Downturn ‘hits poor nations hardest’

The UN warned on Thursday that the world’s poorest states are especially hard hit by the global financial crisis and will feel its impact for years to come.

Addressing a conference in Vienna, Cheick Sidi Diarra, who heads the United Nations Office of the High Representative for the Least Developed Countries, said: “The current global financial and economic crisis is hitting the least developed countries severely. There is no doubt that the effect of the crisis on least developed countries will linger for years.”

According to the UN, 49 countries – 33 in Africa, 15 in Asia and one in Latin America – currently qualify as least developed.

Mr Diarra said that these countries were especially vulnerable to economic shocks and were now feeling the pinch of the financial crisis through among other things the decline of investment, tourism, falling exports and trade imbalances.

UN Industrial Development Organisation chief Kandeh Yumkella said that the financial crisis had caused growth rates of African countries to sag significantly this year.

“To catch up is going to be tough – so you lose momentum, you reverse,” Mr Yumkella stressed. “Those that were lagging behind don’t have the finances they need just to catch up a little bit. Now it’s even worse.”

Secretary-general of the UN Conference on Trade and Development Panitchpakdi Supachai warned that some less developed countries have debts that equal almost 100 per cent of their gross domestic product.

“It was 50 per cent before the crisis and now it’s going to be coming closer and closer to 100 per cent,” Mr Supachai declared.

Source: Morning Star, morningstaronline.co.uk