World Bank To Global Leaders: 2009 Remains 'Dangerous' Year
There is what top government and banking officials tell us; then, there's what they tell each other.
Thanks to an enterprising reporter at Reuters, today we get a glimpse of what World Bank president Robert Zoellick told the leaders of the G8 -- the northern hemisphere's largest and most important industrialized nations.
And what Zoellick had to say is not promising.
In a letter dated July 1 and obtained by Reuters, Zoellick told the G8 that the massive government intervention following last fall's global financial near-collapse appears to have "broken the fall of the global economy."
"Yet," Zoellick continued, "2009 remains a dangerous year. Recent gains could be reversed easily, and the pace of recovery in 2010 is far from certain."
Zoellick sent the letter to Italian president Silvio Berlusconi, who is hosting a G8 meeting later this week. It was copied to the heads of the rest of the G8: The U.S., Britain, France, Germany, Japan, Russia and Canada.
"I recognize that some developed countries are now considering a policy mix that assumes the recovery is at hand," Zoellick wrote. "But for the developing world, it is far too early to think of such measures."
Excluding China and India, which will continue to grow even this year, the World Bank estimated that the gross domestic product of developing countries will shrink by 1.6 percent this year.
"Fragile countries in Africa are most at risk, hit by higher unemployment rates, especially among young people, increasing the risk of a relapse into conflict," Zoellick wrote. "Unlike developed countries, most developing countries are not in a position to borrow and spend to reverse the downward spiral."
A rise in global poverty, especially in some nations, creates fertile ground for recruitment and nurturing of new terrorists, demonstrating how a weak global economy becomes a national security issue.
July 6, 2009; 11:10 AM ET
Categories: The Ticker | Tags: Robert Zoellick, World Bank
Save & Share: Previous: Markets Down Slightly At Opening
Next: Service Sector Shrinks, But Less Than Expected
The comments to this entry are closed.