Leaders of the G20 nations must use their meeting in New York in September to help Africa to recover from the global economic crisis, a senior World Bank official said on Friday. Shanta Devarajan, chief economist for Africa, said offers of help for the continent at the last G20 summit in London in April fell short because the richest states concentrated on rescuing their own damaged economies.
"Frankly, I and many of my colleagues were quite disappointed by the outcome of the G20," he told a news conference in London. "One can understand the reasoning behind that because this was a time when the objective was to make sure that the global financial system was not going to collapse. "But I am hoping that as the crisis plays itself out...we are going to be working towards the next summit which we should label as the 'development summit'."
The London summit communiqué recognised that the downturn will have a disproportionate effect on the poorest states and it pledged to give extra money to those nations. However, Devarajan said the promise of a $1.1 trillion package to restore growth and trust in the financial system would do little for Africa and other emerging markets. "I don't know how much of that is going to Africa, if any. It was mostly increased capital going to middle income countries," he said.
Africa needs special attention from the G8 nations because it could be worst hit by the crisis, even though it has fewest links to the financial markets, he added. African growth will drop to 1.7 percent this year from 4.9 percent in 2008 due to falls in commodity prices, foreign aid, private capital flows and overseas workers' remittances, he said.
While economic shocks in North America and Europe will hit jobs, the effects in Africa will be far more serious, he said. An estimated 700,000 more African babies will die each year before their first birthday if the economic collapse follows the same pattern as past crises, the World Bank estimates.