Declining Global Growth & Widening Inequality Gaps – Millions of Poor Faces Survival Risk

  • High energy prices and increasing food crises have become devastating for poor and vulnerable class
  • Debt and Inflation remains a key concern
  • Sixty percent of low-income countries are already under high debt distress

Speaking at a conference, World Bank President, Mr David Malpass, said that war in Ukraine and Covid shut down in China are lowering the global growth rates and increasing poverty. World Bank has lowered growth forecast for 2022.  Growth rate has been lowered to 3.2% from 4.1%.  Poverty is increasing due to reduced commercial activity and trade, as a result people are facing decline in education and health care. Increasing debt crises and decline in value of currencies are burdening heavily on the poorer section.

World Bank has mobilized funds to the extent of $1 billion in emergency financing, and have committed another $1.5 billion for supporting essential government services. Speaking at Spring Meetings 2022 Media Roundtable, Mr Malpass highlighted that Global food security has become a key issue and quoted example of Senegal and Morocco which have been impacted by food security. Rising energy cost and increase in fertilisers prises are impacting millions by causing an increase the food prices

World’s poorest countries depend on food import for feeding the citizen and food items accounts for more than half of the household budget. In such a case, food crises become devastating for poor and vulnerable class.  Countries must take initiatives for encouraging production of food, energy, and fertilizer and both advanced as well as developing countries needs to come to an agreement for reducing their trade barriers. Mr Malpass emphasised that elements of quotas, high import and export tariffs, expensive food subsidies, and export bans on food products are big challenges for global trade and must stop

The international community must step up to promptly provide emergency food aid and assist in the strengthening the social safety nets. World Bank is providing $17 billion every year for strengthening food security. World Bank may carve out financial support of around $170 billion as a response to tackle fifteen-month crisis covering period from April 2022 through June 2023. This may involve an expected outlay of around $50 billion in the next three months.

World Bank has increased climate financing and technical support assistance. It has achieved funding of over $26 billion in sustainable projects in 2021, highest ever in the history of World Bank. Mr David Malpass shared that Electrical grid and baseload were key topics during his visits to Poland and Romania. Ukraine has made an advancement in its electricity distribution and grid management by synchronizing its electrical grid with Western Europe.

Debt and Inflation remains a key concern as Sixty percent of low-income countries are already under high debt distress. In addition to prioritising energy and food production, World must come together to strengthen security and stability as global fragility remains a key challenge. This requires peace and security commitment and strengthening institutions for improving coordination.

Staff Galactik Views

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