The Word Bank has asked wealthier countries to set as ide 0.7 per cent of any economic stimulus package to help the world’s poorer cou n tries.
The Bank said, in a report issued on Monday in Washington DC, the financial supp ort was needed to assist developing countries to overcome the effects of the glo b al economic crisis.
“This global crisis needs a global solution,” the World Bank’s President, Rober t Zoellick, said.
He urged the developed countries to contribute to a ‘vulnerability fund”, to he lp the neediest countries weather the storm.
He said that even if the World Bank tripled its lending in 2009 to US$ 35 billio n, the figure would be only a fraction of what was needed.
“So, we need investments in safety nets, infrastructure, and small- and medium-s ize companies to create jobs and to avoid social and political unrest,” Zoellic k said.
The report also noted that countries from Africa, Latin America and Asia would f ind credit shrinking and export markets in decline due to the financial crisis.
“As a result, for the first time in 50 years, both the global production and wor ldwide trade volume would shrink in the same year,” it warned.
It also disclosed that, “in general, economies in Europe have been hurt by huge bank losses in US mortgage-backed securities that has severely choked off credit
“The US recession, meanwhile, has undermined their wealthiest export market, whi le Asian countries, in turn, have seen their exports markets in the US and then E urope pulling back,” the report stated.
The Pan African News Agency (PANA) reports that the document was published ahead of a 14 March meeting of Group of 20 (G20) finance ministers in London.
Meanwhile, world leaders will also be attending a high-level G20 Summit n London next month (2 April), which will focus on addressing the global financial crisi s , redoubling the resources of the international financial houses and providing a
package to bail out poor- and middle-income countries.
The participating leaders are from Argentina, Australia, Brazil, Canada, China, Czech Republic, France, Germany, India, Indonesia, Italy, Japan, Mexico, The Net h erlands, Republic of Korea, Russia, Saudi Arabia, South Africa, Spain, Turkey, U K and the US.
PANA learnt that the Chair of The New Partnership for Africa’s Development (NEPA D), the Chair of the Association of South East Asian Nations (ASEAN), the Presid e nt of the EU Commission and the Chairman of the African Union Commission will al s o attend the meeting.