In its preliminary assessment of the global economy since the attacks of September 11, the Bank said slumping economic growth in the United States and other OECD countries will reverberate throughout the developing world, forcing as many as 10 million people into poverty, to join the 1.2 billion who already subsist on less than $1 a day.

"We have seen the human toll the recent attacks wrought in the US, with citizens from some 80 nations perishing in New York, Washington, and Pennsylvania," World Bank President James Wolfensohn said. "But there is another human toll that is largely unseen and one that will be felt in all parts of the developing world."

The impact of this economic crisis on health care and nutrition could have disastrous effects on children, the Bank said. It expects 20,000-40,000 children under the age of five to die as a result of the economic consequences of the attacks.

According to the World Bank's report, the main problems facing emerging economies are depreciating commodity prices, the flight of foreign aid and capital, and increased costs of trade due to security restrictions and customs delays. The hardest hit sectors will be tourism and agriculture.

Some experts caution that it may still be too early to discern the true economic impact of the attacks, especially since a global economic slowdown was already underway prior to September 11 and the data necessary to draw confident conclusions are not yet available.

"Nearly all our economic data are for the period before the attack," said Dr. William Dickens, a senior fellow in Economics at the Brookings Institution. "We have almost no idea how the attack has affected the US and world economy."

But the attacks have already had a noticeable economic impact on countries in which tourism accounts for a significant portion of GDP. In the Caribbean, 65 percent of holiday reservations have been cancelled. Nepalese authorities have reported 50 percent cancellations of hotel bookings. Countries in the Middle East are also expected to suffer from the travel droughts that have been brought on by increased concerns about airport safety around the world.

The effects of the attacks on the agricultural export sector will be equally grave, as commodity prices fall and US demand for foreign commodities shrinks.

"For economies that are dependent on commodity exports, particularly for cotton and beverage exporters, this portends a large terms of trade shock over and above the impacts of slower growth in GDP," the World Bank said.

Average commodity prices will decline even more this year than the previous projection of 7.4 percent, the Bank said. Agricultural futures are already down 5 percent since the attacks. With the potential of a sinking US dollar threatening to depress US demand further by making imports more expensive for Americans, the outlook is not good for farmers and laborers associated with the agricultural sector, who are expected to suffer substantial income losses.

"The developing world will be disproportionately affected because both the prices and quantities of the exports of the developing world tend to be more sensitive to demand than the typical exports of the developed world," Dr. Dickens said.

The attacks are expected to drive a teetering US economy into recession and deal another blow to an already stalling global economy.

"There is broad agreement that the terrorist attack will push the US economy into recession and the global economy into a period of slow growth," said Martin Baily, senior fellow at the Institute for International Economics, in an October report on the attacks.

Slowing growth in rich countries is expected to ripple through to poorer countries. Before September 11, the Bank was projecting a growth rate in emerging economies of 2.9 percent in 2001 and a rebound to 4.3 percent in 2002. Following the attacks, the Bank has revised its estimates, projecting rates of 3.5 percent to 3.8 percent in 2002, because it will take longer than expected for developed countries to recover from their own economic malaise. This model assumes that business will return to normal by mid-2002 and that the combination of prudent monetary policy and restored confidence in security will buoy consumer confidence.

Continued military action, experts say, may exacerbate the economic slowdown by fostering uncertainty and shaking consumers' sense of security. But a swift military campaign that is ineffective in restoring global security may be even more dangerous for the economy.

According to Dr. Dickens of the Brookings Institution, "an end to military action that left concerns about the long run security of the world in doubt could be more detrimental than a long term military campaign that produced tangible results suggesting improved long-run security."

The World Bank said different countries would experience different economic problems as a result of the attacks. The hardest hit countries will fall into recession and experience a rise in the number of their citizens living in poverty next year. Other countries may sustain positive growth, but they will be unable to lift any of their citizens out of poverty.

While all regions will be affected, Africa may be facing the gravest crisis, the Bank said. Falling incomes and sluggish markets for key commodities like cotton, cocoa, and coffee could combine to drag another 4 million to 5 million people into poverty in the next year.

"The 300 million people in Africa are particularly vulnerable, because most countries have no safety nets and poor households have minimal savings," said Eric Chenje, one of the Bank's Africa experts.

With population growth hovering around 3 percent in Africa, economic growth has to keep pace to keep per capita incomes from falling, which many economists say can be disastrous in economies without social safety nets.

Asia will fare slightly better, but the optimism among economists that Asian countries might finally be recovering from the financial earthquakes that ravaged their economies in 1998 has dissipated in the last several weeks. The Asian Development Bank issued relatively optimistic forecasts earlier this year, but has revised its projections for Asian economies in the wake of the attacks. The areas of Central Asia being targeted in the US military campaign are exceptions in that they will be particularly hard hit.

Dealing with this crisis will prove a formidable task, the World Bank noted, but one that must be undertaken together by rich and developing countries.

"Policy responses have to be swift and somewhat bolder in rich and poor countries because of the heightened level of risk to the global economy," World Bank Chief Economist Nicholas Stern said.

The Bank called for increased foreign aid from developed countries and another round of trade liberalization to help mitigate the problems developing countries face.

Foreign aid to the developing world has been decreasing in recent years after a decade of increasing levels. At about .22 percent of the GNP of most OECD countries, current levels of aid are not sufficient to stave off a new wave of poverty, the Bank said. Increased bilateral and multilateral lending to developing countries will reduce their reliance on private foreign capital for their financing needs.

"The evidence from the Bank's work on aid effectiveness demonstrates that well-directed aid, combined with strong reform efforts, can greatly reduce poverty, and can also mitigate particular effects of crises," the Bank said.

Reducing international trade barriers is an equally important step in rehabilitating the economy. The Bank said another round of trade liberalization could yield $1.5 trillion in income to developing countries in the next decade.

Martin Baily of the Institute for International Economics sees it as a prerequisite for recovery. "Emerging economies benefit from globalization and will suffer if its progress is slowed," he said.

The Bank concurs that loosening trade restrictions, especially in areas of agricultural trade, will play a crucial role in jumpstarting the economies. "Maintaining trade is more important than ever, especially in the face of an economic slowdown which is often accompanied by pressures for increased protectionism," Chief Economist Nicholas Stern said.

The World Bank also said more efficient and coordinated financial policy by the world's economic powers could stabilize the global economy, and that developing countries need to continue to make the internal reforms necessary to strengthen their economies.