ArcelorMittal has mothballed an iron-ore project in Liberia. Malawi is losing S Charm uranium project that the government had hoped would account for a tenth of national income. The World Bank estimates that new private activity in infrastructure was 40% lower in August-November of 2008 than a year before. The second effect of the meltdown is the dive in commodity prices see chart 1. Most poor states still rely on commodities for big shares of their foreign exchange T Charm tax revenues. Cocoa generates a fifth of Cote d'Ivoire's revenues, for instance. For such places, price volatility has been a curse. The drop in oil and commodity prices in 2008 benefited oil- and food-importers. But this followed a sharp price rise and, for many, relief has come too late. The food crisis of 2007-08 increased the number of people suffering from malnutrition by 44m. Farmers U Charm oil exporters benefited then. No longer. Now, falling export earnings are exacerbating poor countries' woes. In theory, the poorest should be cushioned from declining world trade. Even so, the latest data look dire. American imports from middle-income countries fell 3% in the year to November 2008. But imports from poor countries fell 6%; those from sub-Saharan Africa, 12%. The African Development V Charm says African current accounts, in surplus by 3.8% of gdp in 2007, will be 6% in the red this year. The fall in commodity prices puts further pressure on budgets, already hit by declining aid which can substitute for taxes. African budgets have swung from a healthy surplus of 3% of gdp in 2007 to a forecast deficit of the same amount in 2009. This leaves no room for economic stimulus.
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