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Journalism of Courage
What the Americans,in their wonderful,idiomatic way,say about optimism is that it aint over till the fat lady sings. The World Bank is unquestionably the fat lady of international development; and,in a report released in advance of next weeks meeting of G-20 FMs,it sang a grim,dispiriting dirge. Great Depression comparisons are no longer facile,the province of political speechwriters reaching desperately for great historical analogies: the Bank has announced that it is true that in its opinion,for the first time in the post-war decades,both the size of the global economy and the volume of global trade would actually sink this year.
Rather than a parade of disquieting numbers,the report sticks to easily-comprehensible,memorable ideas. First: it proclaimed its own helplessness,and that of the IMF. The tide of global insolvency and credit-hunger would overwhelm the slender barricades of both those institutions: buffers they are,but they werent designed for this sort of tsunami. Second: stop worrying about Iceland,poorer countries will suffer more. Financial constraints will be the real problem,and those will disproportionately hurt emerging economies in Asia,Africa and Latin America,which could have 700 billion less credit than they need. The Bank wont be able to provide more than 35 billion of that,they say. Private flows will only be 17 per cent of 2007 levels. Third: these massive financial shortfalls will set the clock back on poverty reduction,wiping out the past decades hard-won gains.
