World Bank to Boost Lending in Response to Economic Crisis

By Barry Wood

Washington
27 April 2009

The major high income and developing countries that set policy for the 185 member-nation World Bank agreed in Washington on Sunday that the bank should boost its lending to help poor countries adversely affected by the global economic slowdown.

World Bank President Robert Zoellick said the bank will boost its lending by $100 billion during the next three years, noting that the economic crisis has forced as many as 90,000,000 more people into extreme poverty.

"There is a widespread recognition that the world faces an unprecedented economic crisis," said Robert Zoellick. "Poor people will suffer the most. And we must continue to act in real time to prevent a human catastrophe."

The 24 member World Bank steering committee, called the development committee, was headed by Mexico's Finance Minister, Agustin Carstens.

"The financial crisis is turning into a human and development calamity," said Agustin Carstens. "Many people have already been driven into absolute poverty."

The World Bank is providing Mexico with $200 million in loans to help it deal with the recent swine flu outbreak.

Earlier, the steering committee for the International Monetary Fund announced that it is implementing recommendations of the leaders of major advanced and developing economies, the G-20, giving the IMF more resources to help member nations in financial distress.

The World Bank and the IMF are owned by their 185 member nations. The IMF is also being assigned a strengthened role to monitor financial markets - a move intended to forestall further financial crises. The bank and the fund are speeding up procedures that will give rising developing countries like China and India a greater say in the two Washington-based financial institutions.