World Bank Says Don't Forget Poor Amid Crisis

WASHINGTON -- Group of 20 nations emerging from recession shouldn't forget poorer countries, which face funding needs of $11.6 billion just to maintain spending on basic services like health and education, the World Bank said Wednesday.

In a report prepared for G-20 leaders meeting in Pittsburgh next week, the bank warned that the global crisis is poised to push an additional 89 million people into extreme poverty by the end of next year if additional help isn't provided.

World Bank President Robert Zoellick said recent developments suggest the global recession "may be coming to an end," including signs that the slowdown in production and trade may be over.  But low-income countries, or LICs, are expected to take longer to emerge, still suffering from a drop in the capital, trade and remittance flows their economies depend on. 

Low-income countries as a group are expected to face an external financing gap of $59 billion this year. With private financing flows on the decline, these countries will become even more dependent on external aid.  Despite a significant mobilization of resources by donor countries and agencies so far, more is needed. 

The World Bank is calling for G-20 countries step up assistance for agriculture development in poorer countries and help them protect core spending needs to avoid forcing more people into poverty. In particular, the bank wants the G-20 to take up the pledge made by Group of Eight leaders in July to provide $20 billion to eliminate bottlenecks in the agriculture sector.

Leaders should increase efforts to support small and medium-size businesses, work to complete the long-stalled Doha round of trade talks, and resist protectionist pressures.  The World Bank is also seeking support for a crisis response facility that would provide quick assistance to poor countries coping with external shocks.


source: World Bank Says Don't Forget Poor Amid Crisis _WSJ

By TOM BARKLEY