'We may have the first decline in trade since 1982 next year, and in many parts of the world, remittances are also drying up,” warned last month World Bank President Robert Zoellick just ahead of the G20 Summit in Washington D.C. “The most vulnerable in society, as always, are the ones at most risk.”
World trade has been an engine of the world economy, with developing countries posting nearly 8 percent growth and attracting a record $1 trillion in net private capital flows in 2007. But in 2009, world trade could decline for the first time since the eighties. The global economy is forecast to grow by only 1 percent, with developing country growth expected to fall to 4.5 percent from a previously projected 6.5 percent. The World Bank estimates each 1 percent drop in growth could trap another 20 million people in poverty.
“World trade, an engine of the world economy, is now dropping due to falling global demand and lack of trade credit,” said Danny Leipziger, World Bank’s Vice President for Poverty Reduction and Economic Management. “If you can’t get financing to ship your goods, exports will slow down and worsen the economic climate.”
-Trade Is Key to Overcome Economic Crisis