A walk on the wild side of the crisis…

The World Bank has released a series of predictions of the impact of the economic crisis in the developing world. For example:

  • After 2009, 53 million more people will be poor.
  • 46 million more than the number expected prior to the crisis will have less than $1.25 USD a day.
  • An extra 53 million will stay trapped on less than $2 USD a day.
  • From 2009 to 2015, an average of 200,000 to 400,000 more children per year may die if the crisis persists (a total of 1.4 to 2.8 million in the period).

These numbers are beyond the 130-155 million people pushed into poverty in 2008 because of soaring food and fuel prices. The WB calculated the children mortality figure by estimating the elasticity of infant mortality with respect to income worldwide. It uses the IMF’s most recent forecasts for global income growth. However, Shanta Devarajan, the Chief Economist of the Africa Region at the WB, suggests that this estimation is way optimistic:

  • Devajaran argues that if Africa experiences a growth deceleration, the infant mortality rate rises by about 28 per thousand. Given that there are 28 million births a year in Africa, this translates into over 700,000 additional children dying before their first birthday only in this continent.

The WB also points out which countries are more in risk (vulnerable) to suffer from the crisis by considering their exposure to an economic turmoil (based on their current economic standards), and their fiscal and institutional capacity to cope with it. This venn illustrates the results :

wb-countries-at-risk

CLICK TO ENLARGE

And this table has a more detailed description of the two-factor relationship:

The World Bank, 2009

The World Bank, 2009 (CLICK TO ENLARGE)

The World Bank, 2009

The World Bank, 2009

 

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