Credit crunch spells ‘calamity’ for world’s poorest countries

The global financial crisis could become "a human and development calamity" for the world’s poorest countries, the head of the World Bank said. Speaking at the end of the World Bank's spring meeting, Robert Zoellick urged rich nations to do more to help tackle global poverty, asked donors to speed up their pledges and think about giving more.

Targets on tackling poverty in the poorest countries were unlikely to be met Mr Zoellick said as he warned an extra 53 million people are at risk of extreme poverty. "There is a widespread recognition that the world faces an unprecedented economic crisis, poor people could suffer the most and that we must continue to act in real time to prevent a human catastrophe," Mr Zoellick said. He added that no-one yet knew how long the recession would last.

In a joint statement, the World Bank and International Monetary Fund (IMF) said they had urged "all donors to accelerate delivery of commitments to increase aid, and for us all to consider going beyond existing commitments". The bank will respond to the crisis by tapping its healthy balance sheet to raise lending up to $100 billion over three years and launch initiatives in social protection, public works and agriculture, Mr Zoellick said. World Bank managing director, and former Nigerian Finance Minister, Ngozi Okonjo-Iweala, said there was now a real crisis in Africa as a result of the worldwide recession. She said that as a result of falling demand for commodities and other exports, government budgets were falling short across the continent. "This means that [governments] cannot pay teachers or health workers, and we are hearing of people who can't eat three square meals a day," she said.

Her comments came after the IMF said on Sunday that it would consider a request from Tanzania for additional financial support to help it cope with the impact of the global financial crisis. How much Tanzania has asked for has not been announced. Mexican Finance Minister Agustin Carstens, chairman of the World Bank policy-steering committee, outlined steps his government was taking to tackle the outbreak of swine flu. He said that the bank was providing a $25 million loan for medicine and logistical help and another $180 million for operational needs. Zoellick said already-mobilized bank public health experts with experience dealing with SARS, or severe, acute respiratory syndrome, and Asian bird flu would provide practical help to Mexico.

By Hayley Jarvis for SOS Children