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Developing nations are facing a massive financing shortfall of up to $700 billion this year as private investment evaporates and global trade collapses, threatening to return many countries to the days of heavy reliance on foreign aid, the World Bank warned yesterday.
In a report released ahead of a major summit of finance ministers in London this week, the World Bank also cautioned that the cost of helping poorer nations in crisis would exceed the current financial resources of multilateral lenders. It called on developed nations struggling with their own economic routs to dedicate 0.7 percent of the money they are spending on economic stimulus programs toward a new Vulnerability Fund to help developing countries.
The World Bank predicted that the global economy will shrink this year for the first time since World War II, a prognosis more dire than that of almost any private investment house. Its report underscored what many are calling a mounting crisis within a crisis, as the downturn that started in the wealthy nations of the West washes over developing countries through a pullback in investment, trade and credit.
"We need to react in real time to a growing crisis that is hurting people in developing countries," World Bank President Robert B. Zoellick said in a statement. Action is needed by governments and multilateral lenders "to avoid social and political unrest."
Continued>>>
"to avoid social and political unrest" That's code for "the capitalists will be in danger of getting their heads chopped off! OH MY!
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