects services for the poor. * Set up or reinforce safety nets capable of providing effective insurance before a crisis & assistance once a crisis hits. * Set up policies and initiatives that help preserve the social fabric of societies in crisis and build social capital * Policy packages that protect the poor must have sufficient national political support. The author of this new paper, Giovanna Prennushi, a World Bank economist remarks: ``The East Asia crisis and its spill over into other emerging markets offers the world an opportunity to devise a new approach to crisis, one that rightly puts concern for the poor and the vulnerable right at the centre of its response''. (c) Bennett, Coleman & Co. Ltd. 1997. +---------------------------------------------------+ | PalVision, A Program of Support and Empowerment | | for the Palestinian Grassroots. | | P. O. 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