Modernizing Multilateralism

WASHINGTON, DC – 2008 will be remembered as a year of extraordinary turmoil. The financial crisis came on the heels of food and fuel crises. Now the world is in the midst of an economic crisis, which will lead to many job losses. Virtually no country has escaped. We are moving into a new danger zone, with heightened risks to exports and investment, to credit, banking systems, budgets, and balances of payments. In 2009, we may see the first decline in global trade since 1982.

As always, the poor are the most defenseless. For developing countries, tighter credit conditions and much weaker growth mean that governments are less able to meet education and health goals, and to invest in the infrastructure needed to sustain growth. Remittances are drying up. Already 100 million people have been driven into poverty as a result of high food and fuel prices, and current estimates suggest that every 1% decline in developing-country growth rates pushes an additional 20 million people into poverty.