The global financial crisis sweeping through Wall Street and the European banking sector will touch the lives of the world's most vulnerable, push millions into deeper poverty and lead to the deaths of thousands of children, a new United Nations study said.
The world's poorest countries are unable to insulate their citizens from the crisis, with an estimated 43 out of 48 low-income countries incapable of providing a pro-poor government stimulus, the report by the UN Educational, Scientific and Cultural Organization (UNESCO) said.
The report highlighted an increase in child mortality rate between 200,000 to 400,000, saying that child malnutrition will be one of the main drivers of higher child death rates.
"Millions of children face the prospect of long-term irreversible cognitive damage as a result of the financial crisis," Patrick Montjourides, one of the authors of the report, said.
There is also a real danger that some low-income countries like Mozambique, Ethiopia, Mali, Senegal, Rwanda and Bangladesh -- which have made progress towards the Millennium Development Goals (MDG) of universal primary education -- will suffer setbacks.
Reduced growth in 2009 will affect the 390 million people in sub-Saharan Africa living in extreme poverty and a loss of income around $18 billion ($46 per person), the report said.
"This projected loss represents 20 per cent of the per capita income of Africa's poor -- a figure that dwarfs the losses sustained in the developed world," it added.
The study, prepared by the Education for All Global Monitoring Report (GMR) team, was presented at the first session of the UNESCO Future Forum which analysis the consequences of the present financial and economic crises for international cooperation.
It documented the potential impact of the current worldwide economic meltdown on the Millennium Development Goals (MDGs), internationally agreed targets to eradicate poverty and reduce child mortality among other human development objectives.
The report said that increased international aid could help reduce fiscal pressure, but development assistance budgets are coming under increased pressure and countries are using these crisis as an excuse to turn their back on the world's poor.
"Aid donors could clearly do far more to protect the world's poorest people from a crisis manufactured by the world's richest financiers and regulatory failure in rich countries," Kevin Watkins, one of authors, said.
According to the report the European Union's aid commitment to provide 0.5 per cent of GDP in aid by 2010 will be $4.6 billion less than commited.
"We cannot allow rich countries to use this crisis as an excuse to turn their back on the world's poor," Koichiro Matsuura, Director-General of UNESCO, said.
"Measures to revive growth and fix the financial system must be coupled with greater efforts to tackle the structural problems of extreme poverty and inequality," he added.
The authors of the report called for a concerted international effort to limit the impact of the financial crisis on the poor.
It has asked for an increase of over $500 billion in International Monetary Fund (IMF) for special drawing rights along with governance reforms to give developing countries an increased voice, It has also asked EU to provide a $4.6 billion aid adjustment.