POOR NATIONS HIGHLY VULNERABLEWashington (Reuters) - A sharp slowdown in world growth would increase the risk of recession in poorer countries, whose budgets have barely recovered from the last economic slump just two years ago, the IMF said on Monday. A report by the International Monetary Fund said there are “severe downside risks” to the global economic outlook and that the impact of another global slowdown on the poor could be even larger should world food prices rise again. The predicament for poor countries is that their national budgets have not yet fully recovered from the 2009 global financial and food-price crises, and governments have little space for manoeuvring. Aid has also fallen because of belt-tightening in the United States and Europe. In 2009, poor countries were hard hit by a drop in global trade, and revenue sank as demand for their goods fell.
AS GLOBAL RISKS BUILD, IMF SAYS
AS GLOBAL RISKS BUILD, IMF SAYS
The IMF estimated that poor countries would need $27 billion in additional funds in 2012 in the event of a sharp global downturn. A small number of large economies in Africa and Asia would need the bulk of these funds, the IMF said. The IMF also warned an estimated 23 million more people could be pushed into poverty by a severe downturn. The World Bank and regional development banks said they could provide more than $200 billion in financing to help developing economies. While more countries in Africa are looking toward China and other emerging economies for investment, the IMF said advanced economies remain large trading partners for poor countries. IMF suggests that inflation could reach 14 percent in poor countries in 2012. In countries where inflation is climbing but not yet a problem, authorities should use monetary and exchange rate policies to soften the blow of an economic shock.
The International Monetary Fund has warned about growing poverty and that a 1.5% point decline in global growth will have more impact on poorer countries in 2011-12. The IMF endorsed the governments’ emphasis on developing social programs aimed at reducing poverty. As higher food and fuel prices are expected to push inflation slightly upward, the IMF is urging a reduction in tax concessions with improvement in overall tax collections. The Hindu view of ecology with its social, political and economic implications can solve these problems.
WHAT DO THE VEDIC TEACHINGS TELL US?
The Hindu tradition gives us three principles: yajna, dhana and tapas - sacrifice, giving and penance. These are the three ecological principles for replenishment of the earth. Through yajna you replenish the earth. ... Whenever you take, eat, or consume you must consider whether you have left something for others - for God, for nature, for the poor and for future generations. This is sacrifice, or yajna. ... Next comes dhana, giving. This is replenishment of society. Just as we take from nature and therefore must make sacrifice, so we take from society. But we mustn’t be just consumers. We must make our own sacrifice to replenish society. ... Finally comes tapas, self-control, which replenishes the soul - your own internal spiritual environment. You must not only make sacrifice for nature and give back to society but you must replenish your own inner environment. ... With these three principles of sacrifice, giving and self-control you keep replenishing the total environment.