This is Bad News...

October 15, 2008

Poor to suffer meltdown as well

By ALEXANDER G. HIGGINS
Associated Press

GENEVA -- The world's poorest people will be hungrier, sicker and have fewer jobs as a result of the global financial crisis, and cash-strapped aid agencies will be less able to help, aid groups are warning.

The charities that provide food, medicine and other relief on the ground say cutbacks have already started, but it will take months or more before the full impact is felt in the poorest countries of Africa, Latin America and Asia.

During global recessions in the 1970s and 1990s, aid spending dropped sharply and took years to recover, said Matt Grainger of the British-based charity Oxfam International.

Aid agencies face more than just the prospect of plummeting donations. Higher food prices and more joblessness are greatly increasing the number of people who need assistance.

Philippe Guiton of World Vision told the Associated Press that his agency plans to cut back hiring, which will have implications for delivering aid to the needy.

"What we are going to do now is to issue an order to reduce spending, to delay recruitment, delay purchases of capital assets, etc., until we can see clearer how much our income has dropped," he said.

Robert Glasser, secretary-general of CARE International, said the agency has "a number of major donors who have invested heavily in the markets and have now seen their portfolios take a big hit."

What that will mean on the ground could take months to gauge and perhaps years for a complete recovery, aid groups said.

In impoverished Haiti, funding for projects to rebuild from tropical storms that killed nearly 800 people and destroyed more than half the nation's agriculture hangs in the balance.

"It's too soon to tell yet because we haven't heard back positively or negatively from our major donors," Greg Elder, deputy head of programming for U.S-based Catholic Relief Services, said by telephone from the battered port of Les Cayes.

The group is waiting for word from the U.S. Agency for International Development on whether it will get $2 million for 10 new food-for-work projects, which provide Haitians with rations in exchange for building roads, irrigation systems and environmental projects.

That means problems across the board, said CARE's Glasser. Wealthy countries will stop investing in developing countries, and cut back on imports from poorer countries, leaving their governments with less money to pay for health care and schools, he said.

In Zimbabwe, a Red Cross food program for 260,000 orphans and HIV-infected people began last month to make sure AIDS victims have sufficient nourishment in a nation where millions are going hungry because of drought and land-seizures that have devastated agriculture.

HIV-infected people are especially vulnerable because without food they cannot tolerate their medicine.

"The farmers' food stores are depleted. There is no food available," said Peter Lundberg, country representative of the International Federation of Red Cross and Red Crescent Societies.

"I spoke to a family a few days ago and I said, 'How are you coping?' Basically this was a poor farmer family. And they said, 'We used to have three, maybe four, meals a day and now we're down to one meal.'"

Medecins Sans Frontieres, which runs AIDS clinics in the Cape Town township of Khayelitsha in South Africa, said it's "far too early" to determine the impact the crisis would have on donations.

"The money we're spending now was collected some time ago," said Henrik Glette, a South Africa-based spokesman for the group.

But Neil Tobin, an employee of UNAIDS in Sierra Leone, warned: "It is well documented that AIDS is a problem compounded by poverty. Thus the concern is that any sharp economic downturn may present increased challenges, particularly for developing nations in responding to the epidemic."

Top scientists meeting in Cape Town, South Africa, said they feared the financial turmoil would curb research into a new AIDS vaccine.

Dr. Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, said "the increases in the budget we had hoped for will not be forthcoming."

Alan Bernstein, head of Global Vaccine Enterprise, said the financial meltdown is "not good news for research in general and vaccine research in particular."

Associated Press writers Jonathan M. Katz in Port-au-Prince, Haiti; Michelle Faul and Donna Bryson in Johannesburg, South Africa, and Clare Nullis in Cape Town, South Africa contributed to this report.

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