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June 19, 2021

Developing countries face tough road to recovery

By Jason Buckland, Sympatico / MSN Finance

It’s hard to fathom when we’re not exactly backstroking through vaults of cash with Scrooge McDuck, but – depending on where you look – the economy really hasn’t hit us as hard as it could.

That is to say, by comparison at least, Canadians should feel fairly fortunate about their socioeconomic situation as the troubles the global recession has placed on developing countries begin to grow clearer.

According to the National Post, economic hardship in world financial hubs like New York, Hong Kong and Toronto are killing the home nations of many of its employees who wire a “substantial chunk” of their wages to family in their developing countries.

The World Bank estimates that remittances, the actual wiring of money, will drop an additional five-to-eight percent from its current levels in 2009.

Add to that, the global economy is now projected to decline by 3 percent this year (instead of the previously estimated 1.7 percent), giving many developing nations even bleaker prospects of recovery as export business and internal commerce look primed to suffer.

The ripple effect isn’t just being felt out of the financial sector, either. Many blue-collar jobs that employ a significant percentage of immigrants are, of course, struggling.

Lay-offs upon lay-offs mean fewer jobs for maids, bricklayers and construction workers which, according to Bloomberg, translates into smaller nations having less funding for health care, food and housing as much-needed remittance levels dip lower.

Indeed, while requests for fiscal assistance are up at the World Bank division that cares for the 78 poorest countries, recent signs of global stability are a pleasant sign for developing nations.

Yet, when that recovery is to reach the poorer regions of the world remains to be seen.

“Although growth is expected to revive during the course of 2010,” World Bank President Robert B. Zoellick tells ABC, “the pace of the recovery is uncertain and the poor in many developing countries will continue to be buffeted by the aftershocks.

“Waves of economic pain continue to hurt the developing world’s poor, who have less cushion to protect themselves.”



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...