A few days ago the World Bank issued a report containing a dire warning to developing countries. It made clear that they needed to begin to prepare for a significant downturn in the global economy. In unusually direct language it warned that such nations should prepare now for further economic shocks and evaluate their vulnerabilities. It suggested that while prospects in most low- and middle-income countries remained favourable, the effect of the economic crisis in high-income countries was beginning to be felt worldwide. The problems of debt in the Eurozone and weakening growth in a number of large emerging economies, the Bank said, was causing global growth prospects to dim.

According to Andrew Burns, the Manager of Global Macroeconomics at the World Bank, any escalation of the impending crisis would spare no one. Developed and developing-country growth rates could fall by as much or more than during the 2008-09 global economic crisis, he is reported to have said. His comments were echoed by Justin Yifu Lin, the Bank’s Chief Economist, who warned that ‘developing countries needed to evaluate their vulnerabilities and prepare for further shocks, while there is still time’.

In its report, the World Bank lowered its growth forecast for 2012 to 5.4 per cent for developing countries and 1.4 per cent for …..