Sunday, October 11, 2009

World Bank Urges More Funding

VOA News: World Bank, IMF Urge More Funding to Prop Up Economies of Developing Countries Nigeria: Poorest Countries Will Be Poorer – World Bank

The World Bank has estimated that there will be approximately 90 million more people at risk of entering the realm of extreme poverty by the end of 2010. This estimation comes as a result of the impact of the financial crisis on developing countries. Countries such as Africa need access to money made available through the World Bank to pay for investments in education, health care, infrastructure, agriculture, and national resource management.

Having enough funding to help less developed countries during this crisis is a large concern for the World Bank and International Monetary Fund (IMF). World Bank chief, Robert Zoellick, made an appeal to the leaders of the developed countries during the annual World Bank and IMF meetings in Istanbul. The World Bank will need significantly more money to aid the poorer nations. He estimated that there will be a record level of lending, approximately $40 billion or more this year in addition to last year’s lending of $33 billion. Failure to raise more money would require the World Bank to put serious constraints on lending and require a focus on the lowest income countries.

The main donor countries, including the United States, Great Britain and France are demanding that the World Bank implement reforms in exchange for more funding. Transparency in the way the World Bank does business is one of the reforms these countries are requesting. While agreeing that the reforms are necessary, Zoellick explained that the reforms take time and that the poor nations cannot afford to wait.

The World Bank said the poor and most vulnerable are at the greatest risk from economic shocks as families are pushed into poverty, health conditions deteriorate, and progress in other critical areas are stalled. While the global economy is showing signs of recovery, 43 low-income developing countries are suffering in the midst of the recession. It is for this reason that the World Bank said it must continue to increase support to the poorest countries.

1. How should the World Bank raise funds to aid the impoverished countries?
2. Should the developed countries be required to put out more money when they too are trying to recuperate from the recession?

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