WB urges G20 to step up aid to poor countries

WASHINGTON (AFP) – The World Bank Wednesday urged the Group of 20 nations to step up aid to the poorest countries, saying they lack 11.6 billion dollars for critical spending to weather the global economic crisis.

The poorest countries face a $11.6b shortfall in critical core spending amid sharp drops in trade, capital flows, remittances and tourism resulting from the global recession, the WB said in a report prepared for the upcoming G20 summit. Just over two-thirds of that gap is for countries in sub-Saharan Africa, it said. “Failure to address the crisis-related challenges facing LICs (low-income countries) jeopardizes years of progress in combating poverty and improving the foundations for economic growth,” the report said.

The development lender prepared the report, entitled “Protecting Progress: The Challenge Facing Low-Income Countries in the Global Recession,” for the September 24-25 meeting of leaders of the G20 developed and developing countries in the US city of Pittsburgh, Pennsylvania.

“The poor and most vulnerable are at greatest risk from economic shocks — families are pushed into poverty, health conditions deteriorate, school attendance declines, and progress in other critical areas is stalled or reversed,” World Bank president Robert Zoellick said in a statement.

“The poorest countries may not be well represented on the G20, but we cannot ignore the long-term costs of the global downturn on their people’s health and education,” he said.

In total, an estimated 89 million more people will be pushed into extreme poverty, defined as living on less than 1.25 dollars a day, by end-2010 than would have been the case without the crisis, the Washington-based multilateral development lender said. The WB recommended coordinated policy action by the G20 and others to help the poor countries which “have been hit hard by crises not of their making, and face daunting challenges that jeopardize years of progress in combating poverty.” The bank recalled that the G20 had pledged $50b in aid to poor countries at the London summit in April, and urged the leaders to endorse a pledge of $20b for agricultural development made by the G8 at a summit in July.

The report calls on the G20 to “firm up how country commitments will be met.” It said there was a “pressing need” for the creation of a so-called “Crisis Response Facility,” a World Bank financial lifeline that would offer quick and effective assistance to poor countries following severe shocks.