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Business
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Global Recession Hits the Developing World
Economic downturn means poor nations have to depend more on foreign aid.Transcript of radio broadcast: 13 March 2009 This is the VOA Special English Economics Report. Both the World Bank and the International Monetary Fund expect the world economy to shrink this year for the first time since World War Two. As recently as January, the I.M.F. had predicted growth of one-half percent. But this week its chief, Dominique Strauss-Kahn, said the world has entered what he called "a great recession." A trader reacts last week to a fall in the value of South Korea's currency, the won A new World Bank report says the recession may hurt the developing world the most. Those countries depend on trade for economic growth. But world trade is expected to fall at the fastest rate in eighty years. East Asia has been hardest hit. In February, exports from China fell twenty-six percent from a year ago. Rich nations are expected to borrow heavily in world credit markets to finance spending at home. But investors are demanding very high returns if they are willing to lend to the developing world at all. Jeff Chelsky, a World Bank senior economist, says investors are avoiding higher risk debt in a flight to quality. The bank estimates that up to three trillion dollars of public and private loans in developing countries must be repaid this year. Some nations have enough foreign currency reserves, but others will struggle to find new financin...
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