Bank president Robert Zoellick says more money is needed to help developing countries pull out of financial crisis
World Bank president, Robert Zoellick, talking in Istanbul, said it planned to lend more than $40bn over the next year. Photograph: Richard Hamilton Smith/Corbis
The World Bank will face "serious constraints" on its ability to help developing countries recover from the global financial crisis unless rich nations provide it with extra funding, its president Robert Zoellick said today.
Speaking in Istanbul ahead of the annual meeting of the Bank next week, Zoellick said the Washington-based organisation had increased its lending threefold in the year to June to $33bn (£20.7bn) and was planning to lend more than $40bn over the next 12 months.
"By the middle of next year we will face serious constraints," the World Bank president told a press conference, adding that his institution had made recent loans to India, Indonesia, Colombia, South Africa and Mexico.
While accepting that the Bank's biggest shareholders – the rich countries of North America, Western Europe and Japan – face big budgetary problems, Zoellick said more money was needed to meet the investment needs of developing countries.
"We recognise that all countries are under budgetary strain and it is not an easy time to be asking for these things".
He added that the World Bank had committed itself in the spring of 2008 to a three-year $100bn programme of lending, but the demands caused by the global downturn meant the Bank now needed to "move beyond that".
The Bank has three main channels for providing finance to the developing world – its lending to middle-income countries, a soft-loan facility (the International Development Association) for the poorest nations and support for private sector investment through the International Finance Corporation.
Zoellick accepted that he would have to make a strong case to the US Congress for extra capital. "We will have to show that we have earned it," he said.
Bernice Romero, advocacy director for Oxfam International, said: "It is important that the Bank has the money it needs to keep lending to middle-income countries. But we want guarantees from donors that this refinancing won't mean less for the poorest countries.
"Any significant increases in funding for the Bank must come with a say for poor countries in the way the Bank is run."
Zoellick said it was time for the Bank's governance – which has remained broadly unchanged since the 1940s – to be reformed. It was "increasingly outdated" in a world where China and India were key sources of growth.
Larry Elliott in Istanbul
guardian.co.uk, Friday 2 October 2009
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