BBC News | BUSINESS | Aid agency warns on economy

By BBC business reporter Brian Milligan

The aid agency Oxfam today warned that the developing world is facing a major economic crisis, and a massive increase in poverty.

It follows a similar warning from the World Bank last week, which said it expected tens of thousands of people to die as a result of the global recession, exacerbated by events on 11 September.

For those trying to work out where their next meal is coming from, macro-economics may not seem pressing.

But even before 11 September, economies across Africa and the developing world were out of favour with foreign investors.

Money retreats

Currencies and commodity prices have fallen drastically, as money has retreated to the west.

A man picks coffee on his farm north of Nairobi.
Commodity prices have fallen by up to 50%

Africa lives by its commodities and minerals.

Much of the world's bauxite, used to make aluminium, is mined in Africa.

But demand for aluminium to make products like aircraft and cars has slumped, and with it the price of bauxite.

Kenya exports half its tea to Pakistan and Afghanistan, a market now uncertain in the extreme.

Little wonder that commodity prices, including coffee and sugar have fallen by up to 50% since the start of last year.

For individual Africans that will mean lower incomes; hardly what the British Prime Minister, Tony Blair, envisaged when he spoke about a new world order and extra business with developing countries.

At the moment the gloomy prospect is for less trade, not more.


		^^ Back to top News Front Page \| World \| UK \| UK Politics \| Business \| Sci/Tech \| Health \| Education \| Entertainment \| Talking Point \| In Depth \| AudioVideo ---------------------------------------------------------------------------------- To BBC Sport>> \| To BBC Weather>> ---------------------------------------------------------------------------------- © MMIII\|News Sources\|Privacy