The New Nation - Internet Edition

UNB, Dhaka

The World Bank has called upon the donors to further boost aid as investment in developing countries heads for a "perfect storm" as fallout of the global economic recession.

"Developed country policymakers must avoid putting in place policies and structures that undermine the interests of developing countries," World Bank president Robert B. Zoellick said ahead of the international conference on Financing for Development in Doha, Qatar.

In a statement received here yesterday, he said many developing countries have taken courageous steps in recent years to introduce and maintain sound macroeconomic and fiscal policies.

"They now find themselves at the mercy of a crisis not of their making. A retreat to protectionism or economic nationalism by developed countries will hurt them even further," Zoellick said.

In a paper prepared for the Doha follow-up conference to review the implementation of the Monterrey Consensus, the Bank said it is imperative that donors meet their Gleneagles commitments to debt relief and scaled-up aid.

At present, G7 countries are falling $30 billion short of these goals.

According to the paper titled "The Implications of Global Crises on Developing Countries, the Millennium Development Goals, and the Monterrey Consensus, developing countries are facing a "perfect storm," with a convergence of slowing world growth, a withdrawal of equity and lending from the private sector, and higher interest rates."

Investment, the main driver of developing country growth over the past five years, will be hard hit by the financial crisis, and remittances from developing country migrants-a powerful poverty reduction mechanism-will likely decline in line with the global slowdown.

All this comes in the wake of the severe food and fuel price crises, which placed a heavy fiscal, economic and social burden on many developing countries.

To meet the growing needs, Zoellick has announced that the Bank Group will front load $42 billion it has available to support low-income (IDA) countries, including Bangladesh, over the next three years, and rely on its strong capital basis to lend up to $100 billion to developing countries over the same period.