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Poorer nations still reeling

Annys Shin Washington Post

WASHINGTON – The global recession is expected to push 89 million more people into extreme poverty by the end of 2010, the World Bank said Wednesday as it called on the leaders of the 20 largest economies to engage in “responsible globalization.”

Although economic data show the worst recession of the post-World War II era might have ended in the United States, and global trade has begun to pick up again, low-income countries are still reeling from the effects of a financial crisis created by their wealthier counterparts.

In a paper prepared for the meeting of the Group of 20 nations next week in Pittsburgh, the bank said the sharp drop in trade, remittances, tourism and capital flows caused by the global downturn has forced governments in the poorest nations to cut spending in such critical areas as education, health and infrastructure.

“We are entering a new danger zone not of free fall but complacency,” World Bank Group President Robert Zoellick said Wednesday. “You have pledges, you have people who have intentions, but it’s not operationalized yet.”

Leaders of the G-20 are expected to spend much of the upcoming summit assessing the state of the global economy and the need for further stimulus measures.

The World Bank called on the G-20 to set up an emergency loan program to help poor countries so they “won’t be left defenseless in the face of shocks” not of their own making.

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