Crisis puts 10 million in poverty in Europe, Asia: World Bank

SOFIA: The global financial crisis will add 10.6 million people to the ranks of those in poverty in Europe and Central Asia by 2010, and an extra 23 million would be brought close to the limit, a World Bank report estimated on Monday.

The World Bank has revised its pre-crisis estimate for the number of people to be hit by poverty by 2010, raising their numbers from a previously estimated 119.3 million to 153.6 million, World Bank director for poverty reduction Luca Barbone said.

Presenting the report in Sofia, he said that 20.0 per cent of the people in Europe and Central Asia who managed to escape poverty between 1998 and 2006 would again fall below poverty lines.

Most of these people would be workers with little precautionary savings, who had benefited from the recent credit and construction boom to keep their heads above water, the report said.

Households in countries such as Moldova, Tajikistan, Kyrgyzstan and Armenia would be among the hardest hit as they would no longer benefit from large remittances of emigrant money traditionally sent back home.

The credit crunch, rising food and fuel costs and increasing unemployment posed the highest threat to households across Europe and Asia, the report said.

The global nature of the crisis would prevent households from coping in some of the traditional ways such as by finding secondary employment, leaving for work abroad or relying on transfers from friends.

A low capacity to invest in education and healthcare would also prolong the effects of the crisis on ordinary people, the World Bank concluded.