In a paper prepared for this month’s meeting of the G20 in London, the World Bank says global trade is on track to this year record its largest decline in 80 years.
The bank also says that suffering in places like the U.S. and Europe may be significant but the global economy’s impact in poorer countries is much more dramitic.
“Debt issuance by high-income countries is set to increase dramatically, crowding out many developing-country borrowers, both private and public,” it says.
World Bank president Robert Zoellick warned that preventing an economic catastrophe in developing countries was important for global efforts to overcome the crisis.
“We need investments in safety nets, infrastructure, and small and medium size companies to create jobs and to avoid social and political unrest.”
What’s this mean for President Obama: should he help “bailout” poor countries, as the New York Times proposes? Or should he get money flowing again so Americans can buy goodies at WalMart from China, boosting world trade? Either way, the solutions take a lot of debt, much borrowed from China, with may cut into his health care plans and ideas about the environment, global warming, energy, education and other projects….