By making the announcement on the eve of the G20 Summit this week end, the Group of World Bank confirms that its international Bank for restructuring and development could take new commitments up to 100 billion USD during the three coming years. Concerning this year, credits could triple to exceed 35 billion Usd against 13,5 billion last year. This increase in financial support to the private sector will protect the poorest and most vulnerable and will help the countries having serious budget problems to cope with their long-term credits on which depends the reconstruction of their economies and their long-term development.
At the same time, the World Bank decreased its growth forecast for the developing countries to 4.5 % for 2009, compared with a previous projection of 6.4%, due to financial problems, added to slow exports and lower prices. The Bank also forecasts that developed countries’ revenues will shrink by 0.1% the following year while world economy will only realise a 1% growth rate.
“The world economic leaders who will meet on Saturday to discuss the world financial crisis should bear in mind the human aspect of the crisis. As usual, “the poorest and most vulnerable countries will be most affected », said the president of the World Bank Robert B. Zoellick. “The answer to this crisis must be global, coordinated, flexible and rapid. Whereas challenges should be dealt with at the local level in each country, it is more urgent than ever that the international community should act in a coordinated and positive way to facilitate each country’s task”.
Tighter credit conditions and a lower growth will probably decrease the governments’ revenues and reduce their capacities to invest in education, health, while infrastructure spendings need to support growth. Current evaluations suggest that a 1% fall in growth rates of developing countries drive another 20 million people into poverty.
Already, 100 million people live in poverty due to price increases of food products and fuel price incrases.