Speaking in Washington and concerned over rising food prices and lingering instability in the Middle East and Africa, World Bank President Robert Zoellick believes the global economy is "one shock away" from a major crisis.
Citing the ongoing revolutions throughout the Middle East and North Africa and the steady rise in food and commodity prices, World Bank President Robert Zoellick is concerned that economies worldwide would not be able to sustain another blow and that we may be "one shock away from crisis."
"The crisis in the Middle East and North Africa underscores how we need to put the conclusions from our latest world development report into practice. The report highlighted the importance of citizen security, justice and jobs," Zoellick said, according to a BBC report.
Mr. Zoellick was referring to a World Bank report that was issued last week. The new report concluded that economic growth alone cannot stabilize developing nations, noting the collective need for the removal of corruption and for the pursuit of individual dignity and human rights, Reuters reported.
"High unemployment and inequality can combine with weakness in government capacity or problems of corruption, accountability and human rights abuses, to create risks of conflict and violence," Sarah Cliffe, one of the lead authors of the report, said, according to Reuters.
But the World Bank believes that high food prices remain the biggest threat to developing countries. As the prices of food staples continue to rise, global instability will follow. Persistently high food prices were one of the key underlying catalysts for the Tunisian unrest and revolution in February.
"We welcome evidence of a strengthening global economy, led in large part by developing countries. However we are concerned that overheating in some sectors, especially food and energy, is resulting in price pressures and volatility, putting developing countries and especially their most vulnerable populations at risk," the Development Committee of the World Bank and IMF said in a statement released over the weekend, according to a Xinhua report.
Zoellick asked Western nations to do more in terms of monetary resources to stabilize the Middle East and North Africa, citing structural unemployment there, particularly among younger demographics.
"Especially because of youth unemployment... there is now a risk that this will be turned into a life sentence, and that there is a possibility of a lost generation," Zoellick said, according to the BBC.
"The financial crisis taught us that prevention is better than cure," he said. "We cannot afford to forget that lesson."