WASHINGTON (Reuters) - World Bank President Jim Yong Kim on Wednesday warned that most regions of the world will be hurt by the debt crisis enveloping the euro zone and said it was vital to protect the strong economic gains of the past decade in the developing world.
In his first public speech since taking the helm of the World Bank three weeks ago, Kim said even if the euro zone crisis is contained, it could still reduce growth in most of the world's regions by as much as 1.5 percent.
A major crisis in Europe could slash gross domestic product in developing countries by 4 percent or more, enough to trigger a deep global recession, he said.
"Such events threaten many of the recent achievements in the fight against poverty," he said.
Outlining his vision for the global poverty-fighting institution, Kim said his priority was to protect development gains from global economic risks, such as the euro zone crisis, which has begun to weigh on growth in large emerging economies like China.
For now, the world's poorest nations appear to be somewhat insulated from the euro zone crisis because they have limited exposure to global financial markets.
But Kim said not everyone would be spared, and he urged European leaders to act quickly to ensure the crisis doesn't worsen.
"To put it starkly, what's happening in Europe today affects the fisherman in Senegal and the software programmer in India," Kim told the Brookings Institution, a think tank in Washington.
"Therefore, it is urgent that European countries take all necessary measures to restore stability."
Kim said the bank needed to play a role in broadening development to fragile states or countries afflicted by conflict, and ensuring that growth in developing regions is lasting and benefits everyone, not just a few.
He said reforms are needed to sustain high rates of growth even in fast-rising economies.
Middle-income countries need to modernize their economic structures and create jobs to meet the growing expectations of their people, Kim added.
"Even as an unprecedented number of people in the developing world are ascending into the middle class, segments of the poorest populations are being left behind, and other segments of the middle class are at risk of falling back into poverty," he said.
yahoo.com
In his first public speech since taking the helm of the World Bank three weeks ago, Kim said even if the euro zone crisis is contained, it could still reduce growth in most of the world's regions by as much as 1.5 percent.
A major crisis in Europe could slash gross domestic product in developing countries by 4 percent or more, enough to trigger a deep global recession, he said.
"Such events threaten many of the recent achievements in the fight against poverty," he said.
Outlining his vision for the global poverty-fighting institution, Kim said his priority was to protect development gains from global economic risks, such as the euro zone crisis, which has begun to weigh on growth in large emerging economies like China.
For now, the world's poorest nations appear to be somewhat insulated from the euro zone crisis because they have limited exposure to global financial markets.
But Kim said not everyone would be spared, and he urged European leaders to act quickly to ensure the crisis doesn't worsen.
"To put it starkly, what's happening in Europe today affects the fisherman in Senegal and the software programmer in India," Kim told the Brookings Institution, a think tank in Washington.
"Therefore, it is urgent that European countries take all necessary measures to restore stability."
Kim said the bank needed to play a role in broadening development to fragile states or countries afflicted by conflict, and ensuring that growth in developing regions is lasting and benefits everyone, not just a few.
He said reforms are needed to sustain high rates of growth even in fast-rising economies.
Middle-income countries need to modernize their economic structures and create jobs to meet the growing expectations of their people, Kim added.
"Even as an unprecedented number of people in the developing world are ascending into the middle class, segments of the poorest populations are being left behind, and other segments of the middle class are at risk of falling back into poverty," he said.
yahoo.com
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