Regional finance ministers and development practitioners teamed up today to brainstorm solutions to the troubling economic crisis.
Amid World Bank warnings that Africa is likely to be the worst-hit region by the global financial crisis, African finance ministers and Bank staff met today to determine the way forward in dealing with the impact of the global financial crisis on African countries.
Hosted by the World Bank’s chief economist for Africa, Shanta Devarajan, and chaired by vice president for Africa, Obiageli Ezekwesili, the meeting challenged participants to “think outside the box” in determining solutions to the negative economic, humanitarian and political effects the crisis already is having on the continent.
“The major challenge facing African countries and their development partners is how to design appropriate policies that would respond to this crisis,” Ezekwesili said.
She said sound macro-economic policies put forward by Africans over the last decade, which have, in part, led to significant growth rates, are now being questioned.
Flexibility, diversification, and regional solutions are key to combating the crisis, meeting participants agreed. Uganda Central Bank Governor Emmanuel Tumasiime-Mutabile advised flexibility of markets, of regimes, and of policies in order to stem the force of the crisis.
The seminar ended with a call from the World Bank’s Ezekwesili for countries to look to intra-African experiences and solutions as a means to ride out the crisis.
- Story: Africa Likely to be Worst Hit by the Financial Crisis
- Story: African Finance Ministers, Governors Discuss Financial Crisis Solutions
Eastern Europe and Central Asia: Crisis Pushing People Back into Poverty
After enjoying a decade of strong growth and poverty reduction, the countries of Eastern Europe and Central Asia are now seeing the global economic and financial crisis push almost 35 million people back into poverty and vulnerability, or about one-third of the people that had escaped from it over the last decade.
“By focusing on preserving jobs, protecting people, and stabilizing the financial sector, countries can mitigate the impact of the crisis and ensure they are in a better position to rebound afterward,” said Shigeo Katsu, World Bank Vice President for the Europe and Central Asia Region.
Social policy actions should be a priority for the region.
And finally, a key challenge remains the stabilization of the financial sector – the original source of the global crisis. Keeping capital market linkages strong is the only way for ECA countries to finance some of their financing needs. Banking systems must be stabilized. While the scope of the problem remains large, the World Bank Group in partnership with the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) has launched a $31 billion initiative to support bank recapitalization and restructuring in order to provide resources to institutions hit by the global economic crisis, complement national crisis responses, and deploy rapid, large-scale and coordinated financial assistance to support lending to the real economy through private banking groups, in particular to small- and medium-sized enterprises.
- Press Release: Global Crisis Pushing Almost 35 Million People Back Into Poverty and Vulnerability in Europe and Central Asia
- Press Conference Video
Latin America Forum on Financial Crisis
Also today, the World Bank organized a regional forum on "Latin America and the Global Crisis, Toward a Rapid Regional Recovery."
During the four-hour forum, experts, political leaders and policy-makers discussed issues facing the region.
The crisis has stalled more than five years of economic growth, and it threatens to diminish the social gains–notably reducing the number of poor people- made in the past decade.
The forum participants included Juan José Daboub, World Bank Managing Director; Pamela Cox, World Bank vice president for Latin America and the Caribbean; Augusto de la Torre, World Bank’s chief economist for Latin America and the Caribbean; José de Gregorio, Chile’s Central Bank Governor; Oscar Zuluaga, Colombia’s Finance Minister; and Ricardo Hausmann of Harvard University; Mauricio Funes, President-Elect of El Salvador; Jorge Castañeda, New York University professor; Julia E. Sweig of Council of Foreign Relations; and André Oppenheimer of Miami Herald; and Marcelo Guigale, World Bank Regional Director of Economic Policy and Poverty.
An archive of the webcast will be available tomorrow morning at this url: http://vcg01.worldbank.org/hosting/
Middle East and North Africa: Q&A with Bank’s Chief Economist
Yesterday, Auguste Kouame, the Bank’s Acting Chief Economist for the Middle East and North Africa Region, answered questions about the crisis’ impact these countries.
Although the countries' financial systems have not been highly vulnerable to the crisis so far due to their limited integration with global financial institutions, the impact of the global recession on the real economy can be significant in many MENA countries, he said.
It is expected that the crisis will cause an increase in poverty in MENA. With a significant number of people living above or close to the poverty line, the sensitivity of poverty to external shocks is high, he explained.
He also added that the World Bank’s knowledge and resources are being mobilized to support these countries in their efforts to monitor economic and social development, review scenarios and policy options, design policy responses, and implement reforms in these critical times.