http://www.tehrantimes.com/NCms/2007.asp?code=195422
World faces risk of social crisis, World Bank warns MADRID (Reuters) -- World economic recovery will be slow and there is a risk rising unemployment will create a social crisis and dangers of protectionism, World Bank President Robert Zoellick said in an interview with a Spanish newspaper. "What began as a great financial crisis and became a great economic crisis, is now becoming a great crisis of unemployment, and, if we don't take measuures, there is a risk of a great human and social crisis, with major political implications," Zoellick told El Pais. "That's a good breeding ground for populist, protectionist policies," he said, expressing caution about the strength of any economic recovery. "The finance ministers of the G7 and the G20 are displaying a certain relief because the contraction has slowed. Although we could still have low or negative growth, the situation is less bad," he said. "But economists and industrialists are conscious that the recovery will be slow coming and weaker than expected." While some policy response has been in the right direction, dangers remain in the U.S. financial system and in vulnerable emerging markets, Zoellick said. "Maybe the key thing that has to be cleaned up is the financial system. The USA has taken steps in the right direction, but there are still banks with serious difficulties related to consumer finance, credit cards and real estate. "On top of that, the United States depends more than Europe on the mortgage securitization market, and that market has yet to recover," he said. Some emerging markets were more vulnerable than others, he said, identifying risks in Africa, parts of Latin America and in Eastern Europe. "China could surprise on the upside, it has obtained good results from its stimulus plan. For countries like Mexico and Brazil, the main threat is losing access to finance," Zoellick said. Photo: World Bank President Robert Zoellick. [Non-text portions of this message have been removed]
