The New Nation - Internet Edition

FOLLOWING the financial crisis in Western economies, the World Bank President Robert Zoellick has warned the developing countries of facing tougher times ahead as consequences. A 'growing financial squeeze' together with higher food and fuel prices will only make it more difficult for governments in developing countries to protect the poor, he said in a press interview ahead of world finance ministers' recent meeting in Washington. Business failures, bank emergencies and balance of payments crises are all possible in developing countries as crisis spreads, the World Bank chief said. The World Bank has warned that high food and fuel prices will increase the number of malnourished people around the world.

The bank identified around 28 countries that could face 'fiscal difficulties'. However, Mr. Zoellick is optimistic about the possibilities of sub-Saharan Africa over the medium and long term and it would require their prompt actions and the right investments. The financial crisis, in fact, threatens to undo much, or in some cases all, of the progress made in many developing countries over the past several years to lift growth and reduce poverty and disease.

Despite ripple effects from the financial crisis into emerging economies, China and the oil-rich Gulf States usually would continue to go ahead with their investments. China obviously would prefer providing investments in natural resources in Africa and the Gulf countries in agriculture. Just as Western central banks and China took unprecedented coordinated action to cut interest rates to restore calm to markets, it is hoped that they would do the same when it comes to helping the developing world not only to deal with effect of the financial crisis, but also the 'human crisis' of increasing malnourishment. Contribution to a World Bank fund to assist developing nations struggling with higher food and fuel prices could be of immense help.