Jakarta: The number of extremely poor people in developing countries would increase by 26 million by the year 2020, the World Bank has said.
“Over the next 20 years, the fight against poverty could be hampered if countries are forced to cut productive and human capital investments because of lower development aid and reduced tax revenues,” World Bank said in its statement.
If bilateral aid flows declined, as they had in the past, this could affect long-term growth rates in developing countries, potentially increasing the number of extremely poor in 2020 by as much as 26 million, it said.
The bank said many developing countries were continuing to face serious financing gaps. Overall, the financing gap of developing countries was projected to be $210 billion in 2010, declining to $180 billion in 2011, down from an estimated $352 billion in 2009.
Private capital flows to developing countries were forecast to recover only modestly from $454 billion (2.7% of the developing world’s GDP) in 2009 to $771 billion (3.2% of GDP) by 2012, still far below the $1.2 trillion (8.5% of GDP) in 2007.
The bank also predicted a 6% economic growth per year in developing countries in the period 2010-2012.
The forecasts were based on an anticipation of China’s economic slowdown after enjoying top economic growth rates so far. In 2011 China would see a 8.5% economic growth rate, down from a predicted 9.5% for 2010.