A downturn that began in the rich world is hurting those who can least afford it
“POOR countries are innocent,” says Ngozi Okonjo-Iweala, the Nigerian managing director of the World Bank. They did not contribute one jot to the global credit crunch, and their banks and firms have few links to global capital markets. For a while, it seemed as if the rich world’s mess might even pass them by. The oil-price fall of 2008 benefited oil-importing developing countries to the tune of 2% of their national incomes. As recently as January, the IMF thought emerging and developing countries would grow 3.3% this year, compared with a predicted fall of 2% for rich economies.
But innocence, it seems, will not protect anyone. A financial crisis that began in New York and London and spread to manufacturing in rich, then industrialising countries, has now hit the “bottom billion”: the poorest people in 60-odd countries who have seen only halting gains from globalisation, but will feel its reverse, perhaps precipitously.
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