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AP: World Bank seeks help for crisis-poor

Published 1/30/2010 in Business

DAVOS, Switzerland (AP) — The World Bank's managing director urged global power players Friday to start investing and lending in low-income countries to help the tens of millions of people plunged into poverty because of the global economic crisis.

Ngozi Okonjo-Iweala, in an interview with The Associated Press on the sidelines of the World Economic Forum, said that poor countries didn't cause the financial meltdown but have been hard-hit by it.

"My message to the world power players is to focus on ... the low income countries that do not have the ability to totally bring themselves out of this crisis ... and the 64 million poor people who have been thrown into poverty as a result of this crisis," she said.

"Many of the big investors who are here, many of the big bankers — they need to get back into the business of lending," Okonjo-Iweala said. "They need to get back into supporting micro-credits for some of the poor people. They need to invest."

She stressed that the people most severely affected by the financial crisis "are not asking for charity."

"They really want people to come and invest in their countries and create jobs. So I want the focus to be 'how do we go into some of these emerging market countries, some of the low income countries and invest'," the former Nigerian finance minister said.

In a report earlier this month, the World Bank said the global economy will suffer the fallout from the financial crisis for years to come, though it forecast the world economy will grow 2.7 percent this year and 3.2 percent in 2011 after contracting 2.2 percent in 2009.

"However, it's fragile," Okonjo-Iweala said. "There are still many uncertainties out there."

"We have to be careful about how we phase out from the stimulus that has been injected into many economies into public sector investment into the economy," she said.

China and Asia, the two Asian powers, "are contributing substantially to the world coming out of this recession," Okonjo-Iweala said, and anything that curbed their growth "would feed back into the rest of the global economy."

The recovery could also be hurt if something happens again in the banking or financial sectors "so there are still these fragilities that we need to worry about," she said.

Okonjo-Iweala said "jobs are critically important all over the world."

The World Bank has been helping developing countries to create and preserve as many jobs as they can by providing the fiscal stimulus that poor countries don't have, and it has also been helping many countries finance social safety nets, she said.

"64 million have fallen back into poverty, living under $1.25 a day, and many poor countries just don't have the safety nets," Okonjo-Iweala said. "So we financed food-for-work programs, infrastructure programs that create jobs, maintenance of infrastructure, financing school feeding programs, and trying to finance agriculture to keep farmers working."

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