Financial Crisis Hampers Effort to Cut World Poverty Diane Coyle in Washington Reports on Plans to Ease Hardship and Handle Future Crises

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THE LONG MARCH towards the reduction of poverty has been stalled by the financial crisis of the past two years, according to a new report from the World Bank yesterday.

The report concludes there are some encouraging trends, but warns that new inequalities between rich and poor countries are emerging in cyberspace, with little Internet access in the developing world.

"This has been more than a financial crisis. This has been a crisis of institutions not robust enough to sustain the force of an increasingly global economy," said James Wolfensohn, the World Bank president. The Bank warns that it will become increasingly difficult for the international community to achieve goals such as reducing poverty and infant mortality and universal primary education. Its new "World Development Indicators", an annual compendium of statistics, highlights a wide range of inequalities between rich and poor states. For example, GDP per head has grown faster in the rich countries, reaching 2.3 per cent growth between 1965 and 1997, compared with 1.4 per cent for low income countries. In the poorest countries, such as Niger, Uganda and Guinea Bissau, more than half the population lives on less than one dollar a day. Income inequality also remains extreme in many developing and emerging countries. In Brazil, for example, the top 10 per cent of earners enjoy nearly half of the total income, compared with about one-quarter for the top tenth of the UK income distribution and just one-fifth in the most equal nations such as Austria and Norway. But the report highlights some additional inequalities stemming from access to new technologies. Computer and telecommunications technologies can in principle allow poor countries to leapfrog the old technologies that are still widespread in the industrial countries. For instance, in the Philippines and Sri Lanka there is a much higher ratio of mobile telephones to land lines than there is in European states such as Belgium and France. Some sub-Saharan countries, including Botswana, Djibouti and Ghana, already have fully digital telephone networks. Even so, the poorer nations lag far behind in the number of mobile phones in use, with just 1 per 1,000 of the population compared with 189 in the richest countries, and 16 fixed telephone lines per thousand compared with 506. …