By DEB RIECHMANN –
WASHINGTON (AP) — The global economic crisis has stymied the international community’s effort to halve extreme poverty by 2015 and meet other goals to reduce hunger, fight disease and get young children to school, the World Bank warned on Friday.
A report released in conjunction with this week’s meeting of the bank and International Monetary Fund in Washington said the financial meltdown is impeding efforts to achieve most of the eight U.N. millennium development goals. Although it still may be possible to reach the first goal — halving extreme poverty by 2015 from its 1990 level — it will be an uphill battle, according to “The Global Monitoring Report 2009: A Development Emergency.” Continue reading
Stiglitz is Right, Friedman is Wrong (source)
Among the throng of distinguished international guests participating in the first democratic transition of government in Paraguay’s 190-year history, former chief World Bank economist and current Columbia Professor of economics Joseph Stiglitz (who also was an advisor to the Clinton White House) was undoubtedly the most influential. Two days before left-leaning president-elect Fernando Lugo’s inauguration, Stiglitz’s lecture on globalization and equitable growth drew a full house to the “Grand Theater” of Paraguay’s central bank. Elites of various stripes filled the auditorium’s plush seats, as the country’s largest soy estate farmers, ranchers, industrialists, business leaders, and civil-society leaders showed up for a glimpse of what the new government’s economic and social policy might look like.
Notwithstanding the persistence of international media prophecies that Hugo Chavez’s economic game plan for Venezuela would be duplicated in Asuncion, President Lugo has given plenty of indication that he aims to provide pragmatic leadership. One tip-off to this is his naming of U.S.-educated macro-economist Dionisio Borda as Minister of Finance. Broadly respected and considered highly competent, Borda occupied the same post for two years in the outgoing government, where he headed a successful effort to balance public finances and achieve macroeconomic stability before resigning in protest over the failure of the prior Duarte administration to introduce more structural reforms of the public bureaucracy. Borda has emerged once again as the central figure of the team named by newly inaugurated President Fernando Lugo to execute his expressed goals of public-sector reform, equitable growth, and environmental sustainability. However, despite all attempts to distance himself from South America’s more muscular left, Lugo—like Brazilian president Lula on the eve of his inauguration—must weather the local elite’s deep apprehension over a government that counts among its mandates a directive to reduce the country’s grave social and economic inequalities. Continue reading
WB: August 26, 2008—New poverty estimates published by the World Bank reveal that 1.4 billion people in the developing world (one in four) were living on less than US$1.25 a day in 2005, down from 1.9 billion (one in two) in 1981.
The new numbers show that poverty has been more widespread across the developing world over the past 25 years than previously estimated, but also that there has been strong—if regionally uneven—progress toward reducing overall poverty.
Looking at the new estimates from the perspective of the Millennium Development Goals, a set of internationally agreed development targets, the developing world is still on track to halve extreme poverty from its 1990 levels by 2015. This is the first of eight critical goals. Continue reading
Discovered this erudite blog “Law and Development” and a brilliant post titled “Do World Bank and IMF Programs cause crises?”
The conclusion of Axel Drefer and Martin Gassebner here is a qualified yes.
We examine whether and under which circumstances World Bank projects and IMF programs affect the likelihood of major government crises. Using a sample of more than 90 developing countries over the period 1970-2002, we find that crises are on average more likely as a consequence of Bank and Fund involvement. While the effects of the IMF to some extent depend on the model specification, those of the World Bank are shown to be robust to the choice of control variables and method of estimation. We also find that governments face an increasing risk to enter a crisis when they remain under an arrangement once the economy performs better. The (economic) conditions present when a new arrangement is initiated, however, do not affect the impact of Fund and Bank on the probability of a crisis. Finally, while crisis probability rises when a government turns to the IFIs itself, programs inherited by preceding governments do not affect the probability of a crisis.
Pakistani businessmen in the largest, prosperous province Punjab, responding to the advice furnished by the World Bank:
…the cost of doing business is increasing due to our exposure to IFIs-imposed structural reforms’ conditionalities and cross conditionalities resulting in higher oil prices, utility charges and tighter fiscal policy and monetary policy.
Today, we are again faced with an imminent slow down in the manufacturing sector due to withdrawal of subsidies especially from oil, gas and electricity. In the Budget 2008-09 the government announced reduction in important subsidies for food, oil, gas and electricity.
The LCCI Vice President Shafqat saeed Piracha said that cost of doing business is set to further rise in Pakistan due especially due to misplaced and ill-timed withdrawal of subsidy on oil, gas and electricity.
This is going to suppress industrial development growth in Pakistan. This is especially going to suffocate the development of SMEs in manufacturing sector that despite lack of policy focus and difficulties in accessing credit and modern training facilities played an important role in employment generation and exports since the mid 1970s.
Instead of imposing micromanaging our economy and imposing harsh conditionalities on us the IFIs and the World Bank should provide us more help in the areas of technical knowledge and skills for improving our social and physical infrastructure.