November 2008 | Issue 21 Have you noticed? In response to your feedback, we have a new name: "North American Affairs News". We are always looking for advice on how we can improve. Please contact us. Financial Slowdown: Impact and Response in Developing Countries
On October 16, the World Bank-International Monetary Fund Annual Meetings opened amid great concern about the global economy. They ended with member nations urging the World Bank and IMF to draw on the “full range” of their resources to help developing countries weather the fallout from the turmoil. At the same time, finance and development ministers agreed [PDF] that industrialized countries must not back down from their commitments to boost aid to developing countries already battered by high food and fuel prices.
Developing countries “risk very serious setbacks to their efforts to improve the lives of their populations from any prolonged tightening of credit or a sustained global slowdown,” World Bank President Robert B. Zoellick warned. More >>
World Bank Could Double Lending The World Bank has over $40 billion in capital and stands ready to double lending for developing countries if needed. Last year, the Bank lent $13.5 billion from that fund. In addition, nations pledged a record $41.7 billion last year to the Bank’s fund for the 78 poorest countries, IDA. One of the Bank’s private sector arms, International Finance Corporation, is exploring the possibility of a fund to help recapitalize banks in developing countries. IFC said it might contribute around $1 billion and seek to raise another $2 billion from various sources, including international financial institutions (IFIs), commercial banks and other investors.
The Bank responded to the food and fuel crisis earlier this year with a $1.2 billion rapid financing facility to provide immediate help to the poor and a new plan to boost agriculture and food security in Africa. Some $850 million for the rapid financing facility has already been approved or is in the pipeline. Australia announced at the Annual Meetings a AUD$50 (US$34) million contribution to the food facility.
The World Bank Group is also developing an Energy for the Poor initiative with a number of donors to help countries strengthen social safety nets to protect the poor against the impact of high fuel bills.
A Need to Modernize Multilateralism In a speech delivered in advance of the Annual Meetings, President Zoellick said the world needs to rethink the way it solves economic problems amid today’s global crisis, including turning the Group of Seven into a Steering Group that empowers rising economic states.
Read the speech and watch the webcast here >>.
| 
RSS