Though the financial crisis that triggered the global recession originated from the developed countries, it was the developing nations that have suffered most. And while billions have been spent in hope for 'green shoots' in the richer economies, more is needed to avert poorer countries' slipping into dark misery.

"For a large number of countries, there are no 'green shoots' of recovery," UN Secretary-General Ban Ki-moon said Wednesday in opening remarks to the Conference on the World Financial and Economic Crisis and Its Impact on Development, running from Wednesday to Friday at UN Headquarters in New York.

"There are only fallow fields. The real impact of the crisis could stretch for years," Ban said. As the economic turmoil spread around the globe, developing world has born the brunt of the crisis, suffering from capital outflows, rising borrowing costs, collapsing world trade, lower commodity prices and falling remittances from overseas workers.

The World Bank forecasted in its latest annual Global Development Finance report that the developing countries growth will reach only 1.2 percent in 2009, compared to 7.7 percent in 2007. But excluding economic powerhouses like China and India, the remaining developing economies are expected to shrink by 1.6 percent. One of the hardest hit areas is the investment drain, the bank said.

According to its data, ever since peaking in 2007 with US$1.2 trillion, the foreign investment in developing countries has been plunging, with a total of US$707 billion in 2008 and likely US$363 billion this year. Less than one third of the amount of foreign investment that they had two years ago would in turn exacerbate the debt-building situation of the poorer countries, the World Bank warned.

As the bank adjusted its forecast for world economy downward to a drop of 2.9 percent this year, it also warned a nearly 10 percent decline in worldwide trade.

UN's version of forecast echoed that of World Bank, foreseeing the largest decline in world trade volume since the financial crisis of the 1930s, which would be a huge hit to export-oriented developing economies.

In Central and Eastern European countries such as Poland, Croatia and Latvia, the recent fall-off of foreign private investment and exports has caused industrial production to contract at double-digit rates and have forced several countries to turn to the International Monetary Fund for bailouts.

While "the economic recession in the real sectors persists" as pointed out by World Bank's Chief Economist Justin Lin, developing countries have seen falling industrial production and rapidly rising unemployment.

Initial projections of 50 million unemployed over the next two years could easily double if the situation continues to deteriorate, the UN warned. And the contraction poses a serious threat to efforts to reduce poverty levels.

In Sub-Saharan Africa and South Asia, where the bulk of the world's poor are located, the growth slowdown virtually eliminates any prospect for continued reductions in the poverty count in 2009,said Ngozi Okonjo-Iweala, managing director of the World Bank on Tuesday's UN conference.

Okonjo-Iweala said the crisis-related growth slowdown in developing countries implies that there are an estimated 55 to 90 million more extremely poor people in 2009 -- living on less than 1.25 dollars a day -- than expected before the crisis.

The Food and Agriculture Organization of the United Nations projects that crisis will contribute to the number of hungry and undernourished people worldwide rising to a historic high of over one billion. With the economy bogged down in the worst recession since the 1930s, the world is now faced with a financial tsunami that is bound to have negative impacts on the Millennium Development Goals (MDGs), a set of antipoverty targets that world leaders have agreed to achieve by 2015, said Sha Zukang, UN undersecretary-general for Economic and Social Affairs, in a recent written interview with Xinhua.

The least developed countries, which contributed least to the crisis yet are most severely affected, do not have the adequate resources to map out stimulus plans and will require special assistance by the international community, Sha noted.

Sha expressed hope that the UN meeting will urge rich countries to help improve the external development environment for poor countries by reaffirming aid and debt relief commitments.

(Xinhua News Agency June 25, 2009)