World Bank Paints Depressing Picture for Developing Nations

The World Bank is not like your local branch of PNC. There is no customer service for the average citizen. No pristine carpets and offers of coffee. No smiling employees waiting to help you however they can. But the World Bank does provide financial and technical assistance to developing countries, offering low interest rates. So yes, it is very important.

However, Wednesday saw the World Bank revise downward its global growth forecast for 2012, adding that the world is playing an economic balancing act right now, a house of cards that could tumble at any given moment.

Not exactly the most uplifting of words at a time when the global economy needs more bad news like a guy with a broken leg needs to a kick in the shin. The worst-case-scenario offered by the World Bank has four euro-zone countries suffering financial freezing, causing growth to shink more than it already is doing. Awesome, huh?

According to Market Watch, the bank's latest global growth forecast for 2012 is 5.4 percent for developing countries, down from 6.2 percent as previously projected, 1.4 percent for high income countries down from 2.7 percent.

Dig a little deeper and it becomes apparent that the World Bank really does not expect this worst case to come true, but it is prepared for every eventuality and, to be fair, is looking to light a fires under a few behinds. “We are examining the possibility that things could go worse," said Andrew Burns, manager of Global Macroeconomic Trends, development prospects group of the World Bank.

Burns admits that the tones from the World Bank is dire, but he insists that it is necessarily so, so as to prepare developing nations for such possibilities. There is genuine concern that these nations have diminished ability to deal with a crisis, and it was not particularly good to begin with. Now it is worse, because higher income countries do not have the resources to carry the developing nations.

"Developing countries will have to search increasingly for growth within the developing world, a transition that has already begun but is likely to bring with it challenges of its own," the report said, basically saying that these nations are going to have to learn to stand on their own feet.

Good luck, guys.