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Bleak prospect for world's poor

In its annual report on the "World Development Indicators", the bank said the gains of many people who had escaped from poverty in recent years could be erased in the aftermath of the Asian economic crisis.

Plummeting currencies, for example, have sent food prices sky-high, and buying food accounts for a large proportion of the spending of poor families.

If the World Bank's predictions are correct, then decades of progress in improving social conditions in the developing world could stall.

At the same time the report provides a counterpoint to a survey by the International Monetary Fund (IMF), which suggested that the international financial crisis could be over.

That may indeed be the case, but according to the World Bank the poor will have lost out.

Goals 'at risk'

The World Bank's chief economist, Joseph Stiglitz, for example agrees that the financial markets have calmed down. But he says that "we should keep our focus on what really matters, which in my mind is our statistics like unemployment, incomes, wages, poverty."

"Not exchange rates. People don't live off interest rates or exchange rates, they don't eat interest rates or exchange rates", he said.

His boss, World Bank president James Wolfensohn, fears a dramatic reversal for the prospects of poor people: "A year ago we confidently predicted that the international development goals of halving poverty, cutting infant and child mortality by two-thirds and enrolling all children in primary education could be met."

"Now those goals are at risk and we must draw on the lessons of recent experience to help us reshape our strategies for the future."

In 1990-97, according to the report, East and South Asia were achieving sufficient economic growth to reduce poverty by half by 2015.

In the wake of the crisis only South Asia and China are expected to make it. Countries like Thailand and Indonesia are unlikely to make the cut.

Part of the problem?

Together with the IMF, the World Bank has been accused of being partly to blame for the plight of the world's poor.

Critics say that their economic policies designed to contain the economic crisis have actually increased poverty.

Mr Stiglitz now says that the bank would have to be "more cautious of policies that 'save the economy' ".

A policy's success should not only be measured by whether it can deliver economic growth, but whether it can protect the poor as well, he said.

Aids impact

But it is not only turmoil on the financial markets that is threatening the world's poor.

The report also identifies the continuing spread of HIV infection and Aids as reducing people's expected life span by five to 10 years in some countries in Africa.

The bank says it is unusual for a single disease to have such a striking effect on life expectancy.

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