On Developing Countries; Impact of Market Turbulence Little -- WB

Article excerpt


WASHINGTON (AP) -- The World Bank said the impact of recent turbulence in financial markets on developing countries has been limited and global economic growth remains strong.

The bank also called on donor governments to meet their commitments to boost aid for development and said countries with fast-growing economies and mounting currency reserves could bring new resources to this effort.

The bank's policy-setting Development Committee said Sunday that its members "agreed that strengthened support for the inclusion and empowerment of the poorest in development, especially in sub-Saharan Africa, and for engagement by the bank group in fragile and conflict-afflicted states must be key elements in the strategic framework.

The Development Committee session followed a meeting of the bank's sister institution the International Monetary Fund.

In a lecture sponsored by the IMF, former Federal Reserve Chairman Alan Greenspan warned that rising protectionism could undermine the ability of the United States to deal with large deficits.

"If the pernicious drift toward fiscal instability in the United States and elsewhere is not arrested and is compounded by a protectionist reversal of globalization, the current account deficit adjustment process could be quite painful for the United States and our trading partners," he said.

At a news conference the bank's new president Robert Zoellick and the head of the IMF, Rodrigo de Rato, said they were exploring ways the fund could start the ball rolling on reducing debt for Liberia.

The World Bank should further strengthen its work as a knowledge broker on development policy while continuing its existing lending activities, its Development Committee said.

Countries that are bank clients, the committee said, should sharpen their focus on poverty reduction strategies "on stronger, shared private-sector led growth to link these strategies better to budgetary frameworks and to implement them effectively."

The bank also should help developing countries deal with the causes and impacts of climate change.

The members of the committee welcomed the commitment by the bank's new president, Robert Zoellick to develop a new strategy for the bank in consultation with the banks's 24-member executive board. …