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Zoellick: Protection for most vulnerable must be permanent part of financial architecture

Angie Gentile's picture

World Bank President Robert B. Zoellick. 2009 Annual Meetings, Istanbul, Turkey. Photo credit: Simone D. McCourtie/World BankBank President Robert Zoellick told an overflowing room of journalists this morning that these annual meetings come at an important time for the work of the Bank Group and its members.

“The G-20 summit last week provided clear markers for the work of the World Bank. But more than 160 countries were not at the G-20 table,” he said. “These meetings can therefore ensure that the voices of the poorest are heard and recognized. This is the G-186.”

Zoellick began his remarks by expressing his sympathy for the people of Indonesia, the Philippines, Samoa and Tonga and others in the region, who have been battered by a series of cataclysmic natural disasters.

The Bank’s President told reporters that developing countries are still suffering from the global economic crisis, and it is important for the G20 to scale up support. He said the meetings offer a platform to follow up on the proposal for a crisis facility for low-income countries—critical to ensuring that protection for the most vulnerable becomes a permanent part of the world’s financial architecture.

 

Zoellick also said the Bank is following up with UN agencies and other partners on the G-20 request to put into operation the food security initiative launched at the G-8 meetings in L’Aquila, Italy earlier this year. That initiative calls for the injection of an additional $20 billion in financing for agricultural development.

“We need to move beyond words on paper and start putting seeds in the ground,” the Bank’s chief said.

Zoellick remarked that one of the legacies of the crisis may be a change in global power relations, saying the latest forecasts show China and India helping to pull the global economy out of recession. He noted, though, that other developing countries are also drivers of growth, and that a multipolar economy, less reliant on US consumer demand, will be a more stable economy.

Given the evolving new multipolar economy, Zoellick said, “the Bretton Woods arrangements, forged after World War II and patched up in the decades since, look increasingly outdated.”

He said the Development Committee will be discussing voting reform during their deliberations next week, following the G-20 recommendation to increase developing country voting shares by at least 3 percent to at least 47 percent by early 2010. “I have called for increasing the developing countries’ share in the World Bank over time to 50 percent.”

Also on the docket will be the issue of a possible capital increase for IBRD and IFC. The Bank responded to the request made last Spring to scale up its support to $100 billion over a three-year period. “Demand is already moving beyond this,” he said, “and by the middle of next year we will start to face serious constraints.”

“The danger today is no longer of a collapsing world economy. The danger today is one of complacency.”

 

 

View the press conference statement and photos

For more on the World Bank's response to the financial crisis, visit www.worldbank.org/financialcrisis.

Comments

Submitted by VEDiCarlo on
Zoellick's use of "complacency" leads me to beg the question, complacency on whose part? To riff off of his post-WWII Marshall Plan comparison, it seems that instead of being complacent, the world's most powerful forces (1948: the US, 2000's: the G-8/G-20) have been overly involved in the narrowing of the global economy, rendering economic growth nearly impossible for developing nations. Yes, a multi-polar economy moves in the right direction (that is, away from US demands and toward global society), however a greater change may come from reigning in unwieldy multi-national corporations whose subversion of local economies creates prolonged and entrenched poverty. The complacency has been on the part of the international powers to not control MNC's, or perhaps this was not complacency at all, but active politics.

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