Poor nations worst hit - World Bank

WASHINGTON, OCT. 2. Though the September 11 terrorist attacks will likely take a heavy toll on the economies of the U.S. and other wealthy nations, they may have an even greater impact on poor nations that do not have safety nets in place to absorb a sharp economic downturn, the World

Bank predicted in a report issued today.

Slower growth in world trade, a slump in tourism, lower commodity prices and falling foreign investment could reduce economic output across the developing world, straining already weak social service and health care systems, the bank said.

It estimated that 40,000 children worldwide will likely die from disease and malnutrition and 10 million people will fall below the bank's extreme poverty line of $1 dollar a day or less as a direct result of slower economic growth.``We've seen the human toll the recent attacks wrought in the U.S.," said the World Bank President, Mr. James Wolfensohn. ``But there is another human toll that is largely unseen and one that will be felt in all parts of the developing world, especially Africa.''

The ripples from the attacks were varied and widely felt, bank economists said. Tourists have cancelled about 65 per cent of vacations in the Caribbean. Indian businesses are paying 10 to 15 per cent more to ship goods abroad because of rising insurance and security costs. Agricultural prices have dropped globally by about 5 per cent since the attacks, a loss that comes directly out of the incomes of farmers in Africa and Latin America.

Next year the richest countries on average are likely to expand at a 1.25 per cent rate, down from a forecast 2.2 per cent growth in 2002. Poor countries are expected to expand at a 3.7 per cent rate, 0.6 percentage point off the bank's pre-attack expectations.

While the decline in output may be greater in the U.S. and other developed countries, those nations also have far greater resources to cushion the blow, the bank said.

``The 300 million poor in sub-Saharan Africa are particularly vulnerable because most countries have little or no safety nets, and poor households have minimal savings to cushion bad times," the bank said.

The growth estimates are preliminary, bank officials have stressed. Bank officials said they are prepared to step up lending as needed to counter the effects of the attacks. - New York Times

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